AB 1105, as introduced, Daly. Subdivided lands: 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, 2016, 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 66499.7 of the Government Code is
2amended to read:
The security furnished by the subdivider shall be
4released in whole or in part in the following manner:
5(a) Security given for faithful performance of any act or
6agreement shall be released upon the performance of the act or
7final completion and acceptance of the required work. The
8legislative body may provide for the partial release of the security
9upon the partial performance of the act or the acceptance of the
10work as it progresses, consistent with the provisions of this section.
11The security may be a surety bond, a cash deposit, a letter of credit,
12escrow account, or other form of performance guarantee required
13as security by the legislative body that meets the requirements as
14acceptable security pursuant to law. If the security furnished by
15the subdivider is a documentary evidence
of security such as a
16surety bond or a letter of credit, the legislative body shall release
17the documentary evidence and return the original to the issuer upon
18performance of the act or final completion and acceptance of the
19required work. In the event that the legislative body is unable to
20return the original documentary evidence to the issuer, the security
21shall be released by written notice sent by certified mail to the
22subdivider and issuer of the documentary evidence within 30 days
23of the acceptance of the work. The written notice shall contain a
24statement that the work for which the security was furnished has
25been performed or completed and accepted by the legislative body,
26a description of the project subject to the documentary evidence
27and the notarized signature of the authorized representative of the
28legislative body.
29(b) At the time that the subdivider believes that the obligation
30to perform the work for which security was required
is complete,
31the subdivider may notify the local agency in writing of the
32completed work, including a list of work completed. Upon receipt
33of the written notice, the local agency shall have 45 days to review
34and comment or approve the completion of the required work. If
35the local agency does not agree that all work has been completed
36in accordance with the plans and specifications for the
37improvements, it shall supply a list of all remaining work to be
38completed.
P3 1(c) Within 45 days of receipt of the list of remaining work from
2the local agency, the subdivider may then provide cost estimates
3for all remaining work for review and approval by the local agency.
4Upon receipt of the cost estimates, the local agency shall then have
545 days to review, comment, and approve, modify, or disapprove
6those cost estimates. No local agency shall be required to engage
7in this process of partial release more than once between the start
8of work and completion and
acceptance of all work; however,
9nothing in this section prohibits a local agency from allowing for
10a partial release as it otherwise deems appropriate.
11(d) If the local agency approves the cost estimate, the local
12agency shall release all performance security except for security
13in an amount up to 200 percent of the cost estimate of the
14remaining work. The process allowing for a partial release of
15performance security shall occur when the cost estimate of the
16remaining work does not exceed 20 percent of the total original
17performance security unless the local agency allows for a release
18at an earlier time. Substitute bonds or other security may be used
19as a replacement for the performance security, subject to the
20approval of the local agency. If substitute bonds or other security
21is used as a replacement for the performance security released, the
22release shall not be effective unless and until the local agency
23receives and approves that form
of replacement security. A
24reduction in the performance security, authorized under this section,
25is not, and shall not be deemed to be, an acceptance by the local
26agency of the completed improvements, and the risk of loss or
27damage to the improvements and the obligation to maintain the
28improvements shall remain the sole responsibility of the subdivider
29until all required public improvements have been accepted by the
30local agency and all other required improvements have been fully
31completed in accordance with the plans and specifications for the
32improvements.
33(e) The subdivider shall complete the works of improvement
34until all remaining items are accepted by the local agency.
35(f) Upon the completion of the improvements, the subdivider,
36or his or her assigns, shall be notified in writing by the local agency
37within 45 days.
38(g) Within 45 days of the issuance of the notification by the
39local agency, the release of any remaining performance security
40shall be placed upon the agenda of the legislative body of the local
P4 1agency for approval of the release of any remaining performance
2security. If the local agency delegates authority for the release of
3performance security to a public official or other employee, any
4remaining performance security shall be released within 60 days
5of the issuance of the written statement of completion.
6(h) Security securing the payment to the contractor, his or her
7subcontractors and to persons furnishing labor, materials or
8equipment shall, after passage of the time within which claims of
9lien are required to be recorded pursuant to Article 2 (commencing
10with Section 8410) of Chapter 4 of Title 2 of Part 6 of Division 4
11of the Civil Code and after acceptance of the work, be reduced to
12an amount equal to the total claimed by
all claimants for whom
13claims of lien have been recorded and notice thereof given in
14writing to the legislative body, and if no claims have been recorded,
15the security shall be released in full.
16(i) The release shall not apply to any required guarantee and
17warranty period required by Section 66499.9 for the guarantee or
18warranty nor to the amount of the security deemed necessary by
19the local agency for the guarantee and warranty period nor to costs
20and reasonable expenses and fees, including reasonable attorney’s
21fees.
22(j) The legislative body may authorize any of its public officers
23or employees to authorize release or reduction of the security in
24accordance with the conditions hereinabove set forth and in
25accordance with any rules that it may prescribe.
26(k) This section shall remain in effect only until January 1, 2016,
27and as of that date is repealed, unless a later enacted statute, that
28is enacted before January 1, 2016, deletes or extends that date.
If the Commission on State Mandates determines that
30this act contains costs mandated by the state, reimbursement to
31local agencies and school districts for those costs shall be made
32pursuant to Part 7 (commencing with Section 17500) of Division
334 of Title 2 of the Government Code.
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