BILL NUMBER: SB 1019	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Correa
   (Coauthor: Senator Price)
   (Coauthor: Assembly Member Knight)

                        FEBRUARY 11, 2010

   An act to amend Section 66499.7 of the Government Code, relating
to subdivided lands.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1019, as introduced, Correa. Subdivisions: release of
performance security.
   The Subdivision Map Act and local ordinances authorize or require,
under specified circumstances, the furnishing of specified types of
security with respect to the performance of various acts or
agreements subject to the act. Existing law, until January 1, 2011,
also sets forth the specific procedures imposed on a local agency for
the complete or partial release of a performance security furnished
by a subdivider.
   This bill would delete the repeal of the provisions relating to
the procedures for releasing a performance security, thereby
extending the operation of these provisions indefinitely and imposing
a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 66499.7 of the Government Code is amended to
read:
   66499.7.  The security furnished by the subdivider shall be
released in whole or in part in the following manner:
   (a) Security given for faithful performance of any act or
agreement shall be released upon the performance of the act or final
completion and acceptance of the required work. The legislative body
may provide for the partial release of the security upon the partial
performance of the act or the acceptance of the work as it
progresses, consistent with the provisions of this section. The
security may be a surety bond, a cash deposit, a letter of credit,
escrow account, or other form of performance guarantee required as
security by the legislative body that meets the requirements as
acceptable security pursuant to law. If the security furnished by the
subdivider is a documentary evidence of security such as a surety
bond or a letter of credit, the legislative body shall release the
documentary evidence and return the original to the issuer upon
performance of the act or final completion and acceptance of the
required work. In the event that the legislative body is unable to
return the original documentary evidence to the issuer, the security
shall be released by written notice sent by certified mail to the
subdivider and issuer of the documentary evidence within 30 days of
the acceptance of the work. The written notice shall contain a
statement that the work for which the security was furnished has been
performed or completed and accepted by the legislative body, a
description of the project subject to the documentary evidence and
the notarized signature of the authorized representative of the
legislative body.
   (b) At the time that the subdivider believes that the obligation
to perform the work for which security was required is complete, the
subdivider may notify the local agency in writing of the completed
work, including a list of work completed. Upon receipt of the written
notice, the local agency shall have 45 days to review and comment or
approve the completion of the required work. If the local agency
does not agree that all work has been completed in accordance with
the plans and specifications for the improvements, it shall supply a
list of all remaining work to be completed.
   (c) Within 45 days of receipt of the list of remaining work from
the local agency, the subdivider may then provide cost estimates for
all remaining work for review and approval by the local agency. Upon
receipt of the cost estimates, the local agency shall then have 45
days to review, comment, and approve, modify, or disapprove those
cost estimates. No local agency shall be required to engage in this
process of partial release more than once between the start of work
and completion and acceptance of all work; however, nothing in this
section prohibits a local agency from allowing for a partial release
as it otherwise deems appropriate.
   (d) If the local agency approves the cost estimate, the local
agency shall release all performance security except for security in
an amount up to 200 percent of the cost estimate of the remaining
work. The process allowing for a partial release of performance
security shall occur when the cost estimate of the remaining work
does not exceed 20 percent of the total original performance security
unless the local agency allows for a release at an earlier time.
Substitute bonds or other security may be used as a replacement for
the performance security, subject to the approval of the local
agency. If substitute bonds or other security is used as a
replacement for the performance security released, the release shall
not be effective unless and until the local agency receives and
approves that form of replacement security. A reduction in the
performance security, authorized under this section, is not, and
shall not be deemed to be, an acceptance by the local agency of the
completed improvements, and the risk of loss or damage to the
improvements and the obligation to maintain the improvements shall
remain the sole responsibility of the subdivider until all required
public improvements have been accepted by the local agency and all
other required improvements have been fully completed in accordance
with the plans and specifications for the improvements.
   (e) The subdivider shall complete the works of improvement until
all remaining items are accepted by the local agency.
   (f) Upon the completion of the improvements, the subdivider, or
his or her assigns, shall be notified in writing by the local agency
within 45 days.
   (g) Within 45 days of the issuance of the notification by the
local agency, the release of any remaining performance security shall
be placed upon the agenda of the legislative body of the local
agency for approval of the release of any remaining performance
security. If the local agency delegates authority for the release of
performance security to a public official or other employee, any
remaining performance security shall be released within 60 days of
the issuance of the written statement of completion.
   (h) Security securing the payment to the contractor, his or her
subcontractors and to persons furnishing labor, materials or
equipment shall, after passage of the time within which claims of
lien are required to be recorded pursuant to Article 3 (commencing
with Section 3114) of Chapter 2 of Title 15 of Part 4 of Division 3
of the Civil Code and after acceptance of the work, be reduced to an
amount equal to the total claimed by all claimants for whom claims of
lien have been recorded and notice thereof given in writing to the
legislative body, and if no claims have been recorded, the security
shall be released in full.
   (i) The release shall not apply to any required guarantee and
warranty period required by Section 66499.9 for the guarantee or
warranty nor to the amount of the security deemed necessary by the
local agency for the guarantee and warranty period nor to costs and
reasonable expenses and fees, including reasonable attorneys' fees.
   (j) The legislative body may authorize any of its public officers
or employees to authorize release or reduction of the security in
accordance with the conditions hereinabove set forth and in
accordance with any rules that it may prescribe. 
   (k)  This section shall remain in effect only until January 1,
2011, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2011, deletes or extends
that date. 
  SEC. 2.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.