Amended in Assembly September 12, 2013

Amended in Assembly March 18, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 569


Introduced by Assembly Member Chau

February 20, 2013


begin deleteAn act to amend Sections 53890, 53891, and 53892 of, and to repeal Sections 12463.3 and 53895.5 of, the Government Code, and to repeal Sections 33080, 33080.1, 33080.2, 33080.3, 33080.4, 33080.5, 33080.6, and 33080.7 of the Health and Safety Code, relating to redevelopment. end deletebegin insertAn act to amend Sections 11003.4 and 11013.1 of, and to add Section 11013.6 to, the Business and Professions Code, and to amend Section 5100 of the Civil Code, relating to land use.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 569, as amended, Chau. begin deleteRedevelopment: reports. end deletebegin insertReal property: divided lands. end insert

begin insert

(1) Existing law exempts a limited-equity housing cooperative or a workforce housing cooperative trust from provisions of existing law governing subdivided land transactions that are applicable to stock cooperatives if the limited-equity housing cooperative or workforce housing cooperative trust complies with specified conditions.

end insert
begin insert

This bill would revise the conditions for the exemption to, among other things, require that each party that executes a regulatory agreement with the cooperative satisfy itself that the rights of the cooperative members are provided adequate protection, as specified. By expanding the applicability of a crime, this bill would impose a state-mandated local program.

end insert
begin insert

(2) Existing law prohibits the sale or lease of lots or parcels within a subdivision that is subject to a blanket encumbrance unless the encumbrance includes a specified release clause or certain conditions are met.

end insert
begin insert

This bill would authorize the sale or lease of an individual interest in a defined stock cooperative or limited housing cooperative that is subject to a blanket encumbrance if specified conditions are met.

end insert
begin insert

(3) The Davis-Stirling Common Interest Development Act establishes procedures for elections.

end insert
begin insert

This bill would exempt a stock cooperative with bylaws that provide that all members and shareholders automatically become directors of the homeowners’ association from the procedures applicable to the election of directors of the homeowners’ association.

end insert
begin insert

(4) 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.

end insert
begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert
begin delete

Existing law requires the Controller to compile and publish annually reports of the financial transactions of each community redevelopment agency, as provided.

end delete
begin delete

This bill would eliminate that requirement.

end delete
begin delete

Existing law requires the officer of each local agency, who has charge of the financial records of the agency, to furnish to the Controller a report of all the financial transactions of the local agency during the next preceding fiscal year within 90 days of the close of each fiscal year, as specified. Existing law defines local agency, for purposes of these financial reports, to mean any city, county, district, and specified community redevelopment agencies.

end delete
begin delete

This bill would exclude community redevelopment agencies from the definition of local agency, thereby eliminating the requirement that a community redevelopment agency furnish the Controller with the financial report. This bill would make related, conforming changes.

end delete
begin delete

Existing law requires each redevelopment agency to submit the final report of any audit undertaken by any other local, state, or federal government entity to its legislative body and to additionally present an annual report to the legislative body containing specified information. Existing law requires the Department of Housing and Community Development to compile and publish reports of the activities of redevelopment agencies, as provided.

end delete
begin delete

This bill would repeal those provisions, and would repeal related provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

The people of the State of California do enact as follows:

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 11003.4 of the end insertbegin insertBusiness and Professions
2Code
end insert
begin insert is amended to read:end insert

3

11003.4.  

(a) A “limited-equity housing cooperative” or a
4“workforce housing cooperative trust” is a corporation that meets
5the criteria of Section 11003.2 and that also meets the criteria of
6Sections 817 and 817.1 of the Civil Code, as applicable. Except
7as provided in subdivision (b), a limited-equity housing or
8workforce housing cooperative trust shall be subject to all the
9requirements of this chapter pertaining to stock cooperatives.

10(b) A limited-equity housing cooperative or a workforce housing
11cooperative trust shall be exempt from the requirements of this
12chapter if the limited-equity housing cooperative or workforce
13housing cooperative trust complies with all the following
14conditions:

15(1) The United States Department of Housing and Urban
16Development, the United States Department of Agriculture, the
17National Consumers Cooperative Bank, the California Housing
18Finance Agency, the Public Employees’ Retirement System
19(PERS), the State Teachers’ Retirement System (STRS), the
20Department of Housing and Community Development,begin delete orend delete the
21Federal Home Loan Bank System or any of its member institutions,
22begin delete aloneend deletebegin insert a stateend insert orbegin delete in any combination with each other,end deletebegin insert federally
23chartered credit union, a stateend insert
orbegin delete withend deletebegin insert federally certified community
24development financial institution, orend insert
the city, county, school
25district, or redevelopment agency in which the cooperative is
26located,begin insert alone or in any combination with each other,end insert directly
27finances or subsidizes at least 50 percent of the total construction
28or development cost or one hundred thousand dollars ($100,000),
29whichever is less; or the real property to be occupied by the
30cooperative was sold or leased by thebegin delete Department of
31Transportation,end delete
begin insert Transportation Agency,end insert other state agency, a city,
P4    1a county, or a school district for the development of the cooperative
2and has a regulatory agreement approved by the Department of
3Housing and Community Development for the term of the
4permanent financing, notwithstanding the source of the permanent
5subsidy or financing.

6(2) No more than 20 percent of the total development cost of a
7limited-equity mobilehome park, and no more than 10 percent of
8the total development cost of other limited-equity housing
9cooperatives, is provided by purchasers of membership shares.

10(3) A regulatory agreement that covers the cooperative for a
11term of at least as long as the duration of the permanent financing
12 or subsidy, notwithstanding the source of the permanent subsidy
13orbegin delete financingend deletebegin insert financing,end insert has been duly executed between the
14recipient of the financing and either (A) one of the federal or state
15agencies specified in paragraph (1) or (B) a local public agency
16that is providing financing for the project under a regulatory
17agreement meeting standards of the Department of Housing and
18Community Development. The regulatory agreement shall make
19provision for at least all of the following:

20(A) Assurances for completion of the common areas and
21facilities to be owned or leased by the limited-equity housing
22cooperative, unless a construction agreement between the same
23parties contains written assurances for completion.

24(B) Governing instruments for the organization and operation
25of the housing cooperative by the members.

26(C) The ongoing fiscal management of the project by the
27cooperative, including an adequate budget, reserves, and provisions
28for maintenance and management.

29(D) Distribution of a membership information report to any
30prospective purchaser of a membership share, prior to purchase
31of that share. The membership information report shall contain
32full disclosure of the financial obligations and responsibilities of
33cooperative membership, the resale of shares, the financing of the
34cooperative including any arrangements made with any partners,
35membership share accounts, occupancy restrictions, management
36arrangements, and any other information pertinent to the benefits,
37risks, and obligations of cooperative ownership.

38(4) begin delete The federal, state, or local public agencyend deletebegin insert Each partyend insert that
39executes the regulatory agreement shall satisfy itself that the
40bylaws, articles of incorporation, occupancy agreement,
P5    1subscription agreement, any lease of the regulated premises, any
2arrangement with partners, and arrangement for membership share
3accounts provide adequate protection of the rights of cooperative
4members.

5(5) begin delete The federalend deletebegin insert Each provider of financingend insert orbegin delete state agencyend delete
6begin insert subsidiesend insert shall receive from the attorney for the recipient of the
7financing or subsidy a legal opinion that the cooperative meets the
8requirements of Section 817 of the Civil Code and the exemption
9provided by this section.

10(c) Any limited-equity cooperative, or workforce housing
11cooperative trust that meets the requirements for exemption
12pursuant to subdivision (b) may elect to be subject to all provisions
13of this chapter.

14(d) The developer of the cooperative shall notify thebegin delete Departmentend delete
15begin insert Bureauend insert of Real Estate, on a form provided by thebegin delete department,end delete
16begin insert bureau,end insert that an exemption is claimed under this section. The
17begin delete Departmentend deletebegin insert Bureauend insert of Real Estate shall retain this form for at least
18four years for statistical purposes.

19begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 11013.1 of the end insertbegin insertBusiness and Professions Codeend insert
20begin insert is amended to read:end insert

21

11013.1.  

It shall be unlawful, except as provided in Section
22begin delete 11013.2,end deletebegin insert 11013.2 or 11013.6,end insert for the owner, subdivider, or agent
23to sell or lease lots or parcels within a subdivision that is subject
24to a blanket encumbrance unless there exists inbegin delete suchend deletebegin insert theend insert blanket
25encumbrance or other supplementary agreement a provision,
26hereinafter referred to as a release clause, which by its terms shall
27unconditionally provide that the purchaser or lessee of a lot or
28parcel can obtain legal title or other interest contracted for, free
29and clear ofbegin delete suchend deletebegin insert theend insert blanket encumbrance, upon compliance with
30the terms and conditions of the purchase or lease.

31begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 11013.6 is added to the end insertbegin insertBusiness and
32Professions Code
end insert
begin insert, to read:end insert

begin insert
33

begin insert11013.6.end insert  

Notwithstanding Sections 11013.1 and 11013.2, an
34individual interest in a stock cooperative, as defined in Section
354190 of the Civil Code, or a limited equity housing cooperative,
36as defined in Section 817 of the Civil Code, may be sold or leased
37subject to a blanket encumbrance if all of the following conditions
38are met:

P6    1(a) The notice required pursuant to Section 1133 of the Civil
2Code is provided to each prospective purchaser and lessee of the
3interest and is included in every purchase and lease contract.

4(b) The property subject to the sale or lease has obtained a
5public report from the Bureau of Real Estate that accounts for the
6blanket encumbrance.

7(c) The governing documents for the association require the
8association to create within one year of the sale of at least 50
9percent of the individual interests in the stock cooperative or
10limited-equity housing cooperative and maintain during the term
11of the blanket encumbrance a financing reserve amount equal to
12at least three months of the amount of the debt service payments
13due on the blanket encumbrance or a lesser amount acceptable to
14the commissioner.

end insert
15begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 5100 of the end insertbegin insertCivil Codeend insertbegin insert is amended to read:end insert

16

5100.  

(a) Notwithstanding any other law or provision of the
17governing documents, elections regarding assessments legally
18requiring a vote, election and removal of directors, amendments
19to the governing documents, or the grant of exclusive use of
20common area pursuant to Section 4600 shall be held by secret
21ballot in accordance with the procedures set forth in this article.

22(b) This article also governs an election on any topic that is
23expressly identified in the operating rules as being governed by
24this article.

25(c) The provisions of this article apply to both incorporated and
26unincorporated associations, notwithstanding any contrary
27provision of the governing documents.

28(d) The procedures set forth in this article shall apply to votes
29cast directly by the membership, but do not apply to votes cast by
30delegates or other elected representatives.

31(e) In the event of a conflict between this article and the
32provisions of the Nonprofit Mutual Benefit Corporation Law (Part
333 (commencing with Section 7110) of Division 2 of Title 1 of the
34Corporations Code) relating to elections, the provisions of this
35article shall prevail.

begin insert

36(f) Directors shall not be required to be elected pursuant to this
37article if the governing documents provide that one member from
38each separate interest is a director.

end insert
39begin insert

begin insertSEC. 5.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
40Section 6 of Article XIII B of the California Constitution because
P7    1the only costs that may be incurred by a local agency or school
2district will be incurred because this act creates a new crime or
3infraction, eliminates a crime or infraction, or changes the penalty
4for a crime or infraction, within the meaning of Section 17556 of
5the Government Code, or changes the definition of a crime within
6the meaning of Section 6 of Article XIII B of the California
7Constitution.

end insert
begin delete
8

SECTION 1.  

Section 12463.3 of the Government Code is
9repealed.

10

SEC. 2.  

Section 53890 of the Government Code is amended
11to read:

12

53890.  

As used in this article, “local agency” means any city,
13county, and any district required to furnish financial reports
14pursuant to Section 12463.1.

15

SEC. 3.  

Section 53891 of the Government Code is amended
16to read:

17

53891.  

The officer of each local agency who has charge of the
18financial records shall furnish to the Controller a report of all the
19financial transactions of the local agency during the next preceding
20fiscal year. The report shall be furnished within 90 days after the
21close of each fiscal year and shall be in the form required by the
22Controller. If the report is filed in electronic format as prescribed
23by the Controller, the report shall be furnished within 110 days
24after the close of each fiscal year. However, whenever a local
25agency files annual financial materials with the Office of Statewide
26Health Planning and Development or any successor thereto
27pursuant to Section 128735 of the Health and Safety Code, the
28audited report shall be furnished within 120 days after the close
29of each fiscal year.

30The Controller shall prescribe uniform accounting and reporting
31procedures that shall be applicable to all local agencies except
32cities, counties, and school districts, and except for local agencies
33that substantially follow a system of accounting prescribed by the
34Public Utilities Commission of the State of California or the
35Federal Energy Regulatory Commission. The procedures shall be
36adopted under the provisions of Chapter 3.5 (commencing with
37Section 11340) of Part 1 of Division 3 of Title 2. The Controller
38shall prescribe the procedures only after consultation with and
39approval of a local governmental advisory committee established
40pursuant to Section 12463.1. Approval of the procedures shall be
P8    1by majority vote of the members present at a meeting of the
2committee called by the chairperson thereof.

3

SEC. 4.  

Section 53892 of the Government Code is amended
4to read:

5

53892.  

The report shall state all of the following:

6(a) The aggregate amount of taxes levied and assessed against
7the taxable property in the local agency, which became due and
8payable during the next preceding fiscal year.

9(b) The aggregate amount of taxes levied and assessed against
10this property collected by or for the local agency during the fiscal
11year.

12(c) The aggregate income during the preceding fiscal year, a
13general statement of the sources of the income, and the amount
14received from each source.

15(d) The total expenditures made by administrative departments
16during the preceding fiscal year, a general statement of the purposes
17of the expenditures, and the amounts expended by each department.

18(e) The assessed valuation of all of the taxable property in the
19local agency as set forth on the assessment roll of the local agency
20equalized for the fiscal year, or, if the officers of the county in
21which the city or district is situated have collected for the city or
22district the general taxes levied by the city or district for the fiscal
23year, the assessed valuation of all taxable property in the city or
24district as set forth on the assessment rolls for the county equalized
25for the fiscal year.

26(f) The information required by Section 53892.2, as of the end
27of the fiscal year.

28(g) The approximate population at the close of the fiscal year
29and the population as shown by the last regular federal census.

30(h) Other information that the Controller requires.

31(i) Any other matters necessary to complete and keep current
32the statistical information on assessments, revenues and taxation,
33collected and compiled by any Senate or Assembly committee on
34revenue and taxation.

35(j) In the case of cities, the information required by Section
3653892.3.

37

SEC. 5.  

Section 53895.5 of the Government Code is repealed.

38

SEC. 6.  

Section 33080 of the Health and Safety Code is
39repealed.

P9    1

SEC. 7.  

Section 33080.1 of the Health and Safety Code is
2repealed.

3

SEC. 8.  

Section 33080.2 of the Health and Safety Code is
4repealed.

5

SEC. 9.  

Section 33080.3 of the Health and Safety Code is
6repealed.

7

SEC. 10.  

Section 33080.4 of the Health and Safety Code is
8repealed.

9

SEC. 11.  

Section 33080.5 of the Health and Safety Code is
10repealed.

11

SEC. 12.  

Section 33080.6 of the Health and Safety Code is
12repealed.

13

SEC. 13.  

Section 33080.7 of the Health and Safety Code is
14repealed.

end delete


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