BILL NUMBER: AB 1883	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Skinner

                        FEBRUARY 19, 2014

   An act to amend Section 5898.28 of the Streets and Highways Code,
relating to public improvements.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1883, as introduced, Skinner. Public improvements: contractual
assessments: delinquency.
   Existing law, under the Improvement Act of 1911, authorizes the
legislative body of a public agency to designate an area within which
the public agency and property owners may enter into voluntary
contractual assessments to finance certain public improvements.
Existing law authorizes the public agency to advance its own funds to
finance work to be repaid through the voluntary assessments, and to
issue bonds in that regard. Existing law provides that assessments
levied in this manner constitute a lien against the property on which
the assessments are made, and, in the case of delinquency, provides
for collection of assessments and associated interest and penalties,
as specified.
   This bill would authorize a public agency to transfer, as defined,
its right, title, and interest in any voluntary contractual
assessments and in all rights to initiate and prosecute a foreclosure
action resulting from a delinquency in those assessments, as
specified, if bonds have not been issued in that regard.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 5898.28 of the Streets and Highways Code is
amended to read:
   5898.28.   (a)    A public agency may issue
bonds pursuant to this chapter, the principal and interest for which
would be repaid by voluntary contractual assessments. A public agency
may advance its own funds to finance work to be repaid through
voluntary contractual assessments, and may from time to time sell
bonds to reimburse itself for  such   those
 advances. A public agency may enter into a relationship with an
underwriter or financial institution that would allow the sequential
issuance of a series of bonds, each bond being issued as the need
arose to finance work to be repaid through voluntary contractual
assessments. The interest rate of each bond may be determined by an
appropriate index, but shall be fixed at the time each bond is
issued. Bond proceeds may be used to establish a reserve fund, and to
pay for expenses incidental to the issuance and sale of the bonds.
Division 10 (commencing with Section 8500) shall apply to any bonds
issued pursuant to this section, insofar as that division is not in
conflict with this chapter. 
   (b) Notwithstanding any provision of this division or the
Improvement Act of 1915 (Division 10 (commencing with Section 8500)),
a public agency may transfer its right, title, and interest in and
to (1) any voluntary contractual assessments and (2) all rights to
initiate and prosecute a foreclosure action resulting from a
delinquency in the payment of the voluntary contractual assessments,
if bonds have not been issued pursuant to subdivision (a). A transfer
of any voluntary contractual assessments under this subdivision
shall be treated as a true and absolute transfer of the asset so
transferred and not as a pledge or grant of a security interest by
the public agency for any borrowing. The characterization of the
transfer of any of those assets as an absolute transfer by the public
agency shall not be negated or adversely affected by the fact that
only a portion of any voluntary contractual assessment is
transferred, nor by any characterization of the transferee for
purposes of accounting, taxation, or securities regulation, nor by
any other factor whatsoever. As used in this section, "transfer"
means sale, assignment, or other transfer.