BILL ANALYSIS                                                                                                                                                                                                    



                                        
                       SENATE LOCAL GOVERNMENT COMMITTEE
                            Senator Dave Cox, Chair


          BILL NO:  SB 1019                     HEARING:  4/7/10
          AUTHOR:  Correa                       FISCAL:  Yes
          VERSION:  2/11/10                     CONSULTANT:  Detwiler
          
                       SUBDIVISION PERFORMANCE SECURITIES

                           Background and Existing Law  

          The Subdivision Map Act controls how counties and cities  
          approve the conversion of large landholdings into separate  
          parcels.  Counties and cities commonly impose conditions  
          when they approve proposed subdivisions, often requiring  
          the subdividers to install public works such as street  
          lights, curbs, and sewers.  Sometimes subdividers must  
          provide assurances that the work will be completed,  
          including performance bonds, deposits, credit instruments,  
          liens, or other property interests.  Until 2006, counties  
          and cities followed their own procedures in deciding when  
          to release these securities.

          At the request of builders, the Legislature adopted uniform  
          procedures and time limits by which counties and cities  
          must either release the securities provided for subdivision  
          conditions or tell the subdividers about the incomplete  
          performance or unsatisfactory work (AB 1460, Umberg, 2005).  
           Wary that these new requirements might not work, city  
          officials asked the Legislature to impose a January 1, 2011  
          sunset clause.  Since the 2005 Umberg bill, there are no  
          reported problems with the statutory procedures for  
          releasing subdivision performance securities, nor have  
          counties and cities filed any claims for state-mandated  
          local costs.  Builders want legislators to make the statute  
          permanent.


                                   Proposed Law  

          Senate Bill 1019 repeals the automatic termination date for  
          the procedures for counties and cities to release  
          subdivision performance securities, thereby making the  
          statute permanent.


                                     Comments  




          SB 1019 -- 2/11/10 -- Page 2




          1.   It's time  .  Before the 2005 Umberg bill, counties and  
          cities created their own procedures for releasing  
          subdivision performance securities, resulting in a  
          patchwork of local practices.  The uniform procedures  
          appear to have worked without creating problems for local  
          officials and without resulting in local claims for  
          state-mandated costs.  After trying out the uniform  
          procedures, it's time to make them permanent.

          2.    Moving parts  .  SB 189 (Lowenthal) rewrites the state  
          laws on mechanics liens, based on the California Law  
          Revision Commission's recommendations.  The Assembly  
          Judiciary Committee will act on the Lowenthal bill later  
          this year.  Among other changes, SB 189 repeals a Title of  
          the Civil Code and replaces it with a new Part.  If that  
          effort succeeds, legislators will need to amend SB 1019 to  
          correct the statutory cross-reference to the Civil Code  
          (page 4, lines 9-11).
           

                        Support and Opposition  (4/1/10)

           Support  :  California Building Industry Association.

           Opposition  :  Unknown.