BILL NUMBER: AB 474	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 25, 2009
	AMENDED IN ASSEMBLY  MAY 18, 2009
	AMENDED IN ASSEMBLY  APRIL 27, 2009
	AMENDED IN ASSEMBLY  APRIL 14, 2009

INTRODUCED BY   Assembly Member Blumenfield
   (  Coauthor:   Assembly Member 
 Bill Berryhill   Coauthors:   Assembly
Members   Bill Berryhill,   Caballero,  
Gilmore,   Krekorian,   and Nestande  )

                        FEBRUARY 24, 2009

   An act to amend  Section 1102.6b of the Civil Code, and to
amend  Sections 5898.12, 5898.14, 5898.20, 5898.21, 5898.22,
5898.24, 5898.28,  and 5898.30 of   5898.30, and
5898.32 of, and to add Section 5898.31 to,  the Streets and
Highways Code, relating to contractual assessments  , and
declaring the urgency thereof, to take effect immediately  .


	LEGISLATIVE COUNSEL'S DIGEST


   AB 474, as amended, Blumenfield. Contractual assessments: water
efficiency improvements.
   Existing law authorizes the legislative body of any city, defined
as a city, county, or city and county, to determine that it would be
convenient and advantageous to designate an area within which
authorized city officials and free and willing property owners may
enter into contractual assessments and make arrangements to finance
public improvements to specified lots or parcels or to finance the
installation of distributed generation renewable energy sources or
energy efficiency improvements that are permanently fixed to real
property, as specified. Existing law requires the legislative body to
make these determinations by adopting a resolution indicating its
intention to do so and requires the resolution to include certain
specified information.
   This bill would expand these provisions to authorize the
legislative body of any public agency, as defined, to determine that
it would be in the public interest to designate an area within which
authorized city officials and free and willing property owners may
enter into contractual assessments to finance the installation of
water efficiency improvements that are permanently fixed to real
property, as specified. The bill would also, with respect to all of
its provisions, modify  the   its 
definitions  of "city" and "legislative body"  and
require a legislative body to  perform additional record ke 
 eping duties and  provide  written  
specified  notice  of a hearing  to any entity
that provides energy or water within the boundaries of the area
within which contractual assessments may be entered into  . This
bill would also require additional specified disclosures to a
transfer of real property subject to a contractual assessment .
The bill would declare the intent of the Legislature in  this
 regard  to these provisions  . This bill would
make technical, nonsubstantive changes to these provisions. 
   This bill would declare that it is to take effect immediately as
an urgency statute. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee: no. State-mandated local program: no.


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

   SECTION 1.    Section 1102.6b of the   Civil
Code   is amended to read: 
   1102.6b.  (a) This section applies to all transfers of real
property for which all of the following apply:
   (1) The transfer is subject to this article.
   (2) The property being transferred is subject to a continuing lien
securing the levy of special taxes pursuant to the Mello-Roos
Community Facilities Act (Chapter 2.5 (commencing with Section 53311)
of Part 1 of Division 2 of Title 5 of the Government Code) 
or   ,  to a fixed lien assessment collected in
installments to secure bonds issued pursuant to the Improvement Bond
Act of 1915 (Division 10 (commencing with Section 8500) of the
Streets and Highways Code) , or to a contractual assessment
program authorized pursuant to Chapter 29 (commencing with Section
5859.10) of Part 3 of Division 7 of the Streets and Highway Code
 .
   (3) A notice is not required pursuant to Section 53341.5 of the
Government Code.
   (b) In addition to any other disclosure required pursuant to this
article, the seller of any real property subject to this section
shall make a good faith effort to obtain a disclosure notice
concerning the special tax as provided for in Section 53340.2 of the
Government Code, or a disclosure notice concerning an assessment
installment as provided in Section 53754 of the Government Code, from
each local agency that levies a special tax pursuant to the
Mello-Roos Community Facilities Act, or that collects assessment
installments to secure bonds issued pursuant to the Improvement Bond
Act of 1915 (Division 10 (commencing with Section 8500) of the
Streets and Highways Code), on the property being transferred, and
shall deliver that notice or those notices to the prospective
purchaser, as long as the notices are made available by the local
agency.
   (c) The seller of real property subject to this section may
satisfy the disclosure notice requirements in regard to the bonds
issued pursuant to the Improvement Bond Act of 1915 (Division 10
(commencing with Section 8500) of the Streets and Highways Code) by
delivering a disclosure notice that is substantially equivalent and
obtained from another source, until December 31, 2004. For the
purposes of this section, a substantially equivalent disclosure
notice includes, but is not limited to, a copy of the most recent
year's property tax bill or an itemization of current assessment
amounts applicable to the property.
   (d) (1) Notwithstanding subdivision (c), at any time after the
effective date of this section, the seller of real property subject
to this section may satisfy the disclosure notice requirements of
this section by delivering a disclosure notice obtained from a
nongovernmental source that satisfies the requirements of paragraph
(2).
   (2) A notice provided by a private entity other than a designated
office, department, or bureau of the levying entity may be modified
as needed to clearly and accurately describe a special tax pursuant
to the Mello-Roos Community Facilities Act levied against the
property or to clearly and accurately consolidate information about
two or more districts that levy or are authorized to levy a special
tax pursuant to the Mello-Roos Community Facilities Act against the
property, and shall include the name of the Mello-Roos entity levying
taxes against the property, the annual tax due for the Mello-Roos
entity for the current tax year, the maximum tax that may be levied
against the property in any year, the percentage by which the maximum
tax for the Mello-Roos entity may increase per year, and the date
until the tax may be levied against the property for the Mello-Roos
entity and a contact telephone number, if available, for further
information about the Mello-Roos entity. A notice provided by a
private entity other than a designated office, department, or bureau
of the levying entity may be modified as needed to clearly and
accurately describe special assessments and bonds pursuant to the
Improvement Bond Act of 1915 levied against the property, or to
clearly and accurately consolidate information about two or more
districts that levy or are authorized to levy special assessments and
bonds pursuant to the Improvement Bond Act of 1915 against the
property, and shall include the name of the special assessments and
bonds issued pursuant to the Improvement Bond Act of 1915, the
current annual tax on the property for the special assessments and
bonds issued pursuant to the Improvement Bond Act of 1915 and a
contact telephone number, if available, for further information about
the special assessments and bonds issued pursuant to the Improvement
Bond Act of 1915.
   (3) This section does not change the ability to make disclosures
pursuant to Section 1102.4 of the Civil Code.
   (e) If a disclosure received pursuant to subdivision (b), (c), or
(d) has been delivered to the transferee, a seller or his or her
agent is not required to provide additional information concerning,
and information in the disclosure shall be deemed to satisfy the
responsibility of the seller or his or her agent to inform the
transferee regarding the special tax or assessment installments and
the district. Notwithstanding subdivision (b), (c), or (d), nothing
in this section imposes a duty to discover a special tax or
assessment installments or the existence of any levying district not
actually known to the agents.
   SECTION 1.   SEC. 2.   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 which 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 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  water-porous
concrete.   permeable pavement.  
   (d) It is also the intent of the Legislature that a public agency
in the process of establishing an assessment program, to the extent
feasible, use a good faith effort to provide advance notice of the
proposed program to water and electric service providers in the
relevant service area, as set forth in Section 5898.24, to allow the
most efficient coordination and collaboration between the public
agency and water and electric service providers.  
   (d) 
    (e)  This chapter shall not be used to finance
facilities for parcels which are undergoing development. 
   (e) 
    (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. 
   (f) 
    (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. 
   (g) A water district, as included in the definition of "public
agency" in Section 5898.20, is authorized to use this chapter only
for water efficiency improvements, and shall not use this chapter for
any other improvements, including, but not limited to, energy
efficiency improvements. 
   SEC. 2.   SEC. 3.   Section 5898.14 of
the Streets and Highways Code is amended to read:
   5898.14.  (a) The Legislature finds all of the following:
   (1) Energy and water conservation efforts, including the promotion
of energy efficiency improvements to residential, commercial,
industrial, agricultural, or other real property are necessary to
address the issue of global climate change.
   (2) The upfront cost of making residential, commercial,
industrial, or other real property more energy and water efficient
prevents many property owners from making those improvements. To make
those improvements more affordable and to promote the installation
of those improvements, it is necessary to authorize an alternative
procedure for authorizing assessments to finance the cost of energy
and water efficiency improvements.
   (b) The Legislature declares that a public purpose will be served
by a  voluntary  contractual assessment program that
provides the legislative body of any public agency with the authority
to finance the installation of distributed generation renewable
energy sources and energy or water efficiency improvements that are
permanently fixed to residential, commercial, industrial,
agricultural, or other real property.
   SEC. 3.   SEC. 4.   Section 5898.20 of
the Streets and Highways Code is amended to read:
   5898.20.  (a) (1) The legislative body of any public agency may
determine that it would be convenient and advantageous to designate
an area within the public agency, which may encompass the entire
public agency or a lesser portion, within which authorized public
agency officials and property owners may enter into  voluntary
 contractual assessments for public improvements and to make
financing arrangements pursuant to this chapter.
   (2) The legislative body of any public agency may also determine
that it would be convenient, advantageous, and in the public interest
to designate an area within the public agency, which may encompass
the entire public agency or a lesser portion, within which authorized
public agency officials and property owners may enter into 
voluntary  contractual assessments to finance the installation
of distributed generation renewable energy sources or energy or water
efficiency improvements that are permanently fixed to real property
pursuant to this chapter.
   (b) The legislative body shall make these determinations by
adopting a resolution indicating its intention to do so. The
resolution of intention shall include a statement that the public
agency proposes to make  voluntary  contractual assessment
financing available to property owners, shall identify the kinds of
public works, distributed generation renewable energy sources, or
energy or water efficiency improvements that may be financed, shall
describe the boundaries of the area within which  voluntary 
contractual assessments may be entered into, and shall briefly
describe the proposed arrangements for financing the program,
including a brief description of criteria for determining the
creditworthiness of a property owner. The resolution of intention
shall state that it is in the public interest to finance the
installation of distributed generation renewable energy sources or
energy or water efficiency improvements, or both, pursuant to
paragraph (2) of subdivision (a), if applicable. The resolution shall
state that a public hearing should be held at which interested
persons may object to or inquire about the proposed program or any of
its particulars, and shall state the time and place of the hearing.
The resolution shall direct an appropriate public agency official to
prepare a report pursuant to Section 5898.22 and to enter into
consultations with the county auditor's office or county controller's
office in order to reach agreement on what additional fees, if any,
will be charged to the city or county for incorporating the proposed
 voluntary  contractual assessments into the assessments of
the general taxes of the city or county on real property.
   (c)  (1)    As used in this
chapter, each of the following terms shall have the following
meaning: 
   (A) 
    (1)  "Efficiency improvements" means permanent
improvements fixed to residential, commercial, industrial,
agricultural, or other real property. 
   (B) 
    (2)  "Legislative body" means the governing body of a
public agency. 
   (C) "Public agency" means a city, county, city and county,
municipal utility district, community services district, or water
district, as defined in Section 20200 of the Water Code. 

   (2) The definitions of "city" in Section 5005 and "legislative
body" in Section 5006 shall not apply to this chapter.  

   (3) (A) For the purpose of financing the installation of water
efficiency improvements, "public agency" means a city, county, city
and county, municipal utility district, community services district,
sanitary district, sanitation district, or water district, as defined
in Section 20200 of the Water Code. The definition of "city" in
Section 5005 shall not apply to this subparagraph.  
   (B) For the purpose of financing the installation of distributed
generation renewable energy sources or energy efficiency
improvements, "public agency" means a county, city, city and county,
or a municipal utility district, an irrigation district, or public
utility district that owns and operates an electric distribution
system. The definition of "city" in Section 5005 shall not apply to
this subparagraph.  
   (C) For the purpose of financing the public improvements, "public
agency" means a city as defined in Section 5005. 
   SEC. 4.   SEC. 5.   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 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 for the installation
of distributed generation renewable energy sources or energy or
water efficiency improvements that are permanently fixed to the
property owner's residential, commercial, industrial, agricultural,
or other real property.
   SEC. 5.   SEC. 6.   Section 5898.22 of
the Streets and Highways Code is amended to read:
   5898.22.  The report shall contain all of the following:
   (a) A map showing the boundaries of the territory within which
 voluntary  contractual assessments are proposed to be
offered.
   (b) A draft contract specifying the terms and conditions that
would be agreed to by a property owner within the  voluntary
 contractual assessment area and the public agency.
   (c) A statement of public agency policies concerning 
voluntary  contractual assessments including all of the
following:
   (1) Identification of types of facilities, distributed generation
renewable energy sources, or energy or water efficiency improvements
that may be financed through the use of contractual assessments.
   (2) Identification of a public agency official authorized to enter
into  voluntary  contractual assessments on behalf of the
public agency.
   (3) A maximum aggregate dollar amount of  voluntary 
contractual assessments.
   (4) A method for setting requests from property owners for
financing through  voluntary  contractual assessments in
priority order in the event that requests appear likely to exceed the
authorization amount.
   (d) A plan for raising a capital amount required to pay for work
performed pursuant to  voluntary  contractual assessments.
The plan may include amounts to be advanced by the public agency
through funds available to it from any source. The plan may include
the sale of a bond or bonds or other financing relationship pursuant
to Section 5898.28. The plan shall include a statement of or method
for determining the interest rate and time period during which
contracting property owners would pay any assessment. The plan shall
provide for any reserve fund or funds. The plan shall provide for the
apportionment of all or any portion of the costs incidental to
financing, administration, and collection of the  voluntary 
contractual assessment program among the consenting property owners
and the public agency.
   (e) A report on the results of the consultations with the county
auditor's office or county controller's office concerning the
additional fees, if any, that will be charged to the city or county
for incorporating the proposed  voluntary  contractual
assessments into the assessments of the general taxes of the city or
county on real property, and a plan for financing the payment of
those fees.
   SEC. 6.   SEC. 7.   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) A legislative body shall provide written notice of a hearing
to any entity that provides energy or water within the boundaries of
the area within which contractual assessments may be entered into.
 
   (b) A legislative body shall provide written notice of a proposed
contractual assessment program to all water or electric providers
within the boundaries of the area within which voluntary contractual
assessments may be entered into not less than 60 days prior to
adoption of any resolution pursuant to Section 5898.26.  
   (c) (1) A legislative body administering a voluntary contractual
assessment program shall designate an office, department, or bureau
of the local 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.  
   (d) (1) 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, the designated
office, department, or bureau shall furnish a Notice of Voluntary
Contractual Assessment to any individual requesting the notice or to
any owner of property subject to a voluntary contractual assessment
levied by the local agency within five working days of receiving a
request for the notice.  
   (2) The local agency may charge a fee to pay for the actual cost
of providing service under this subdivision not to exceed fifteen
dollars ($15).  
   (e) The notice shall be completed by the designated office,
department, or bureau except for the signatures and date of signing,
and the form may be modified as needed to clearly and accurately
describe the assessment. The notice shall contain the heading "NOTICE
OF VOLUNTARY CONTRACTUAL ASSESSMENT" in type no smaller than 8-point
type, and shall be in substantially the following form: 


           NOTICE OF CONTRACTUAL ASSESSMENT 
LOCAL AGENCY ______ 
 COUNTY OF ______, CALIFORNIA 
 TO: THE PROSPECTIVE PURCHASER OF THE REAL 
 PROPERTY KNOWN AS: 
 ______________________________ 
 ______________________________ 
 THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR 
 PURCHASING THIS PROPERTY. 


   (1) This property is subject to a voluntary contractual assessment
that is in addition to the regular property taxes and any other
charges and benefit assessments on the parcel. This voluntary
contractual assessment is not necessarily imposed on all parcels
within the city, the county, or even the subdivision in which the
property is located, but only on those parcels to which the property
owner financed improvements to the property pursuant to Chapter 29 of
Part 3 of the California Streets and Highways Code. If you fail to
pay this contractual assessment when due each year, the property may
be foreclosed upon and sold. The voluntary contractual assessment is
used to provide improvements that particularly benefit the property.
YOU SHOULD TAKE THIS ASSESSMENT AND THE BENEFITS FROM THE
IMPROVEMENTS FOR WHICH IT PAYS INTO ACCOUNT IN DECIDING WHETHER TO
BUY THIS PROPERTY.  
   (2) The voluntary contractual assessment against this parcel is to
pay for improvements to this property and equals ____ dollars ($
____) during the ____ -__ tax year. The voluntary contractual
assessment will be imposed each year until the financing for all of
improvements has been paid.  
   (3) The improvements that are being financed by the voluntary
contractual assessment are:  
   ________________________________  
   ________________________________  
   YOU MAY OBTAIN A COPY OF THE CONTRACT PROVIDING FOR THESE
ASSESSMENTS FROM THE ________ (name of jurisdiction) BY CALLING
______ (telephone number). THERE MAY BE A CHARGE FOR THIS DOCUMENT
NOT TO EXCEED THE ACTUAL COST OF PROVIDING THE DOCUMENT.  
   I (WE) ACKNOWLEDGE THAT I (WE) HAVE RECEIVED A COPY OF THIS
NOTICE. I (WE) UNDERSTAND THAT I (WE) MAY TERMINATE THE CONTRACT TO
PURCHASE OR DEPOSIT RECEIPT AFTER RECEIVING THIS NOTICE FROM THE
OWNER OR AGENT SELLING THE PROPERTY. THE CONTRACT MAY BE TERMINATED
WITHIN THREE DAYS IF THE NOTICE WAS RECEIVED IN PERSON OR WITHIN FIVE
DAYS AFTER IT WAS DEPOSITED IN THE MAIL BY GIVING WRITTEN NOTICE OF
THAT TERMINATION TO THE OWNER OR AGENT SELLING THE PROPERTY. 

   DATE: ____________  
   ______________________  
   ______________________ 
   SEC. 7.   SEC. 8.   Section 5898.28 of
the Streets and Highways Code is amended to read:
   5898.28.  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 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.
   SEC. 8.   SEC. 9.   Section 5898.30 of
the Streets and Highways Code is amended to read:
   5898.30.  Assessments levied pursuant to this chapter, and the
interest and any penalties thereon shall constitute a lien against
the lots and parcels of land on which they are made, until they are
 paid. Division 10 (commencing with Section 8500) applies to
the levy and collection of assessments levied pursuant to this
chapter, insofar as those provisions are not in conflict with the
provisions of this chapter, including, but not limited to, the
collection of assessments in the same manner and at the same time as
the general taxes of the city or county on real property are payable
and any penalties and remedies and lien priorities in the event of
delinquency and default.   paid. Division 10 (commencing
with Section 8500), insofar as those provisions are not in conflict
with the provisions of this chapter, Article 13 (commencing with
Section 53930) of, and Article 13.5 (commencing with Section 53938)
of, Chapter 4 of Part 1 of Division 2 of Title 5 of the Government
Code apply to the imposition and collection of assessments contracted
for pursuant to this chapter, including, but not limited to,
provisions related to lien priority, the collection of assessments in
the same manner and at the same time as the general taxes of the
city or county on real property, and any penalties and remedies in
the event of delinquency and default. 
   SEC. 10.    Section 5898.31 is added to the 
 Streets and Highways Code   , to read:  
   5898.31.  Since contractual assessments on real property under
this chapter are voluntary and imposed pursuant to an agreement with
an assessed property owner, the Legislature finds and declares that
voluntary contractual assessments under this chapter are not
assessments for the purposes of Articles XIII C and XIII D of the
California Constitution and therefore the provisions of Articles XIII
C and XIII D and Article 4.6 (commencing with Section 53750) of
Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code
are not applicable to voluntary contractual assessments levied
pursuant to this chapter. 
               SEC. 11.    Section 5898.32 of the 
 Streets and Highways Code   is amended to read: 
   5898.32.  The legislative body shall direct its clerk to record a
notice of the existence and amount of each  voluntary 
contractual assessment with the county recorder of the county in
which the lot or parcel is located.  The form of notice filed by
the clerk shall be substantially the same form as set forth in
subdivision (f) of Section 3114.  The county recorder shall
accept those filings and may charge the clerk a fee for recording
those documents pursuant to Section 3116. The failure of the clerk or
recorder to perform the filings shall not subject the local agency
or any of its officers or employees to civil liability.  The
remaining provisions of Division 4.5 do not apply to this chapter.

   SEC. 12.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order for legislative bodies of public agencies and willing
property owners to enter into voluntary contractual assessments to
finance water efficiency improvements and for the state to begin to
experience the effects of these voluntary contractual assessments, it
is necessary that this act take effect immediately.