Can a California county recorder pull back base recording fees that the county deposited in the general fund, or offset them against other county charges?

Plain-English summary

California county recorders charge a "base recording fee" of up to $10 for the first page and $3 for each additional page when they record and index documents like deeds, deeds of trust, liens, and other land instruments. The statute, Government Code section 27361(a), says those fees are collected "to reimburse the county for the costs of services rendered." A specific portion ($1 of each additional-page fee) goes to the general fund by statute, and another portion ($1 of each page) is earmarked for modernization of the county recording system. The dispute the AG resolved here was about the remaining portion: who gets to use it and what happens if the county deposits it into the general fund and uses it to pay for things other than the recorder's office.

State Treasurer Fiona Ma asked the AG, after one county recorder asserted that the county had been wrongly diverting "his" recording fees into the general fund and that he wanted several years' worth back. The recorder also proposed an indirect remedy: hold back other charges he collects for the county to "offset" the supposed shortage. The AG rejected both ideas.

The plain text of section 27361(a) says the fees are collected "to reimburse the county" for the costs of recording services. The opinion reads "the county" as the corporate entity, not the recorder's office in particular. The fees belong to the county. The board of supervisors, not the recorder, has the constitutional and statutory authority to decide how to budget them. The State Controller's accounting regulations describe the general fund as the catch-all for revenue not specifically directed elsewhere, and section 27361(a) does not direct these fees elsewhere. The 2009 legislative history (Senate Bill 676) confirms the goal: cover the cost of services from the people who use them so general taxpayers don't subsidize them, an across-the-county-budget objective, not a fund-the-recorder objective.

The recorder's offset theory failed at a more basic level. There is no right to offset because there is no underlying right to recover. Even if certain "excess" fees existed (the AG flagged that excess fees can sometimes be unauthorized taxes under article XIII C), the recorder cannot claim them, so cannot offset to recover them.

The narrow practical consequence: a board of supervisors choosing to deposit base recording fees into the general fund (after honoring the modernization carve-out and the $1 first-page general-fund mandate) and then appropriating less than the recording revenue back to the recorder's office is doing nothing wrong under section 27361. Recording fees are county revenue, not recorder revenue.

What this means for you

The conclusions below reflect the law as the AG read it in August 2021. Statutes can change. Verify before relying on a specific fee structure or accounting practice.

County recorders

The opinion holds that a county recorder has no separate office-level claim on base recording fees collected under Government Code section 27361(a). Those fees belong to the county, and the recorder cannot offset them against other county collections to recover them indirectly.

County counsel and auditor-controllers

The opinion holds that section 27361(a) base recording fees are ordinary county revenue subject to the board of supervisors' budget discretion. The opinion identifies two carve-outs: the $1 modernization portion under subdivision (c) (restricted to modernized creation, retention, and retrieval of recorded documents) and the $1 portion of each additional-page fee under subdivision (b) (deposited in the general fund). The opinion expressly notes it does not resolve any article XIII C tax issue if fees exceed cost-of-service.

Members of the public

The opinion holds that base recording fees are county revenue and may be used for general county purposes within statutory limits. The opinion flags but does not resolve the question of when a recording fee that exceeds cost-of-service becomes a "tax" requiring voter approval under California Constitution article XIII C.

Local-finance observers

The opinion confirms that statute-authorized recording fees, except for the two earmarked carve-outs, flow into the county general fund rather than being siloed to the recorder's office.

Common questions

Q: Does the recorder run a separate fund?
A: Some recording-related revenue must go to dedicated funds (the modernization carve-out under section 27361(c) and the social-security-truncation fee under section 27361(d) are examples). The base recording fee under section 27361(a) is not one of them. The county may deposit it in the general fund.

Q: What about the $1 of the additional-page fee that goes to the general fund? A: Section 27361(b) explicitly directs that $1 of each additional-page fee "shall be deposited in the county general fund." The AG flagged that as an explicit direction. Subdivision (a) does not say where its portion goes, but the AG read the silence as allowing general fund deposit because the fees are for "the county."

Q: Can the recorder simply keep "excess" fees in the recorder's office? A: No. Government Code section 24350 requires the recorder to "pay into the county treasury" the fees collected. Withholding them, even pending a claimed offset, would conflict with that statute and with the board's budget authority.

Q: What about the statute of limitations the recorder mentioned? A: Some agencies use offset to avoid a statute of limitations bar on a direct refund claim (the AG cited Robert F. Kennedy Medical Center v. Dept. of Health Services as an example). But you cannot avoid a statute-of-limitations bar by offsetting if you have no underlying right to begin with. The AG's first holding (no underlying right) defeats the offset theory regardless of timing.

Q: Is there any scenario where "excess" base recording fees would be unlawful? A: Possibly. Jacks v. City of Santa Barbara and California Constitution article XIII C suggest that fees significantly exceeding reasonable cost can become taxes that require voter approval. The AG did not resolve that here, just flagged it.

Background and statutory framework

California county budgeting is governed by Government Code sections 25214, 29089, 29120-29130, 29300, and 29301, plus the State Controller's accounting regulations in Title 2 of the California Code of Regulations. The board of supervisors adopts the annual budget, identifies funding sources, and creates funds as needed. Hicks v. Bd. of Supervisors establishes that the budget power belongs to the board and cannot be delegated to a department head. Albright v. City of South San Francisco confirms that public funds must be applied to public purposes and only as the budget authorizes.

The general fund is described in section 29301: "money received into the treasury and not specially appropriated to any other fund." The State Controller's Title 2 regulations call it the fund "available for any authorized purpose."

Government Code section 27361 sets recording fees:

• Subdivision (a) sets the base fee (up to $10 first page, $3 each additional page) and says the fees reimburse the county for recording and indexing costs.
• Subdivision (b) requires $1 of each additional-page fee to go to the general fund.
• Subdivision (c) requires $1 of each page fee (first page and additional pages) to support modernization of the recording system.
• Subdivision (d) authorizes a social-security-number truncation program fee.

The recorder's role is to record and index documents accurately, with the result that members of the public can readily locate them. First Bank v. East West Bank describes recording and indexing as "two distinct functions." Recording fees flow to the county under section 24350, with the recorder responsible for paying them into the treasury monthly.

Senate Bill 676 (Statutes 2009, chapter 606) raised maximum fees for many county services and added the "to reimburse the county for the costs of services rendered" language to section 27361(a). The legislative analysis bemoaned that prior fees did not cover service costs, leaving the difference to come from general-fund tax revenue. Senator Yee's author statement reframed the issue: users of services should pay for them, not "indigent health care, libraries, and law enforcement" subsidized by taxpayers. That history confirms the fees were raised to give the county more revenue, not to give the recorder a personal funding stream.

The State Controller's Accounting Standards and Procedures for Counties recognizes that the costs being reimbursed are not just direct costs of recording but indirect costs as well: rent, heat, light, supplies, management, supervision, accounting, budgeting, payroll, personnel, purchasing, and centralized data processing. Cal. Public Records Research, Inc. v. County of Yolo applies that broad cost concept to recorder copying fees.

Citations and references

Statutes:

• California Government Code section 27361 (recording fees)
• California Government Code section 24350 (recorder pays fees into treasury)
• California Government Code section 29301 (general fund definition)
• California Government Code section 25214, 29089 (board budget powers)
• California Government Code section 29120 (no obligations exceeding appropriations)
• California Constitution, article XVI, section 18 (debt limit); article XIII C (taxes)

Cases:

• Hicks v. Bd. of Supervisors, 69 Cal.App.3d 228 (1977) (board's non-delegable budget authority)
• Golightly v. Molina, 229 Cal.App.4th 1501 (2014) (budget as fundamental legislative function)
• People v. Jefferson, 21 Cal.4th 86 (1999) (statutory interpretation goal)
• Hassan v. Mercy American River Hospital, 31 Cal.4th 709 (2003) (statutory context)
• Cal. Public Records Research, Inc. v. County of Yolo, 4 Cal.App.5th 150 (2016) (recorder's indirect costs)
• Jacks v. City of Santa Barbara, 3 Cal.5th 248 (2017) (excess fees as taxes)
• First Bank v. East West Bank, 199 Cal.App.4th 1309 (2011) (recording vs. indexing)

Source

• Landing page: https://oag.ca.gov/opinions/yearly-index
• Original PDF: https://oag.ca.gov/system/files/opinions/pdfs/20-101_0.pdf

Original opinion text

TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
ROB BONTA
Attorney General
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OPINION
of
ROB BONTA
Attorney General
LAWRENCE M. DANIELS
Deputy Attorney General

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No. 20-101
August 5, 2021

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THE HONORABLE FIONA MA, TREASURER OF THE STATE OF
CALIFORNIA, has requested an opinion on two questions relating to “base recording fees,” which are fees collected by a county recorder for recording and indexing documents pursuant to Government Code section 27361, subdivision (a). QUESTIONS PRESENTED AND CONCLUSIONS 1. May a county recorder recover base recording fees that were deposited in the county’s general fund? No. A county recorder may not recover base recording fees that were deposited in the county’s general fund because these fees belong to the county as a whole, not to the recorder separately. 2. May the recorder recoup any base recording fees that exceed the costs of recording and indexing services by offsetting other charges that the recorder collects for the county? 1

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No. The recorder has no right to base recording fees, including “excess” base recording fees. Therefore, the recorder may not use an offset to recover them indirectly. BACKGROUND Every year, a county’s board of supervisors determines the budget of each county department, including the budget of the county recorder. The budget allocates county revenues, which are maintained in various funds. Revenues that may only be used for specific purposes—such as certain fees or taxes—are typically channeled into special funds for dedicated functions. Revenues that may be used for any county purpose are usually deposited into the county’s general fund. This opinion involves the allocation of certain revenue collected by county recorders. County recorders charge “base” recording fees for recording and indexing each page of a document, plus additional recording fees in specified circumstances. Under Government Code section 27361, subdivision (a), the general purpose of base recording fees is to reimburse the county for the costs of recording and indexing services. The questions presented here arise out of one county recorder’s assertion that the county was required to maintain base recording fees in a special fund dedicated to the recorder’s office, instead of in the county’s general fund. This county recorder also asserts that he is entitled to recoup several years’ worth of base recording fees that exceeded the recorder’s costs in those years. These assertions have raised threshold questions about whether a county may deposit base recording fees in the general fund and whether and how a recorder may recover them. To answer these questions, we begin by reviewing the applicable law regarding county budgeting, county recorders, and recording fees. By statute, a county’s board of supervisors must “adopt an annual budget” and identify “[t]he means of financing the budget requirements.” 1 “[T]he board of supervisors Gov. Code, §§ 25214, subd. (a), 29089, subd. (g); see Cal. Code Regs., tit. 2, § 958, subd. (a) (defining “budget” as “[a] comprehensive plan of financial operations embodying an estimate of proposed requirements for expenditure appropriations and provisions for reserves for a given period and the means of financing such requirements, as expressed in the official actions of the board”); Golightly v. Molina (2014) 229 Cal.App.4th 1501, 1517 (“The approval of a county budget is a fundamental legislative function and the power and obligation to enact a county’s budget is vested by law in the board of supervisors”). Under specified procedures, the board may make revisions to the county budget. (Gov. Code,
§§ 29125, 29130; see generally 60 Ops.Cal.Atty.Gen. 76, 76-80 (1977) [discussing the statutory procedures for post-budgetary appropriation transfers].) 1

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has wide discretion in budgetary matters, including discretion in devising budgetary units 2 and classifying expenditures.” The board must create “those funds as are necessary for the proper transaction of the business of the county, and may transfer money from one fund 3 to another, as the public interest requires.” Also, “[t]he income and revenue paid into the 4 county treasury shall be at once appropriated to and kept in separate funds.” The county’s “general fund” is “[t]he fund that is available for any authorized purpose and which is, therefore, used to account for all revenues and all expenditures not provided for in other funds.” 5 In financial matters, a county must follow uniform accounting practices as set 6 forth in the State Controller’s accounting regulations and manual.

Hicks v. Bd. of Supervisors (1977) 69 Cal.App.3d 228, 244. In accounting parlance, a budget unit is an organizational part—often, but not always, a department—that is authorized to receive and expend appropriations. (See Cal. Code Regs., tit. 2, §§ 943, subd. (c) [defining “budget unit” as “that classification of the expenditure and reserve requirements of the Budget into appropriately identified accounting or cost centers deemed necessary or desirable for control of the financial operations”]; Sacramento County, Office of Budget and Debt Management, Key Budget Terms, at https://bdm.saccounty.net/Pages/KeyBudgetTerms.aspx [“Budget units are often departments and the terms are sometimes used interchangeably, but not all budget units are departments and the budgets for some departments are contained in multiple budget units”].) 2

Gov. Code, § 25252; see Cal. Code Regs., tit. 2, § 910 (defining “fund” as “[a] sum of money or other resources segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations and consisting of an independent fiscal and accounting entity”). 3

4

Gov. Code, § 29300.

Cal. Code Regs., tit. 2, § 921, subd. (a); see Gov. Code, § 29301 (“The general fund consists of money received into the treasury and not specially appropriated to any other fund”). 5

Gov. Code, § 30200; Cal. Code Regs., tit. 2, §§ 904, 956; Community Development Com. v. County of Ventura (2007) 152 Cal.App.4th 1470, 1488; 63 Ops.Cal.Atty.Gen. 512, 519, fn. 7 (1980); Office of the Controller, Accounting Standards and Procedures for Counties (2020), at https://sco.ca.gov/Files-ARD-Local/ASP_manual.pdf; see generally Cal. Code Regs., tit. 2, div. 2, ch. 2, subchs. 1-2.5, §§ 901-1027.6. 6

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The board of supervisors’ budgeting power may not be delegated to a county 7 officer. A county officer may not incur or pay any obligations exceeding the amount appropriated by the board for each budget unit. 8 A county recorder is a county officer. 9 A county recorder’s duties include filing instruments, papers, and notices associated with land transactions, births, deaths, and marriages; and certifying, copying, and maintaining records of official county documents. 10 In addition, the recorder must index each recorded document so that a member of the public may readily locate it upon a search. 11 We have previously observed that “[t]he Legislature has established a comprehensive system governing the recording of documents.” 12 The “general purposes Hicks v. Board of Supervisors, supra, 69 Cal.App.3d at p. 236 (“While the Government Code provisions for county charges . . . should alert a responsible board of supervisors to the need to appropriate funds to pay the charges authorized, these provisions do not and could not delegate the budgetary power to county executive officers”), citing McCabe v. Carpenter (1894) 102 Cal. 469, 470. 7

Gov. Code, § 29120; see Cal. Const., art. XVI, § 18 (generally prohibiting a county from incurring debt or liability exceeding that year’s revenue absent the assent of twothirds of county voters); Cal. Code Regs., tit. 2, § 958, subd. (e) (defining “appropriations” as “[a]uthorizations by the board to make expenditures and to incur obligations for specific purposes”); Albright v. City of South San Francisco (1975) 44 Cal.App.3d 866, 902 (“An expenditure of public funds is regulated solely by constitutional and statutory provisions and must be confined to public purposes”). 8

Gov. Code, § 24000, subd. (g). The requester specifies that the recorder is elected (as opposed to appointed), but that fact is irrelevant here. (77 Ops.Cal.Atty.Gen. 82, 82, fn. 2 (1994) [“The questions refer to an ‘elected’ sheriff and to an ‘elected’ district attorney. For purposes of this analysis, we find no talismanic significance respecting the manner of selection of these officers”].) 9

See generally Civ. Code, §§ 1169-1220, 2940–2941; Code Civ. Proc., § 2103; Fam. Code, §§ 300, 359, 423; Gov. Code, §§ 27201–27399; Health & Saf. Code, §§ 103525, 103535, 103625, 103650; Cal. Assn. of Counties, County Structure, County Clerk, at
https://www.counties.org/county-office/county-clerk.
10

Gov. Code, §§ 27230-27265; see First Bank v. East West Bank (2011) 199 Cal.App.4th 1309, 1316-1317 (explicating the “two distinct functions” of recording and indexing). 11

63 Ops.Cal.Atty.Gen. 905, 905 (1980); see Gov. Code, tit. 3, div. 2, pt. 3, ch. 6,
§ 27200 et seq.; Gov. Code, § 27320 (describing the required manner of recording documents). 12

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of such laws are to protect purchasers of property from monetary loss by providing a system of notification of the various interests in such property, and to preserve and provide access 13 to important records and documents.” Upon providing these services, a county recorder generally must “charge and collect for the use of his or her county and pay into the county treasury on or before the fifth day of each month the fees allowed by law.” 14 To this end, a county recorder must collect 15 16 17 various fees, including charges for recording and indexing, document certification, copies, 18 and vital records searches and certificates. 19 ANALYSIS 1.

May a county recorder claim base recording fees from the county’s general fund?

As noted, base recording fees are the recording and indexing fees collected by the county recorder pursuant to Government Code section 27361, subdivision (a): The fee for recording and indexing every instrument, paper, or notice required or permitted by law to be recorded shall not exceed ten dollars ($10) for recording the first page and three dollars ($3) for each additional page, to reimburse the county for the costs of services rendered pursuant to this subdivision . . . . 20 13

63 Ops.Cal.Atty.Gen., supra, at p. 907, internal citations omitted.

Gov. Code, § 24350; see also Health & Saf. Code, §§ 102285 (the county recorder is the local registrar of marriages), 103610 (“The money collected by the local registrar shall be paid by him or her into the county or city treasury”). 14

15

Gov. Code, § 27360.

Civ. Code, § 1471, subd. (f); Gov. Code, §§ 27361, 27361.2, 27361.3, 27361.4, 27361.8, 27361.9, 27372, 27387, 27388, 27388.1, 27397; Rev. & Tax. Code, § 480.3. 16

17

Gov. Code, § 27364; Health & Saf. Code, § 103625.

Code Civ. Proc., § 2103, subd. (d); Gov. Code, § 27366; Health & Saf. Code,
§ 103625.
18

Health & Saf. Code, §§ 100425, 103525, 103525.5, 103625, subd. (f), 103650; Pen. Code, § 14251. 19

20

Gov. Code, § 27361, subd. (a); see Gov. Code, § 27279 (defining “instrument” in this 5

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Subdivision (b) of section 27361 mandates that $1 of the fee for each additional page “shall 21 be deposited in the county general fund.” And subdivision (c) mandates that $1 of the fee for the first page and $1 of the fee for each additional page must exclusively support the “modernized creation, retention, and retrieval of information in each county’s system of recorded documents.” 22 Consequently, the only question is how to allocate the remaining portion of these recording fees—up to $9 for the first page and up to $1 for each additional page. We are asked whether, if this remaining portion of the base recording fees is deposited in the county’s general fund—which also finances other county departments besides the recorder’s office—the recorder may rightly demand such fees from the county. As we will explain, the recorder is not entitled to recover these fees from the county. We arrive at this conclusion by applying well-settled principles of statutory interpretation. When construing a statute, our goal is to ascertain legislative intent to effectuate the purpose of the law. 23 In determining that intent, we first turn to the words of the statute, 24 giving them their plain meaning. We interpret these words in the context of the statutory framework. 25 If the statutory language is not ambiguous, then we follow the plain meaning context as “a written paper signed by a person or persons transferring the title to, or giving a lien on real property, or giving a right to a debt or duty”). Section 27361, subdivisions (a)(1) and (a)(2)—not at issue here—are “additional fees” that the recorder “may charge” for recording documents deviating from specified print and dimensions, respectively. Section 27361, subdivision (d), specifies another fee that the recorder also “may charge,” for the “social security number truncation program.” (Gov. Code, § 27361, subd. (d)(1).) Gov. Code, § 27361, subd. (b). Despite the direction in subdivision (b) that $1 of the charge for recording each additional page be placed in the general fund, subdivision (b)’s mandate differs from that of subdivision (a) in two key respects. First, subdivision (b) declares no purpose for the $1, whereas subdivision (a) declares that its purpose is “to reimburse the county for the costs of services rendered pursuant to this subdivision.” Also, subdivision (b) explicitly requires that its portion be deposited in the general fund, whereas subdivision (a) does not speak to this question. Nonetheless, as explained below, the portion of subdivision (a) collected for county reimbursement may properly be deposited in the general fund. 21

22

Gov. Code, § 27361, subd. (c).

23

People v. Jefferson (1999) 21 Cal.4th 86, 94.

24

People v. Gonzalez (2017) 2 Cal.5th 1138, 1141.

25

Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 715. 6

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without needing to resort to extrinsic sources. Otherwise, we may consider the statute’s 27 legislative history in determining legislative intent. 26

We accordingly examine Government Code section 27361, subdivision (a) (section 27361(a)) in light of the entire statute in discerning its meaning. Section 27361(a) provides that the base recording fees are “to reimburse the county for the costs of services rendered pursuant to this subdivision[.]” To “reimburse” is “to make repayment to for expense or loss incurred” and “to pay back; refund; repay.” 28 The base recording fees are thus collected to repay the county for the expenses it incurred for the costs of services under section 27361(a). 29 Section 27361(a) therefore plainly conveys that the fees are collected for the county, not for the recorder. And neither section 27361(a) nor any other law empowers the recorder to recover these fees. 30 Instead, as detailed above, the board of supervisors determines the amount of the recorder’s appropriations.

Los Angeles County Metropolitan Transportation Authority v. Alameda Produce Market, LLC (2011) 52 Cal.4th 1100, 1107. 26

27

ZB, N.A. v. Super. Ct. (2019) 8 Cal.5th 175, 189.

The Random House Dict. of the English Language (2d ed. unabridged 1987) p. 1625, col. 2; accord, https://www.merriam-webster.com/dictionary/reimburse (to reimburse is “to pay back to someone: repay” or “to make restoration or payment of an equivalent to”). 28

These costs may comprise not only the recorder’s direct costs but the indirect costs to the county of overhead and operating expenses as well, including “rent, heat, light, supplies, [and] management and supervision.” (Office of the Controller, Accounting Standards and Procedures for Counties, supra, at pp. 602, 622; see Cal. Public Records Research, Inc. v. County of Yolo (2016) 4 Cal.App.5th 150, 166-174 [discussing “wide range” of indirect costs of recorder’s copying fees, including “‘accounting, budgeting, payroll preparation, personnel services, purchasing, and centralized data processing,’” quoting Ed. Code, § 33338, subd. (b)(2)].) 29

See 65 Ops.Cal.Atty.Gen. 321, 325 (1982) (as a county official, a recorder “has only such powers as have been conferred by law”). 30

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Moreover, the legislative history of section 27361(a) corroborates the statute’s plain meaning that the base recording fees belong to the county as a whole, not to the recorder separately. Previously, section 27361(a) set the base recording fees for the first page at a flat rate of $4 and each additional page at a flat rate of $3, and it did not name any purpose for these fees. 31 In 2009, through Senate Bill No. 676 (2009-2010 Reg. Sess.) (Senate Bill 32 676), the Legislature amended section 27361(a) in two ways. First, it increased the base recording fee that a county may charge for the first page to a maximum of $10 and modified 33 the charge for each additional page to a maximum of $3. Second, it gave a specific purpose to the base recording fees by inserting the language “to reimburse the county for the costs of services rendered pursuant to this subdivision[.]” 34 The legislative record reveals that the Legislature’s goal in enacting Senate Bill 676 was to more fully reimburse counties by charging the users of certain services more so that taxpayers who do not use these services would not have to foot the bills for them. Senate Bill 676 increased the amounts authorized to be charged for base recording fees and other county fees. 35 The committee reports for Senate Bill 676 describe the bill as a means for the county to recover the costs of specific services. 36 The author’s statement in support of the bill bemoaned that county taxpayers were being shorted because the fees charged were not supporting the costs of the services provided: 31

See Stats. 2008, ch. 179, § 102.

32

Stats. 2009, ch. 606, § 2.

33

Ibid.

34

Ibid.

Stats. 2009, ch. 606, §§ 1-12; see, e.g., id. at § 5 (Pen. Code, § 1203.1, subd. (l)
[increasing administrative fee from 10 percent to 15 percent of victim restitution]), § 6 (Pen. Code, § 1203.1b, subd. (h) [increasing probation administration fee from $50 maximum to $75 maximum]), § 7 (Pen. Code, § 1203.4, subd. (d) [increasing fee to set aside plea from $120 maximum to $150 maximum]). 35

See, e.g., Sen. Com. on Public Safety, Analysis of Sen. Bill No. 676 (2009-2010 Reg. Sess.) as amended Apr. 13, 2009, p. A (framing the “key issue” of the bill as follows: “Should the amount in fees that a county, city or court may charge for various services be increased or the maximum amount that can be charged eliminated so that actual costs of the services can be collected?”); Assem. Com. on Local Gov., Analysis of Sen. Bill No. 676 (2009-2010 Reg. Sess.) as amended Jun. 25, 2009, p. 4 (the bill “allows county governments to charge the people who use county services fees [in] an amount that reflects the actual costs of providing those services”). 36

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The fees by state law, including vital records fees, recording fees and civil fees charge[d] by the sheriff’s department, appear to be the most inflexible and costly for counties. Many county fees set by the state do not cover the cost of providing the service. . . . When a fee based service does not recover sufficient funds to cover the cost of providing the service, the difference comes out of the county’s general fund. The cost of these services is supposed to be borne by only those using the services, but ends up being subsidized by all taxpayers – including those who never use a particular service. This in turn puts pressure on other services that are funded by the county general fund, such as indigent health care, libraries, and law enforcement. 37 This history confirms that the increase in base recording fees was intended to reimburse the county for its costs in collecting them and suggests that this reimbursement was intended for the benefit of the county as a whole. Further, the State Controller’s fund accounting regulations support the conclusion that the county may use the general fund for the base recording fees, which, as mentioned, are collected to reimburse the county for its costs in providing the recording and indexing services. 38 The regulation describing fund categories provides that the general fund “is available for any authorized purpose” and “is, therefore, used to account for all revenues 39 and all expenditures not provided for in other funds.” The Controller’s regulations do not 40 specifically provide for the deposit of base recording fees into any other fund. This reinforces our view that the section 27361(a) fees collected for county reimbursement may 41 properly be deposited by the county into the general fund. Sen. Rules Com., Off. Of Sen. Floor Analyses, Unfinished Business Analysis of Sen. Bill 676 (2009-2010 Reg. Sess.) as amended Sept. 4, 2009, pp. 6-7. 37

As discussed above, a portion of the base recording fees must be used for modernization of the county recording system and another portion must be deposited in the general fund. This opinion addresses the remaining portion. 38

39

Cal. Code Regs., tit. 2, § 921, subd. (a).

See Cal. Code Regs., tit. 2, § 921, subds. (b)-(h) (enumerating and describing other types of funds). 40

As a practical matter, money is “fungible.” (United States v. Sperry Corp. (1989) 493 U.S. 52, 62, fn. 9; People v. Gbadebo-Soda (1995) 38 Cal.App.4th 160, 168.) As a result, once base recording fees and other revenues are deposited into the general fund, these monies are indistinguishable. (Cf. People v. Bolding (2019) 34 Cal.App.5th 1037, 1045 41

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One recorder suggests that if the county has “solely” funded recorder operations with these base recording fees, it wrongly “diverts” them by using them to fund other county departments. Not so. In adopting the annual budget, absent any statutory restriction, the board of supervisors is free to determine the appropriations for each department. A portion of the recorder’s base recording fees is legally restricted for modernizing the county’s recording system, and therefore the county must ensure that it is used for this purpose. 42 And a portion must be deposited in the general fund. 43 But nothing in section 27361(a) or any other statute restricts the use of the remaining amount of the base recording fees. 44 We conclude that, for the reasons stated, the recorder is not entitled to recover base recording fees collected for reimbursement of the county’s costs of services rendered under section 27361(a) and deposited in the county’s general fund. 2.

May a county recorder use an offset to recover “excess” base recording fees?

The second question asks whether the recorder may recoup base recording fees exceeding the costs of services rendered under section 27361(a) by retaining, in a separate account, other fees or taxes that the recorder collects for the county. In connection with this question, we are advised of a scenario where the recorder would use this “offset” in lieu of a claim against the county that would be barred by the statute of limitations. 45
[when funds from lawful and unlawful activities are combined into one asset, the funds “‘cannot be traced to any particular source, absent resort to accepted, but arbitrary, accounting techniques’”], quoting U.S. v. Moore (4th Cir. 1994) 27 F.3d 969, 976-977.) Gov. Code, § 27361, subds. (a)(2), (c); see Cal. Code Regs., tit. 2, § 921, subd. (b) (a “special revenue fund” is used by a county “[t]o account for the proceeds of specific revenue sources . . . that are legally restricted to expenditures for specified purposes”). 42

43

Gov. Code, § 27361, subd. (b).

The budgeted expenses of collecting base recording fees still must be borne by the county, however, and may be allocated from the general fund for this authorized purpose. (See Gov. Code, §§ 25214, subd. (a), 25252, 29089, subd. (g), 29301.) 44

See Robert F. Kennedy Medical Center v. Dept. of Health Services (1998) 61 Cal.App.4th 1357, 1361-1362 (Welfare and Institutions Code section 14177, which permits the Department of Health Services to recover Medi-Cal overpayments by offsetting them against the amounts it currently owes the provider, does not have a statute of limitations); 44 Ops.Cal.Atty.Gen. 58, 65 (1964) (no statute of limitations bars recovery under the State School Building Aid Law of 1952 via the state’s administrative “deductions from the 45

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This question incorrectly assumes that a recorder has authority over these fees. As a threshold matter, we note that there may be questions about whether such “excess” fees 46 constitute taxes that would require voter approval. Assuming these excess fees are lawful, however, they are governed by the same principles discussed above. Namely, the board of supervisors, not the recorder, has the power to establish funds and disperse revenues. Additionally, since the recorder may not incur any obligation or expend any money exceeding the board’s appropriations, the recorder could not spend or refund these “excess” base recording fees absent board approval. Just as there is no right without a remedy, there is no remedy without a right. 47 As we have concluded above, the recorder has no right to the county-reimbursing portions of the base recording fees, whether or not “excess.” Therefore, the recorder may not lawfully use offset as a remedy in this situation.

amounts payable to the [school] districts from the state school fund”). See Jacks v. City of Santa Barbara (2017) 3 Cal.5th 248, 268 (“To the extent fees exceed a reasonable amount in relation to the benefits or costs underlying their imposition, they are taxes”); Cal. Const., art. XIII C, §§ 1, 2 (local government taxes require voter approval). Questions about whether “excess” base recording fees would be found unlawful are beyond the scope of this opinion. 46

Compare Peck v. Jenness (1849) 48 U.S. 612, 623 (“A legal right without a remedy would be an anomaly in the law”) & McNiel v. Borland (1863) 23 Cal. 144, 148 (“It is a maxim that there can be no right without a remedy”) with Maclay v. Love (1864) 25 Cal. 367, 382 (“until such charge or incumbrance is legally created, there is no right to enforce, and of course no remedy can be afforded”) & Aetna Life Ins. Co. v. Bellos (Tenn. 1929) 13 S.W.2d 795, 797 (“The axiom, ‘No wrong without a remedy,’ is conversely true—no remedy without a wrong”). 47

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