AB 1883, as introduced, Skinner. Public improvements: contractual assessments: delinquency.
Existing law, under the Improvement Act of 1911, authorizes the legislative body of a public agency to designate an area within which the public agency and property owners may enter into voluntary contractual assessments to finance certain public improvements. Existing law authorizes the public agency to advance its own funds to finance work to be repaid through the voluntary assessments, and to issue bonds in that regard. Existing law provides that assessments levied in this manner constitute a lien against the property on which the assessments are made, and, in the case of delinquency, provides for collection of assessments and associated interest and penalties, as specified.
This bill would authorize a public agency to transfer, as defined, its right, title, and interest in any voluntary contractual assessments and in all rights to initiate and prosecute a foreclosure action resulting from a delinquency in those assessments, as specified, if bonds have not been issued in that regard.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 5898.28 of the Streets and Highways
2Code is amended to read:
begin insert(a)end insertbegin insert end insertA public agency may issue bonds pursuant to this
4chapter, the principal and interest for which would be repaid by
5voluntary contractual assessments. A public agency may advance
6its own funds to finance work to be repaid through voluntary
7contractual assessments, and may from time to time sell bonds to
8reimburse itself forbegin delete suchend deletebegin insert thoseend insert advances. A public agency may
9enter into a relationship with an underwriter or financial institution
10that would allow the sequential issuance of a series of bonds, each
11bond being issued as the need
arose to finance work to be repaid
12through voluntary contractual assessments. The interest rate of
13each bond may be determined by an appropriate index, but shall
14be fixed at the time each bond is issued. Bond proceeds may be
15used to establish a reserve fund, and to pay for expenses incidental
16to the issuance and sale of the bonds. Division 10 (commencing
17with Section 8500) shall apply to any bonds issued pursuant to
18this section, insofar as that division is not in conflict with this
19chapter.
20(b) Notwithstanding any provision of this division or the
21Improvement Act of 1915 (Division 10 (commencing with Section
228500)), a public agency may transfer its right, title, and interest
23in and to (1) any voluntary contractual assessments and (2) all
24rights to initiate and prosecute a foreclosure action resulting from
25a delinquency in the payment of the voluntary contractual
26
assessments, if bonds have not been issued pursuant to subdivision
27(a). A transfer of any voluntary contractual assessments under this
28subdivision shall be treated as a true and absolute transfer of the
29asset so transferred and not as a pledge or grant of a security
30interest by the public agency for any borrowing. The
31characterization of the transfer of any of those assets as an
32absolute transfer by the public agency shall not be negated or
33adversely affected by the fact that only a portion of any voluntary
34contractual assessment is transferred, nor by any characterization
35of the transferee for purposes of accounting, taxation, or securities
36regulation, nor by any other factor whatsoever. As used in this
37section, “transfer” means sale, assignment, or other transfer.
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