BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           1019 (Correa)
          
          Hearing Date:  04/26/2010           Amended: As Introduced
          Consultant: Mark McKenzie       Policy Vote: L Gov 5-0
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          BILL SUMMARY:   SB 1019 would repeal the January 1, 2011 sunset  
          on a provision that specifies uniform procedures requiring  
          cities and counties to release performance security upon  
          completion or partial completion of a developer project.
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                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           Mandate                potential reimbursable mandate  
          costsGeneral
                                   ----------see staff comments----------
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          ____
          STAFF COMMENTS: This bill may meet the criteria for the Suspense  
          File.  This bill imposes a reimbursable state-mandated local  
          program by indefinitely extending the operation of procedures  
          related to the release of performance security.  Staff notes,  
          however, that there have been no reported problems with these  
          statutory procedures and no mandate test claims have been filed  
          to date by local governments seeking state-reimbursement.
          
          Cities and counties often require a developer to provide  
          specified types of security, such as bonds or other credit  
          instruments, to ensure performance of conditions related to a  
          developer project, such as the installation of street lighting,  
          sidewalks, and sewer lines.  Local governments are required to  
          release a developer's performance security upon final completion  
          and acceptance of the work.  Until 2006, cities and counties  
          followed their own policies and procedures for determining when  
          a project is completed and accepted, whether there should be a  
          partial release of the bond, and when the bond will be released.  
           AB 1460 (Umberg), Chapter 411 of 2005, established uniform  
          procedures and time limits for notification of completion and  
          acceptance of the work, release of performance security, and  
          partial release of security and notification in the case of  
          incomplete or unsatisfactory work.  The requirements established  










          by AB 1460 are scheduled to sunset on January 1, 2011.

          SB 1019 would repeal the sunset date, thereby permanently  
          extending the uniform procedures and requirements that cities  
          and counties must follow related to the release of performance  
          security.

          Staff notes that although no mandate claims have been filed by  
          local agencies subject to the requirements imposed by AB 1460,  
          the possibility of a future claim remains with the permanent  
          extension of those mandated duties by this bill.  It would seem  
          that any costs associated with the establishment of procedures  
          related to release of performance security would have occurred  
          within the five years since the enactment of AB 1460, making a  
          future claim for reimbursement increasingly unlikely.  If the  
          Committee wishes to reduce the state's exposure to mandate  
          costs, however, the bill could be amended to reinstate a sunset  
          date.