BILL NUMBER: AB 450	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 22, 2016
	AMENDED IN SENATE  JUNE 9, 2016

INTRODUCED BY   Assembly Member McCarty

                        FEBRUARY 23, 2015

    An act to amend Sections 5898.12, 5898.21, 5898.24,
5898.28, and 5899.2 of, and to add Section 5899.4 to, the Streets and
Highways Code, relating to contractual assessments.  
An act to add Section 26157 to the Penal Code, relating to firearms.




	LEGISLATIVE COUNSEL'S DIGEST


   AB 450, as amended, McCarty.  Contractual assessments.
  Firearms: concealed carry license.  
   Existing law authorizes specified local law enforcement agencies
to issue to an applicant a license to carry a concealed firearm if
certain requirements are met, including, among others, that the
applicant has good cause for the license.  
   This bill would require local agencies issuing those licenses to
charge an applicant a fee sufficient to cover the reasonable costs of
issuing and enforcement of the license.  
   The Improvement Act of 1911 authorizes the legislative body of any
public agency, as defined, to determine that it would be convenient,
advantageous, and in the public interest to designate an area within
the public agency, as specified, within which authorized public
agency officials and property owners may enter into voluntary
contractual assessments to finance, among other improvements, the
installation of distributed generation renewable energy sources or
energy or water efficiency improvements that are permanently fixed to
real property, as specified. The act prohibits the use of voluntary
contractual assessments to finance facilities for parcels in
connection with the initial construction of residential buildings
unless the initial construction is undertaken by the intended owner
or occupant.  
   This bill would authorize the use of voluntary contractual
assessments to finance authorized improvements in connection with the
initial construction of residential buildings with 3 or fewer units
if the initial construction of the residential buildings are
undertaken by the intended owner or occupant. The bill would
authorize the use of voluntary contractual assessments to finance
authorized improvements in connection with the initial construction
of nonresidential buildings or residential buildings with 4 or more
units. The bill would authorize the use of voluntary contractual
assessments by one or more property owners to finance authorized
improvements on real property other than the property on which the
assessment is levied.  
   The act authorizes a public agency to issue bonds to finance
improvements that are repaid through voluntary contractual
assessments.  
   This bill would specify that the interest rate on a bond that is
payable from one or more contractual assessments levied on
nonresidential or residential property with 4 or more units is
considered to be fixed as long as the interest rate on each unpaid
contractual assessment that secures the bonds is fixed at the time of
the bond issuance.  
   The act authorizes a public agency to transfer its right, title,
and interest in and to any voluntary contractual assessments if bonds
are not issued. The act requires the public agency and transferee to
enter into an agreement that, among other things, identifies the
specific period of time during which the transfer of voluntary
contractual assessments will be operative.  
   This bill would additionally require the agreement, among other
things, to identify the amounts to be paid by the transferee as
consideration for the transfer. The bill would authorize public
agencies to issue bonds to repay a transferee of the right, title,
and interest in and to any voluntary contractual assessments that
were transferred.  
   The act specifies that, with respect to bonds issued to finance
improvements to nonresidential property or residential property with
4 or more units, the redemption premium associated with a redemption
of bonds as a result of a contractual assessment repayment is to be
determined by agreement of the public agency issuing the bonds, the
property owner, and the initial purchaser of the bonds. 

   This bill would specify that, with respect to bonds payable from
contractual assessments levied on residential property with 3 or
fewer units, the redemption premium associated with a redemption of
bonds as a result of a contractual assessment prepayment is to be
determined by agreement of the public agency issuing the bonds and
the initial purchaser of the bonds, but not to exceed 5%. The bill
would specify, with respect to bonds that are payable from
contractual assessments levied on nonresidential properties or
residential properties with 4 or more units, the manner in which the
redemption premium associated with a redemption of bonds as a result
of a contractual assessment prepayment is to be determined. 

   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 26157 is added to
the   Penal Code   , to read:  
   26157.  The sheriff, chief, or other head of a municipal police
department issuing a license pursuant to Section 26150 or 26155 shall
charge an applicant for the license a fee sufficient to cover the
reasonable costs of issuing and enforcement of the license. 

  SECTION 1.    Section 5898.12 of the Streets and
Highways Code is amended to read:
   5898.12.  (a) It is the intent of the Legislature that this
chapter should be used to finance public improvements to lots or
parcels that are developed and where the costs and time delays
involved in creating an assessment district pursuant to other
provisions of this division or any other law would be prohibitively
large relative to the cost of the public improvements to be financed.

   (b) It is also the intent of the Legislature that this chapter
should be used to finance the installation or prepaid service
contract, or both, of distributed generation renewable energy sources
or energy efficiency improvements that are permanently fixed to
residential, commercial, industrial, agricultural, or other real
property.
   (c) It is also the intent of the Legislature to address chronic
water needs throughout California by permitting voluntary individual
efforts to improve water efficiency. The Legislature further intends
that this chapter should be used to finance the installation of water
efficiency improvements that are permanently fixed to residential,
commercial, industrial, agricultural, or other real property,
including, but not limited to, recycled water connections, synthetic
turf, cisterns for stormwater recovery, and permeable pavement.
   (d) This chapter may be used to finance authorized improvements in
connection with the initial construction of a residential building
with three or fewer units, only if the initial construction of the
residential building is undertaken by the intended owner or occupant.

   (e) This chapter may be used to finance authorized improvements in
connection with the initial construction of a nonresidential
building or a residential building with four or more units.
   (f) This chapter shall not be used to finance the purchase or
installation of appliances that are not permanently fixed to
residential, commercial, industrial, agricultural, or other real
property.
   (g) Assessments may be levied pursuant to this chapter only with
the free and willing consent of the owner of each lot or parcel on
which an assessment is levied at the time the assessment is levied.
   (h) This chapter may be used by one or more property owners to
finance the improvements authorized by this chapter that are
permanently affixed on real property other than the property on which
the assessment is levied.
   (i) An improvement is permanently affixed to real property for
purposes of this chapter even though the improvement may be
temporarily removed for repairs or maintenance.  
  SEC. 2.    Section 5898.21 of the Streets and
Highways Code is amended to read:
   5898.21.  Notwithstanding any other provision of this chapter,
upon the written consent of an authorized public agency official, the
proposed arrangements for financing the program pertaining to the
installation of distributed generation renewable energy sources or
energy or water efficiency improvements that are permanently fixed to
real property may authorize the property owner, the owner of the
attached system, or a designee of that owner, to purchase directly
the related equipment and materials for the installation of
distributed generation renewable energy sources or energy or water
efficiency improvements and to contract directly, or pay, for the
installation of distributed generation renewable energy sources or
energy or water efficiency improvements that are permanently fixed to
the residential, commercial, industrial, agricultural, or other real
property.  
  SEC. 3.    Section 5898.24 of the Streets and
Highways Code is amended to read:
   5898.24.  (a) A legislative body shall publish notice of a hearing
pursuant to Section 6066 of the Government Code, and the first
publication shall occur not later than 20 days before the date of the
hearing.
   (b) (1) A legislative body administering a voluntary contractual
assessment program shall designate an office, department, or bureau
of the public agency that shall be responsible for annually preparing
the current roll of assessment obligations by assessor's parcel
number on property subject to a voluntary contractual assessment.
   (2) The designated office, department, or bureau shall establish
procedures to promptly respond to inquiries concerning current and
future estimated liability for a voluntary contractual assessment.
Neither the designated office, department, or bureau, nor the
legislative body, shall be liable if any estimate of future voluntary
contractual assessment liability is inaccurate, nor for any failure
of any seller to request notice pursuant to this chapter or to
provide the notice to a buyer.
   (c) For purposes of enabling sellers of real property subject to a
voluntary contractual assessment to satisfy the notice requirements
of Section 1102.6b of the Civil Code, and, except as provided in
subdivision (e), the legislative body shall cause to be recorded in
the office of the county recorder for the county in which the real
property is located, concurrently with the notice required by Section
5898.32, a separate document that meets all of the following
requirements:
   (1) The title of the document shall be "Payment of Contractual
Assessment Required" in at least 14-point boldface type.
   (2) The document shall include all of the following information:
   (A) The names of all current owners of the real property subject
to the contractual assessment and the legal description and assessor'
s parcel number for the affected property.
   (B) The annual amount of the contractual assessment.
   (C) The date or circumstances under which the contractual
assessment expires, or a statement that the assessment is perpetual.
   (D) The purpose for which the funds from the contractual
assessment will be used.
   (E) The entity to which funds from the contractual assessment will
be paid and specific contact information for that entity.
   (F) The signature of the authorized representative of the
legislative body to which funds from the contractual assessment will
be paid.
   (d) The recorder shall only be responsible for examining the
document required by subdivision (c) and determining that it contains
the information required by subparagraphs (A), (E), and (F) of
paragraph (2) of subdivision (c). The recorder shall index the
document under the names of the persons and entities identified in
subparagraphs (A) and (E) of paragraph (2) of subdivision (c). The
recorder shall not examine any other information contained in the
document required by subdivision (c).
   (e) In order to reduce the costs associated with contractual
assessments, a legislative body administering a voluntary contractual
assessment program may authorize the document described in
subdivision (c) to be combined with the notice required by Section
5898.32, and recorded as a single document. If the legislative body
authorizes the single document described in this subdivision and that
document is presented for recordation to a county recorder, the
county recorder shall accept that document for recordation and shall
not require the public agency to separately prepare and record the
document described in subdivision (c) and the document required by
Section 5898.32.  
  SEC. 4.    Section 5898.28 of the Streets and
Highways Code is amended to read:
   5898.28.  (a) (1) 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 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 unless the bond is payable from one or more
contractual assessments levied on nonresidential private property or
residential private property with four or more units. The interest
rate on that bond shall be considered fixed as long as the interest
rate on each unpaid contractual assessment that secures the bond is
fixed at the time the bond is issued. Bond proceeds may be used to
establish a reserve fund for debt service or paying the costs of
foreclosure on properties participating in the program, to fund
capitalized interest for a period up to two years from the date of
issuance of the bonds, to fund the administrative fee required for
participation in the PACE Reserve Program established pursuant to
Chapter 4 (commencing with Section 26050) of Division 16 of the
Public Resources Code, 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.
   (2) An assessment contract may define the term of the voluntary
contractual assessment and the rate at which interest will accrue on
the voluntary contractual assessment, describe the terms under which
the assessment may be prepaid, identify a schedule of installments
that include principal, interest, and administrative expense
components, and provide for the use of the proceeds that may be
generated as a result of the voluntary contractual assessment. During
the term of a voluntary contractual assessment, the public agency
may levy the installments described in the assessment contract. If
bonds are issued after an assessment contract is executed and
delivered by a public agency and a property owner, the installments
payable under the assessment contract shall thereafter be used only
to pay debt service on the bonds, a power purchase agreement or lease
pursuant to Section 5899.2, or the public agency's costs incidental
to financing, administration, and collection of the voluntary
contractual assessment.
   (b) (1) 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 any voluntary contractual assessments, if bonds are not payable
for the assessments. The public agency and the transferee shall enter
into an agreement that, among other things, identifies the amount to
be paid by the transferee as consideration for the transfer and use
of that amount paid by the transferee to the public agency, the
commencement date for the accrual of interest on the voluntary
contractual assessment, the capitalizing of interest, if applicable,
the timing for payment of the voluntary contractual assessment
installments of the transferee if received by the public agency, and
the specific period of time during which the transfer of voluntary
contractual assessments will be operative, not to exceed three years.
The agreement may provide that if at the end of the term of the
transfer of the voluntary contractual assessments the public agency
is unable to repay the transferee, the public agency may transfer the
voluntary contractual assessments for the length of their term, so
long as, notwithstanding any other limitations set forth in this
chapter, no installment of the voluntary contractual assessments will
increase as a result of the transfer without the prior written
consent of the affected property owner. The public agency may enter
into an agreement with a trustee, fiscal agent, or payment agent to
hold, invest, and distribute the amounts paid by the transferee to
the public agency as consideration for the transfer and the voluntary
contractual assessments if received by the public agency. Except as
provided in paragraph (2), a transfer of any voluntary contractual
assessments under this subdivision shall be treated as a true and
absolute transfer of the asset so transferred for the period of the
transfer 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.
   (2) Nothing in this subdivision shall be construed to authorize
the transferee to initiate and prosecute a foreclosure action
resulting from a delinquency in the payment of the voluntary
contractual assessment. Initiation and prosecution of a foreclosure
action shall remain the responsibility of the public agency, which
shall retain the sole right to enforce its senior lien status for the
benefit of the public agency and any transferee. As a cumulative
remedy, if any assessment or installment thereof, or any interest
thereon, together with any penalties, costs, fees, and other charges
accruing under applicable taxation provisions are not paid when due,
the public agency may order that the same be collected by an action
brought in the superior court to foreclose the lien as provided in
this division, and this division shall be construed in a manner that
accomplishes the purposes of this paragraph. In connection with the
transfer of its right, title, and interest in and to any voluntary
contractual assessment, the public agency may covenant for the
benefit of the transferee to commence and diligently prosecute any
foreclosure action regarding delinquent installments of any
assessments.
   (3) A public agency may issue bonds under this chapter to repay a
transferee of the right, title, and interest in and to any voluntary
contractual assessment under this subdivision. The public agency may
transfer or cause to be transferred, to the trustee, fiscal agent, or
payment agent for the bonds, as applicable, funds held with respect
to a transfer at the time the bonds are issued.
   (c) 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. Notwithstanding Part 16
(commencing with Section 8880) of Division 10, if any reserve fund is
established in whole or in part with legally available moneys of one
or more public agencies other than bond proceeds, the public agency
or agencies may provide that a property owner who prepays all or a
portion of the assessment shall not be credited with the public
agency moneys in the reserve fund and there shall be no reduction in
the assessment pursuant to Sections 8884 or 8881, and the public
agency moneys in the reserve account shall not be used to redeem
bonds pursuant to Section 8885 and any public agency moneys remaining
in the reserve fund at the maturity of the bonds shall be disbursed
to the public agency free and clear of the lien of the issuing
instrument. Any excess bond proceeds may be used to pay principal of
and interest on the bonds in addition to any other use permitted by
Division 10 (commencing with Section 8500).
   (d) Notwithstanding any other law, the public agency may conclude
that it is in the public interest for bonds issued by the public
agency pursuant to this chapter to not be subject to redemption prior
to their scheduled maturity date except as a result of the
prepayment in whole or in part of contractual assessments.
Notwithstanding any other limitations set forth in law, (1) with
respect to bonds that are payable from one or more contractual
assessments levied on residential property with three or fewer units,
the redemption premium associated with a redemption of bonds as a
result of a contractual assessment prepayment shall be determined by
agreement of the public agency issuing the bonds and the initial
purchaser of the bonds, but shall not exceed 5 percent, and (2) with
respect to bonds that are payable from one or more contractual
assessments levied on nonresidential property or residential property
with four or more units, (A) the public agency and the property
owner may agree that the contractual assessment shall not be subject
to prepayment for all or a portion of the time it is unpaid or (B) if
the contractual assessment will be subject to prepayment, the
redemption premium associated with a redemption of bonds as a result
of a contractual assessment prepayment shall be determined by
agreement of the public agency issuing the bonds, the property owner,
and the initial purchaser of the bonds. Notwithstanding any other
law, the public agency issuing bonds pursuant to this chapter may
provide for the bonds to be subject to redemption on any date. The
public agency may provide for the redemption of bonds issued pursuant
to this chapter from unspent bond proceeds following the completion
of the installation of the improvements at a redemption price equal
to the principal amount of the bonds to be redeemed, plus accrued
interest to the redemption date, plus a redemption premium specified
in the assessment contract, if any, which premium may exceed 5
percent of the principal amount of the bonds to be redeemed only in
the case of bonds that are payable from one or more contractual
assessments levied on residential property with three or fewer units.

   (e) (1) Without the prior written approval of the property owner,
and notwithstanding any other law, a public agency may issue bonds
pursuant to this chapter to refinance outstanding bonds payable from
contractual assessments levied pursuant to this chapter if all of the
following are true:
   (A) The total interest cost to maturity on the refunding bonds is
less than the total interest cost to maturity on the bonds to be
refunded.
   (B) The final maturity date of the refunding bonds is not later
than the final maturity date of the refunded bonds, except that if
the bonds to be refunded are variable rate bonds, the final maturity
date of the refunding bonds may extend to, but not beyond, the useful
life of the financed improvements.
   (C) The total interest component of the scheduled contractual
assessment installments to maturity, after issuance of the refunding
bonds, is less than the total interest component of the scheduled
contractual assessment installments to maturity prior to issuance of
the refunding bonds.
   (2) For purposes of this section, in connection with the issuance
of fixed rate bonds to refinance variable rate bonds, the interest
rate on the refunded bonds for purpose of demonstrating compliance
with this section may be assumed to be the maximum possible interest
rate on the bonds to be refunded as long as the legislative body
concludes that the public interest will be served by issuing fixed
rate bonds to refinance the outstanding variable rate bonds. In
connection with an issuance of refunding bonds under this chapter,
the legislative body may direct that an amendment to the document
required by subdivision (c) of Section 5898.24 be recorded to reflect
the revised contractual assessment installment schedule.
   (f) With the prior written approval of the owner of nonresidential
property or residential property with four or more units, and
notwithstanding any other law, a public agency may issue bonds
pursuant to this chapter to refinance outstanding bonds payable from
contractual assessments levied pursuant to this chapter without
complying with subdivision (e). The final maturity date of the
refunding bonds issued pursuant to this subdivision may be later than
the final maturity date of the bonds being refunded as long as the
final maturity date of the refunding bonds does not extend beyond the
useful life of the financed improvements.
   (g) The assessment contract between the public agency and a
property owner shall provide for the use of proceeds of any bonds or
other financing arrangement authorized by this chapter, and may
provide that the proceeds may be used to make progress payments to a
contractor as work is completed on portions of the improvements in a
manner that the public agency determines to be reasonable. 

  SEC. 5.    Section 5899.2 of the Streets and
Highways Code is amended to read:
   5899.2.  For the purpose of financing the installation of
distributed generation renewable energy sources pursuant to this
chapter, "permanently fixed" includes, but is not limited to, systems
attached to a residential, commercial, industrial, agricultural, or
other real property pursuant to a power purchase agreement or lease
between the owner of the system and the owner of the assessed
property, if the power purchase agreement or lease contains all of
the following provisions:
   (a) The attached system is an eligible renewable energy resource
pursuant to the California Renewables Portfolio Standard Program
(Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1
of Division 1 of the Public Utilities Code).
   (b) The term of the power purchase agreement or lease is at least
as long as the term of the related assessment contract.
   (c) The owner of the attached system agrees to install, maintain,
and monitor the system for the entire term of the power purchase
agreement or lease.
   (d) The owner of the attached system is not permitted to remove
the system prior to completion of the term of the contractual
assessment lien.
   (e) After installation, the power purchase agreement or lease,
including the costs of operating and maintaining the systems and
services incidental to the systems, is paid, either partially or in
full, using the funds from the contractual assessment program. For
purposes of this subdivision, "funds from the contractual assessment
program" includes bond proceeds, contractual assessment installments,
grants, or other funding sources available to the contractual
assessment program, and savings and other monetary benefits that are
available as a result of the contractual assessment financing.
   (f) The right to receive the electricity from the system, through
a power purchase agreement or lease or the right to the system
itself, is tied to the ownership of the assessed real property and is
required to be automatically transferred with the title to the real
property whether the title is transferred by voluntary sale, judicial
or nonjudicial foreclosure, or by any other means.
   (g) The power purchase agreement or lease identifies the public
agency that is a party to the assessment contract on the real
property as a third-party beneficiary of the power purchase agreement
or lease until the assessment lien on the property has been fully
paid and, only until that time,
         prohibits amendments to the power purchase agreement or
lease without the consent of the public agency.
   (h) In order to ensure that the property owner is guaranteed the
electric power from the system for the length of the lien, the system
shall not be removed if the owner of the attached system is not
performing its obligations under the contract, and one of the
following is true:
   (1) The owner of the attached system does both of the following:
   (A) Covenants in its contract with the property owner that neither
the owner of the attached system nor any successor in interest will
remove or permanently decommission the attached system during the
term of the contract.
   (B) Warrants in the contract with the property owner that no
assignee, creditor, partner, or owner of the attached system's owner
has, as of the date of the contract or during the remaining term of
the contract, the right to remove or permanently decommission the
attached system.
   (2) The owner of the attached system must be a bankruptcy remote
special purpose entity that is bankruptcy remote and meets all of the
following conditions:
   (A) It does not engage in any business other than owning the
attached systems and entering into electricity contracts with the
property owner.
   (B) It has no material debt.
   (C) Its contracts are either entered into with unrelated third
parties or have terms negotiated at arms length.  
  SEC. 6.   Section 5899.4 is added to the Streets
and Highways Code, to read:
   5899.4.  The Legislature finds and declares that a public purpose
will be served by giving public agencies substantial flexibility to
establish arrangements that will address concerns of participating
bond owners, property owners, mortgage lenders, or state and federal
regulatory agencies about the financing available under this chapter.
These arrangements may include, but are not limited to, the issuance
by a public agency of bonds pursuant to this chapter to redeem
outstanding bonds issued by the public agency pursuant to this
chapter to accommodate an arrangement authorized by this chapter so
long as, notwithstanding any other limitations set forth in this
chapter, no installment of a voluntary contractual assessment will
increase without the prior written consent of the affected property
owner, and unspent proceeds of the outstanding bonds to be redeemed
may be applied by the public agency in the manner that it determines
will further an arrangement authorized by this chapter.