President's Message

NC/SC Boundary Update

2017 Convention

Forms Update

Legislative Update

President's Message

Even though our winter was near record-breaking warm, I, for one, am anxiously awaiting the approaching Spring.  Optimism over new home sales is always abuzz in the Spring.  Hopefully, the change in seasons will bring more than just a warmth to the air.

On a national level, President Trump appears to be implementing policies that will uphold his promise of “making America great again.”  These decisions will directly affect our industry, but to what extent is still unknown.  While the stock market continues an upward trend, not as many jobs were created in February as in January.  Another interest rate hike is currently being discussed by the FED.  Yet still, questions over the vitality of the CFPB also linger in the air.

Closer to home, our legislative committee is continuing efforts on the initiatives that will improve how our customers do business.   The NC/SC Boundary Certification was by completed by the Governor’s Proclamation Executive Order #118.  Plats and Notices have and are being filed in the respective impacted counties.  The infancy of this situation prevents even a guess to the repercussions that will follow.  Changes to the lien agent statute are being discussed.  Specifically, there is a need for a feature or procedure to cancel and or/remove filings.  Interested groups have been working together to come up with a suitable solution.  The Curative Statute Bill proposed by Investors Title is also still on the table.  An introduction of the NCLTA Board and Members to the new Commissioner of Insurance, Michael Causey, is in the works.  A good relationship with him and his department is key for us.  The Rating Bureau is hopeful for a rate increase sometime this year. 

Forward looking at our industry, change continues to drive our future.  The Secretary of State’s office is working to achieve its goal of all 100 counties facilitating E-recordings.   While certain counties do not E-record all document types, there are still some counties that do not provide the service at all.  Also of interest, the Secretary of State’s office has launched a pilot program for E-closings with Uwharrie Bank and North State Bank as participants.  E-notarization legislation has been introduced here that would allow remote electronic notarization.   Many of these initiatives will have an effect on real estate practitioners and the title industry are definitely issues to be monitored.

In closing as we are finishing the first quarter of 2017, we have seen an ebb and flow of production and hope that  the rest of the year will continue to be productive and successful.

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NC/SC Boundary Update

The re-surveyed boundary is complete.  Effective January 1, 2017, with regard to properties (in whole or in part) now found to be located in North Carolina, but formerly believed to be in South Carolina, Session Law 2016-23 addresses matters as diverse as voting, schools, licenses, in-state tuition, permits, ABC licenses, utilities, fire protection, county service districts, water and sewer districts, environmental compliance, taxes (income, gas, property and others) and title to real property.  Information regarding the surveys is available on-line at the office of the North Carolina Geodetic Survey.  http://www.ncgs.state.nc.us/Pages/County-and-State-Boundaries.aspx. 

The recordings of the NC Notices of Affected Parcels and Boundary Plats are now complete, as follows:

More detailed information is available here: NC/SC Boundary Memorandum

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2017 Convention

NCLTA 40th Anniversary Annual Convention

The Greenbrier

300 West Main Street, White Sulphur Springs, WV 24986

September 14th - 16th 

NCLTA is celebrating its 40th Anniversary this year!  We hope that you will join us for NCLTA’s annual convention which will be held at The Greenbrier on September 14^th - 16th.  The Greenbrier is a beautiful place for a great weekend getaway for you and your family.  The Greenbrier offers many activities that you can register to take part in, great food, and of course we will provide 6 hours of CLE, which includes one hour of ethics. 

Click on the link for further information. http://www.nclta.org/content/2017-annual-convention

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Forms Update

Effective August 1, 2016, the Forms Committee of the American Land Title Association (ALTA) adopted a substantially revised form of the standard Commitment for Title Insurance (also referred to as the “2016 Commitment”).  The form, entitled “ALTA Commitment for Title Insurance,” was originally adopted in June of 2006 and has now been revised effective August 1, 2016 (ALTA® Commitment for Title Insurance (Adopted 6-17-06, Revised 08-01-2016)).

This form updates and consolidates the two 2006 versions of the ALTA Commitment:  the ALTA Commitment Form (Adopted 6-17-06) and the ALTA Plain Language Commitment Form (Adopted 6-17-06).  While those two forms were similar in substance, there are variations between them.  Most importantly, the Forms Committee recognized court decisions holding title insurers and agents liable for negligence or negligent misrepresentation in the preparation of title insurance commitments.  The Committee approached this particular issue by including a bold-face “Notice” at the top of the form and incorporating it into the Conditions now contained in the Commitment (Condition 3(a)). The Notice specifically precludes third party liability and underscores that the procedures utilized to determine the insurability of the title are proprietary to the Company and create no liability to any person outside the terms of the Commitment.

Clear from the outset, the new form is different, being more detailed and specific about the coverages provided (or not provided) thereunder.  There are clarifications including:

(1)               That coverage is defined by contract, i.e. the Commitment itself, and is only an offer of insurance coverage, subject to its terms, and not the insurance itself. 

(2)               A Pro Forma Policy if one is requested is specifically addressed in the Conditions (Condition 8), to wit:  “A pro-forma policy neither reflects the status of Title at the time that the pro-forma policy is delivered to a Proposed Insured, nor is it a commitment to insure.”

(3)               It is a contract for insurance coverage only and is not an abstract, certification, opinion or other representation regarding the status of the title to the property described in the commitment.  Neither is it an assurance or agreement regarding closing or settlement services.

(4)               Liability is limited to the persons identified therein as the “Proposed Insured,” the amounts specifically stated therein as the “Proposed Policy Amount,” the ultimate coverages of the Policy (if issued), and matters not known to the Proposed Insured.  (See “Limitations of Liability” in the form.)

The ALTA Forms Committee was trying to address three major goals.  First, it was desired that a commitment make clear that is only insuring the title as it is described in the commitment.  It is not an abstract or opinion of title.  Second, the ALTA Forms Committee wanted to clarify a Company’s liability if a Proposed Insured suffered a loss as a result of reliance on an erroneous matter in the Commitment when it is issued.  Finally, the Committee explored adding a schedule for matters not addressed or insured by a policy of title insurance. It was decided that a schedule of informational notes would be inconsistent with the purpose of a commitment and would open companies to undefined liability and that goal was not adopted.

The Notice and Commitment to Issue Policy

The new Commitment begins with a Notice in all capital letters that disclaims liability for negligence in the search and examination of Title.  It asserts that the Commitment is an offer to issue one or more title insurance policies according to its terms, and nothing more.

The Notice is followed by a section headed “Commitment to Issue Policy.” This section not only states the limited purpose of the Commitment, but also indicates that the commitment terminates if the Requirements are not met within a period specified by the Company in the Commitment. This period continues to be one of six (6) months for commitments issued in North Carolina. This section also specifies that a Commitment is not effective until “the Company has entered in Schedule A both the specified dollar amount as the Proposed Policy Amount and the name of the Proposed Insured.”  It will be less likely going forward that a title insurance commitment will be issued with those fields for names and amounts as “To Be Determined.”

Conditions

The Conditions section of the 2016 Commitment contains definitions identical to those contained in the ALTA policy forms.  Sections 4 & 5 of the Commitment Conditions address the liability of the underwriting company based on the terms of a Commitment. Section 5 lists the conditions that limit the liability of the Company that might arise as a result of its amendment to the Commitment. Sections 5(a) and 5(c) limit the Company’s liability to expenses that occurred “in the interval between the Company’s delivery to the Proposed Insured of the Commitment and the delivery of the amended Commitment” that Insured would not have suffered “had the Commitment included the added matter when the Commitment was first delivered to the Proposed Insured.”  Section 5 also eliminates any liability for amendments requested by the Proposed Insured.  It also limits liability to the lesser of the Proposed Insured’s actual expenses incurred in good faith or the Proposed Policy Amount.

Section 6 reiterates that the liability of the insurer is based on contract and not negligence.  Only a Proposed Insured can assert a claim, and it is limited to the Proposed Policy Amount for its policy only.  The end of Section 6(e) in brackets is optional.  It is inconsistent with an ALTA 39 Authentication Endorsement, so a company may choose to use it or not. 

Section 9 on arbitration is much shorter than the policy version, also appears in brackets and is optional as well.

Schedule A

Schedule A begins with an optional set of “Transaction Identification Data” that the Commitment disclaims liability for in Section 5(e).  Otherwise, it is similar to other any Schedule A in the other commitments, but uses the new terms defined in the Commitment Conditions.

Schedule B, Part I - Requirements

Schedule B, Part I - Requirements includes four standard requirements not included in the previously existing ALTA Commitment. They are basic requirements and should be familiar as they have been being used in North Carolina for some time. They require identification of the proposed owner(s) and lender(s), payment of consideration for the transaction to be insured, payment of premium, fees and charges, and itemization of the documents required to be properly authorized, executed, delivered and recorded.  This last requirement (Item 4) contains the direction, “(Documents to be listed here)”. This is both a formatting and underwriting change and contemplates that the Commitment will contain a listing of the documents to be recorded, preferably in the proper recording order, in order to assure underwriting of possible intervening conveyances and the priority of easements and leases versus mortgages and address other necessary subordinations.  

Schedule B, Part II - Exceptions

Schedule B, Part II - Exceptions, now automatically includes a new disclaimer against re-publication of any “Covenant, Condition, Restriction or Limitation” that illegally discriminates against any protected class of persons and excludes coverage over any such exception for discriminatory covenants, conditions and restrictions.  It continues to include the “gap” exception for matters subsequent to the Commitment Date, but prior to the closing and recording, i.e. compliance with all Schedule B, Part I Requirements and satisfactory handling of any matters in this “gap” period.  Keeping this exception for matters occurring after the Effective Date of the Commitment was somewhat controversial as the issue was also addressed in Section 5 of the Commitment Conditions, but it was retained as an optional exception.  For North Carolina transactions, the exception needs to remain in order to emphasize the recording requirements and the obvious necessity of a title update before the policy is issued.

The Forms Committee also took the opportunity to address the following additional issues which are now part of the commitment form:

• streamline the document, including revising headings and reordering and restating certain Conditions;
• add definitions of terms included in the ALTA 2006 Owner’s and Loan policy forms for consistency;
• add, in the introductory paragraph to Schedule B, Part II, an exception for the terms and provisions of any lease or easement set forth in Schedule A as an estate or interest to be insured;
• add Subsection 6(d) of the Conditions, stating that the deletion or modification of a Schedule B, Part II Exception does not create an obligation to provide coverage beyond the terms of the Commitment or policy;
• add Section 7 of the Conditions  indicating that, if the Commitment is issued by an agent, the agent’s role is limited to the issuance of title insurance commitments and policies and the issuing agent is not the agent of the insurer for the purpose of providing closing or settlement services.

The changes to the form result in an updated, better-integrated document with clearer provisions and address issues relating to the delivery system ( e.g., Transaction Identification Data, agent’s role, ALTA Universal ID, proforma policies). Returning to a single form of Commitment adds clarity for customers and helps avoid potential confusion in court interpretation of the insurer’s obligations under the contract.

The two previous commitment forms, ALTA Commitment Form (6-17-06) and the ALTA Plain Language Commitment Form (6-17-06), are scheduled to be decertified on December 31, 2017.  Decertification means that the forms will no longer appear in the ALTA Policy Forms collection (www.alta.org/policy-forms).  The previous versions of the 2006 Commitment form have already been removed from the NC Filed ALTA Forms section of the NCLTA website (www.nclta.org). 

The 2016 form of the ALTA Commitment will begin to be used by NCLTA Members and other title insurers in North Carolina within the next few months.

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Legislative Update

The 2017 legislative session began on Wednesday, January 11, as state lawmakers met in Raleigh to be sworn in, to formally elect their leaders, and to handle other logistics, so they could hit the ground running when the legislature convened on January 25. As expected, Senator Phil Berger (R-Rockingham) was elected for a fourth term as President Pro Tempore of the Senate, while Representative Tim Moore (R-Cleveland) was elected for a second term as Speaker of the House. Both leaders are attorneys and serve in chambers with veto-proof majorities - 35 Republicans to 15 Democrats in the Senate and 74 Republicans to 46 Democrats in the House. Republican Dan Forest (R-Wake) will preside over the Senate as Lieutenant Governor.

The one-day session on January 11 was followed by a two-week break. This was a chance to give legislative leaders time to organize. The legislature officially started the 2017 session on Wednesday, January 25 at 12 noon.

Legislative bills introduced in previous legislative sessions are no longer “alive” for consideration by the 2017 General Assembly. Any legislative ideas that were introduced in previous years must be reintroduced this year for any further consideration. Usually each legislative session contains a number of legislative ideas that were introduced in previous legislative sessions but not enacted into law.

So far 322 House Bills and 239 Senate Bills have been introduced, for a total of 561 new legislative bills introduced this session.

 Two Republican and two Democratic House members have teamed up on a new proposal to repeal House Bill 2 that also would prohibit cities and counties from regulating bathroom access in private facilities. Rep. Chuck McGrady (R-Henderson), the primary sponsor of House Bill 186, said during a news conference that the legislature must act before HB2 causes more economic damage. The NCAA is reviewing bids for championship events in North Carolina and the state could miss out on opportunities over the law. House Bill 186 would repeal HB2 and allow cities and counties to adopt their own anti-discrimination protections, as Charlotte did a year ago, before HB2 blocked that ordinance. Under House Bill 186, however, local governments would not be able to extend anti-discrimination protections to privately owned restrooms, only to city-run facilities. The new bill would allow opponents of extended protections to vote on them through referendum elections if they collect enough voter signatures. Whether there will be enough support among Republicans in the House and Senate to pass legislation is still up in the air. Governor Roy Cooper -- who has floated his own compromise -- has voiced concerns about the proposal.

The legislature is considering legislation that would make elections for state District Court and Superior Court judges partisan. If the bill becomes law, District and Superior Court judicial candidates would need to go through a party primary, and general election ballots would include the candidates' party affiliation. Candidates who are not registered with a political party would need to go through a petition process to get their names on the ballot. Superior Court elections were switched from partisan to nonpartisan in 1996, and the legislature made the same change for District Court in 2001.

Governor Cooper is scheduled to deliver his first State of the State Address to a joint session of the legislature Monday March 13^th at 7:00 p.m. Senators will join House members in the House Chamber for Governor Cooper’s first address to the legislature since he took the office in January 2017. Governor Cooper is expected to outline his goals for his administration, with a heavy emphasis on education, the economy, and his state budget and funding requests.

The following bills may be of interest to title insurance companies, title agents, and real estate attorneys:

House Bill 3, Eminent Domain Const. Amendment, would amend the North Carolina constitution to prohibit condemnation of private property except for a public use (deletes reference to public benefit). Introduced by Representatives McGrady, Lewis, Goodman, and Malone and referred to the House Judiciary I Committee.

In Committee, the provisions of House Bills 3 and 10 (discussed below) were combined, into one bill, and approved. The bill passed the House and was sent to the Senate for consideration.

House Bill 10, Eminent Domain Statutory Revision, would amend North Carolina’s eminent domain statutes, to make conforming changes to outlined in House Bill 3. The bill would also specifically provide for utilities to be able to connect customers through condemnation. Introduced by Representatives McGrady, Lewis, Goodman, and Malone and referred to the House, Public Utilities Committee, and if favorable report, to House Judiciary II Committee.

House Bill 31, Material Fact Disclosure Clarifications, provides that if offering property for conveyance, rent or lease, it shall not be deemed a material fact that the real property is included in a comprehensive transportation plan, nor shall it be considered a required disclosure under NCGS 47E-4; provided however that a party or agent to the real estate transaction may not knowingly make a false statement regarding any such fact. Introduced by Representatives Hastings, Stone, Davis and Floyd and referred to the House Judiciary I Committee, and if favorable to the House Transportation Committee.

In Committee, an amendment was offered by Representative Duane Hall (D-Wake) to clarify when disclosures are required. The bill as amended provides that it is deemed material if the real property or any portion thereof is included in a financially constrained transportation plan, and disclosure would be required. The bill states that the mere fact that real property is included in a comprehensive transportation plan that is not financially constrained shall not, standing alone, be deemed material. The bill retains the provision about a broker not knowingly making a false statement regarding the property’s inclusion in a transportation plan. The bill has received endorsements from the Home Builders Association, Realtors Association and the Real Estate Commission. With these changes, the House Judiciary I Committee gave the bill a favorable report.

The debate on the House floor turned into a question-and-answer session as lawmakers tried to discern the impact of House Bill 31.  Representatives Kelly Hastings (R-Gaston) and Scott Stone (R-Mecklenburg), the bill sponsors, were subjected to questions on what information should be disclosed to the buyer of a residential property. After a handful of lawmakers questioned Stone and Hastings, House Speaker Tim Moore -- with nine more lawmakers signed up to speak -- suggested the bill be displaced so members could get more information on it. Representative Frank Iler (R-Brunswick), however, suggested the bill be re-referred to the House Transportation Committee, which is what ultimately occurred. So the next step for the bill would be a hearing in the House Transportation Committee.

House Bill 80, Bona Fide Ownership of Timber Parcels, would protect bona fide owners of timber from the unlawful cutting or removal of timber from their lands. The bill would amend NCGS 1-539.1 to provide that a person, firm, or corporation that cuts or removes wood, timber, shrubs, or trees from the property of another and fails to prospectively establish bona fide ownership pursuant to this section would be presumed to have acted with willfulness and knowledge, and shall liable for double the value of the timber or crops cut or damaged as well as being subject to criminal penalties.  A landowner would establish “bona fide ownership” under this section by mutual agreement of the owners of the adjoining parcels prior to the cutting or removal of the wood, timber, shrubs, or trees. In the event of a dispute over a boundary line or failure of the owners to reach mutual agreement, the owner of the parcel seeking to cut or remove the wood, timber, shrubs, or trees would bear the cost of a boundary line survey required to establish only the location of the boundary line between the affected parcels. Introduced by Representative Torbett and referred to the House Judiciary III Committee.

House Bill 144, Credit Union/Trust Institution Changes, would make various changes to the statutes applicable to credit unions and trust institutions. The bill would change the reference to banks, savings and loan institutions, etc. in various statutes to “federally insured depository institution lawfully doing business in this State”.

Introduced by Representatives Szoka, J. Bell, Howard, and Henson and referred to the House Banking Committee.

House Bill 181, First Responders Act of 2017, would among other things provide a property tax homestead exclusion for surviving spouse of qualifying “emergency personnel”, which would include firefighting, search and rescue, or emergency medical services personnel or any employee of any duly accredited State or local government agency possessing authority to enforce the criminal laws of the State who (i) is actively serving in a position with assigned primary duties and responsibilities for prevention and detection of crime or the general enforcement of the criminal laws of the State and (ii) possesses the power of arrest by virtue of an oath administered under the authority of the State. Introduced by Representatives Warren, Clampitt, Ford and Potts and referred to the House Finance Committee, if favorable to House Judiciary III Committee, and if favorable, to House Transportation Committee.

House Bill 227, Preserve Tenancy By The Entirety, would make conforming changes to various North Carolina statutes to clarify that tenancy by the entirety is preserved in North Carolina in light of the Supreme Court of the United States case of Oberfefell v. Hodges, as recommended by the General Statutes Commission. Introduced by Representative Davis and referred to the House Rules Committee.  

House Bill 228, Postpone Assumed Name Revisions, would postpone the implementation of new Article 14A of Chapter 66 of the General Statutes, which revised the law on assumed business names, as recommended by the General Statutes Commission. I understand the postponement is due in part to a lack of funding for the program which was to be implemented by the Secretary of State’s Office. Introduced by Representative Davis and referred to the House Commerce Committee.

House Bill 229, GSC Technical Corrections 2017, would make technical changes to various statues, as recommended by the General Statutes Commission. The bill would, among other things, repeal NCGS 39-33 (method of release of limitation of power) and 39-34 (method prescribed in 39-33 not exclusive). Introduced by Representative Davis and referred to the House Rules Committee.

House Bill 236, AOC Omnibus Bill, would make various changes to the law as requested by the Administrative Office of the Courts (AOC). The bill would provide for the clerk to appoint an interim guardian ad litem on the clerk's own motion. The bill would allow the clerk to extend the time for filing inventory in the property of the deceased. The bill would provide for issuance of an order for an arrest when a person fails to appear after being served with a show cause in a civil proceeding. The bill would amend how costs in administration of estates are assessed.

The bill would address the effect of orders entered by Clerks of Superior Court that may not contain a file stamp, which is a provision supported by NCLTA. This provision was included in a bill in the 2016 legislative session, but was not enacted into law that session. By way of background, there are some Clerk’s Offices that apparently do not always file stamp orders that are signed by the Clerk. So although the Clerk may sign, record and enter an order in their docketing system, it may not contain a file stamp. A Court of Appeals case, In re Thompson, ruled that such an order was not effective and set aside subsequent orders and proceeding that relied on the order that lacked a file stamp. This has caused great concern among Clerks and others, such as title insurance companies that rely on orders as a part of the chain of title.

I worked with the Administrative Office of the Courts (AOC) to draft language to address this issue in 2016, and identical language was included in House Bill 236. The language clarifies that the clerk’s order is valid and can be relied upon regardless of whether it contains a file stamp. The provisions of the bill would apply to future orders and orders entered previously – so it would have retroactive application. Introduced by Representative Turner and referred to the House Judiciary I Committee.

House Bill 239, Reduce Court of Appeals to 12 Judges, would reduce the number of judges on the Court of Appeals to 12. The bill provides that on or after January 1, 2017, whenever the seat of an incumbent judge becomes vacant prior to the expiration of the judge's term due to the death, resignation, retirement, impeachment, or removal of the incumbent judge, that seat is abolished until the total number of Court of Appeals seats is decreased to 12.

The bill would also provide for an appeal directly to the Supreme Court for cases from the NC Business Court or cases designated as complex business cases or exceptional under Rule 2.1 of the General Rules of Practice. The bill would also allow discretionary review by the Supreme Court when the subject matter of the appeal is important in overseeing the jurisdiction and integrity of the court system. Introduced by Representatives Burr, Lewis and Stevens and referred to the house Judiciary IV Committee.

The bill was considered and approved by the full House on Thursday and sent to the Senate for consideration.

House Bill 240, GA Appoint For District Court Vacancies, provides that District Court vacancies would be filled by appointment of the General Assembly. Introduced by Representatives Burr, K. Hall, Saine, and Bumgardner and referred to the house Judiciary IV Committee.

The bill was considered and approved by the full House and sent to the Senate for consideration.

House Bill 241, Special Sup. Ct. Judgeship Appointed by the GA, provides that District Court vacancies would be filled by appointment of the General Assembly. Introduced by Representatives Burr, K. Hall, Saine, and Bumgardner and referred to the house Judiciary IV Committee.

The bill was considered and approved by the full House and sent to the Senate for consideration.

House Bill 261, Displaced Residential Land Tax Deferral, would create a property tax deferral program for permanent residences that are subsequently rezoned for nonresidential uses. The bill provides that displaced residential land is designated a special class of property under Section 2(2) of Article V of the North Carolina Constitution and must be appraised, assessed, and taxed in accordance with this section. For purposes of this section, "displaced residential land" means a person's legal residence, including the dwelling, the dwelling site, and related improvements. The dwelling may be a single‑family residence, a unit in a multifamily residential complex, or a manufactured home. The bill establishes the procedure for an owner to apply for the designation. Introduced by Representatives Millis, Howard and Warren and referred to the House State and Local Government II Committee, and if favorable House Finance Committee.

House Bill 263, UCC: Accord & Satisfaction Modification, would modify the provisions of the Uniform Commercial Code applicable to accord and satisfaction by use of instrument. The bill would amend NCGS 25-3-311(a) to provide that this statute applies it the claimant obtained payment of the instrument or failed to return the instrument within 90 days of receipt (was, just obtained payment of the instrument).  Introduced by Representative Brody and referred to the House Commerce Committee, and if favorable, House Judiciary Committee

House Bill 264, Disqualify Certain Property From PUV, would disqualify property which contains a solar energy electric facility where the energy generated by the system is not solely used by the owner for the benefit of the land from the present-use value classification. Introduced by Representatives Dixon, J. Bell, Collins and Adams and referred to the House Energy Committee.

Senate Bill 34, Eminent Domain Const. Amendment, would amend the North Carolina constitution to prohibit condemnation of private property except for a public use (deletes reference to public benefit). Introduced by Senator Jackson and referred to the Senate Rules Committee.

Senate Bill 35, Eminent Domain Statutory Revision, would amend North Carolina’s eminent domain statutes, to make conforming changes to outlined in House Bill 3. The bill would also specifically provide for utilities to be able to connect customers through condemnation. Introduced by Senator Jackson and referred to the Senate Rules Committee.

Senate Bill 99, DOI Report Certain CTR Data, would provide for the reporting by the Department of Insurance of certain aggregate property insurance consent to rate data, as recommended by the Legislative Research Commission Committee on Regulatory and Rate Issues in Insurance. The bill does not apply to the North Carolina Title Insurance Rate Bureau or require any reporting of rate data of title insurance. Introduced by Senators Lee, Ford and Meredith and referred to the Senate Commerce and Insurance Committee, and if favorable to the Senate Rules Committee.

Senate Bill 113, Credit Union/Trust Institution Changes, would make various changes to the statutes applicable to credit unions and trust institutions. The bill would change the reference to banks, savings and loan institutions, etc. in various statutes to “federally insured depository institution lawfully doing business in this State”. Introduced by Senators Gunn, Horner and Dunn and referred to the Senate Rules Committee.

Senate Bill 114, Annual Report Modernization, would revise the laws governing the submission of annual reports by various business entities to the Secretary of State. The bill would require non-profit corporations to file annual reports with the Secretary of State; similar to the requirements for for-profit corporations. Annual reports would be filed electronically. The corporation would be required to provide an email address for the corporation in the annual report, as well as identify, in addition to its officers, “any other person who has actual authority to bind the corporation”.

The purpose of this bill is to add non-profits to filing of annual reports so attorneys and others will know who the officers are, and to strengthen the penalty for not providing all required information, to encourage compete and accurate records. Proponents of the bill state that Senate Bill 114 should allow title and corporate attorneys who are checking the records to see if resolutions and other similar documents contain and/or are executed by the proper officers or persons who hold themselves out as having the authority to sign documents. The intent is to give those dealing with corporations a way to verify “authority” by these records.

The bill would allow the Secretary of State to levy a $200 civil penalty on the corporation if the annual report does not contain all required information. The bill sets the fee for filing an annual report electronically at $125. There would be no annual report filing fee for a corporation organized under Ch 55A of the General Statutes (non-profit corporation). Introduced by Senators Wells and Tarte and referred to the Senate Judiciary Committee, if favorable to Senate Commerce Committee, and if favorable, to Senate Rules Committee.

Senate Bill 203, Establish Ownership of Mineral Rights, would establish a uniform procedure to determine title to oil, gas or mineral rights. The bill provides that where it appears on the public records that the fee simple title to any oil, gas, or mineral interest in an area of land has been severed or separated from the surface fee simple estate of that land and the interest is not currently being mined, drilled, worked, or operated, or in the adverse possession of another, or that the record title holder of any oil, gas, or mineral interest has not listed the same for ad valorem tax purposes in the county in which the oil, gas, or mineral interests are located for a period of 10 years prior to the effective date of this section, the oil, gas, or mineral interests shall be deemed to have merged with the surface fee simple estate subject to the interests and defects as are inherent in the provisions and limitations contained in the muniments of which the chain of record title is formed --- provided, however, the title holder on the surface fee simple estate has the legal capacity to own land in this State and has an unbroken chain of title of record to the surface fee simple estate of the area of land for at least 30 years and the surface fee simple estate is not in the adverse possession of another.

The bill provides that every person claiming any oil, gas, or mineral interest that is severed from the surface fee simple estate as provided above shall register the oil, gas, or mineral rights with the register of deeds office in the county or counties in which the oil, gas, or mineral rights are located. The registration would be accompanied by a deed demonstrating ownership of the oil, gas, or mineral rights. Any oil, gas, or mineral rights which are severed from the surface fee simple estate and not registered with the register of deeds office in the county or counties in which the minerals are located by January 1, 2020, shall be null and void, and the oil, gas, or mineral rights shall merge with the surface fee simple estate. The bill provides that any oil, gas, or mineral interests registered under the provisions of NCGS 1‑42.1 through NCGS 1‑42.9 are not affected by this section Introduced by Senators Foushee and Woodard and referred to the Senate Rules Committee.

______________________________

For more information about legislation described in this article, feel free to contact me at dferrell@vanblacklaw.com or (919) 754-1171.  Information is also available on the General Assembly’s website:  www.ncga.state.nc.us.

Prepared By:  David P. Ferrell, Esq. - NCLTA Lobbyist

VANDEVENTER BLACK LLP

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D. Donovan Merritt

Vice President and State Underwriting Counsel - Chicago Title

Direct: 919.719.5243 | Cell: 919.609.8620

Wells Fargo Capitol Center

150 Fayetteville Street, Suite 1120

Raleigh, NC 27601

Phone: 919.833.6900

Facsimile: 919.833.6905

don.merritt@ctt.com

Editorial Committee Chair

D. Donovan Merritt

don.merritt@ctt.com

Executive Staff

Tracy Steadman, Executive Director

exec@nclta.org

Copyright ©2017 North Carolina Land Title Association

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