Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 905

Introduced by Assembly Member Ting

February 22, 2013

An act begin insert to add Section 1471.5 to the Civil Code, end insert relating to begin delete energy end delete begin insert real property end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 905, as amended, Ting. begin delete Energy: energy efficiency programs: financing. end delete begin insert Real property: environmental fee covenants. end insert

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Existing law provides for the recording of an instrument containing an Environmental Restriction covenant made by an owner of land or by the grantee of land to do or refrain from doing an act that is reasonably necessary to protect present or future human health or safety or the environment as a result of the presence on the land of hazardous materials.

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This bill would also provide for the recording of an Environmental Fee Covenant, as specified, that is, among other things, imposed in connection with the installation on the property of equipment or improvements that are intended to promote, among other things, energy efficiency and the reduction of the consumption of water or other natural resources.

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Existing law establishes various energy efficiency programs to assist public and private entities to implement energy efficiency projects to reduce the consumption of energy.

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This bill would state the intent of the Legislature to enact legislation to provide an efficient financing mechanism for commercial property owners to make improvements to reduce the consumption of energy and natural resources.

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Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

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

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begin insert SECTION 1. end insert   

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begin insert Section 1471.5 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

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begin insert 1471.5. end insert   

(a) Notwithstanding Section 1468 or any other law,
a covenant made by an owner of land or by the grantee of land to
do or refrain from doing some act on his or her own land, which
doing or refraining is expressed to be for the benefit of the
covenantee, regardless of whether or not it is for the benefit of
land owned by the covenantee, shall run with the land owned by
or granted to the covenantor if all the following requirements are
met:

(1) The land of the covenantor that is to be affected by the
covenant is particularly described in the instrument containing
the covenant.

(2) The successive owners of the land are expressed to be bound
thereby for the benefit of the covenantee in the instrument
containing the covenant.

(3) The covenant is an Environmental Fee Covenant pursuant
to subdivision (e).

(4) The instrument containing the covenant is recorded in the
office of the recorder of each county in which the land or some
portion thereof is situated.

(b) Except as provided by Section 1466 or as specifically
provided in the instrument creating a covenant made pursuant to
this section, the covenant shall be binding upon each successive
owner, during his or her ownership, of any portion of the land
affected thereby and upon each person having any interest therein
derived through any owner thereof.

(c) If several persons are subject to the burden of a covenant
recorded pursuant to this section, it shall be apportioned among
them pursuant to Section 1467, except if only a portion of the land
is so affected thereby, the apportionment shall be only among the
several owners of that portion.

(d) This section shall apply to the mortgagee, trustee, or
beneficiary of a mortgage or deed of trust upon the land or any
part thereof while, but only while, he or she, in that capacity, is
in possession thereof.

(e) For purposes of this section, “Environmental Fee Covenant”
is a covenant that meets all of the following requirements:

(1) The covenant imposes a transfer fee meeting the
requirements set forth in Section 1098. The amount of the transfer
fee imposed through the covenant, combined with the amount of
the fee imposed through any prior Environmental Fee Covenant
imposed on the same property, shall not exceed 2 percent of the
full cash value, as defined in Section 110 of the Revenue and
Taxation Code, of the property upon transfer.

(2) The covenant encumbers property that, at the time the
covenant is entered, either does not contain residential units or
contains five or more residential units.

(3) The covenant is imposed in connection with the installation
on the property of equipment or improvements that are intended
to promote any of the following:

(A) Energy efficiency.

(B) The reduction of the generation of greenhouse gasses.

(C) The reduction of the consumption of water or other natural
resources.

(D) Compliance with Part 6 and Part 11 of Title 24 of the
California Code of Regulations.

(E) The generation of renewable energy using one or more
means identified in paragraph (1) of subdivision (a) of Section
25741 of the Public Resources Code.

(4) The covenant includes in its title the words: “Environmental
Fee Covenant.”

(5) The covenant recites that it meets the requirements of this
subdivision. It shall be rebuttably presumed that the covenant
meets the requirements of this subdivision. The presumption may
be overcome if it is established by a preponderance of the evidence
that the covenant fails to meet the requirements of this subdivision.

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SECTION 1.  

It is the intent of the Legislature to enact
legislation to provide an efficient financing mechanism for
commercial property owners to make improvements to reduce the
consumption of energy and natural resources.

end delete