BILL ANALYSIS
SB 1019
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Date of Hearing: June 30, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1019 (Correa) - As Amended: April 29, 2010
Policy Committee: Local Government Vote: 9-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill extends, from January 1, 2011 to January 1, 2016, the
sunset date for procedures that counties and cities must follow
to release subdivision performance securities following the
completion by developers of required public improvements
associated with new developments.
FISCAL EFFECT
Although the bill may contain reimbursable mandated local costs,
affected cities and counties have not filed a test claim for
reimbursement during the five years in which the procedures
extended by this bill have been in effect.
COMMENTS :
1)Background . When a builder or developer builds a new
subdivision, he or she provides the local jurisdiction with an
improvement or performance bond to insure that the public
improvements, such as streets, traffic signals, and parks that
the developer provides are built to the city's or county's
specifications and standards. The bond amount is sufficient
to permit the construction to the specifications. The builder
pays a surety company/insurer a premium to obtain the bond.
When the work is completed, inspected and accepted by the
local jurisdiction, the public works director or the local
legislative body releases the bond.
AB 1460 (Umberg), Chapter 411, Statutes of 2005, established
procedures and timeframes for the release of performance
securities once homebuilders meet city or county
specifications by completing required public improvements. AB
SB 1019
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1460 represented a consensus approach, and had the support of
California's homebuilders and local governments. The measure
contained a January 1, 2011, sunset clause in order to
determine the effectiveness of the program.
2)Purpose . This bill, sponsored by California Building Industry
Association, is intended to retain the procedures negotiated
between builders and local agencies in place for an additional
five years. Since the enactment of AB 1460, there have been no
reported problems with these procedures, nor have counties and
cities filed any test claims for state-mandated local costs.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081