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AB-271 Property Assessed Clean Energy program.(2017-2018)

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Date Published: 04/05/2017 04:00 AM
AB271:v98#DOCUMENT

Amended  IN  Assembly  April 04, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 271


Introduced by Assembly Member Caballero
(Coauthor: Senator Galgiani)

February 01, 2017


An act to amend Section 53356.2 of, and to add Sections 53340.8 and 53340.9 to, the Government Code, and to amend Sections 5898.30 and 8680 of and 8833 of, and to add Section 5898.34 to, the Streets and Highways Code, relating to the Property Assessed Clean Energy program.


LEGISLATIVE COUNSEL'S DIGEST


AB 271, as amended, Caballero. Property Assessed Clean Energy program.
(1) Existing law authorizes applicants, defined as including specified public agencies, entities administering Property Assessed Clean Energy (PACE) financing programs on behalf of and with the written consent of public agencies, or financial institutions, to assist property owners in financing the installation of distributed generation renewable energy sources, electric vehicle charging infrastructure, or energy or water efficiency improvements through the issuance of PACE bonds that are secured by voluntary contractual assessments, voluntary special taxes, or special taxes on property. property, collectively known as PACE assessments.
When foreclosure actions are ordered by a local agency or legislative body, or when subsequent installments and interest that are also to be made the subject of a foreclosure action thereafter become delinquent, and the foreclosure action is not commenced and a notice of pendency of action is not concurrently recorded, prior to the actual removal of a delinquent installment from the tax roll, existing law requires the local agency or legislative body responsible for the foreclosure action on the delinquent installment to record or cause to have recorded in the county recorder’s office in the county in which the real property is located, located a Notice of Intent to Remove Delinquent Special Tax Installment from the Tax Roll.
This bill, as an alternative to that notice requirement, bill would authorize the local agency or legislative body to provide notice of the removal of the county tax collector to direct the county auditor to remove a delinquent voluntary contractual assessment or special tax, installment based on a PACE assessment from the county’s secured tax roll, if it arises from a contract entered into on or after January 1, 2018, through the adoption of a resolution or ordinance requiring the county tax collector to remove all delinquent voluntary contractual assessments and special taxes securing PACE bonds and arising from contracts entered into on or after January 1, 2018, from the county’s secured tax roll during the annual fiscal yearend closing, whether or not a foreclosure action has been ordered. 2018. The bill would require the county tax collector, immediately upon that removal and for each parcel for which the delinquent installment was removed, to provide notice on the secured tax roll of the removal.
(2) Under existing law, property taxes, if unpaid by specified dates, incur specified delinquency and redemption penalties.
This bill would require, as to PACE-related PACE assessments arising from contracts entered into on or after January 1, 2018, that those specified penalties and other specified costs, whether collected on the secured tax roll or pursuant to a sale or foreclosure, be deposited in a restricted county fund. The bill would require the county in possession of the fund to appropriate those moneys only for the purpose of offsetting general fund property tax revenues of local taxing agencies that are lost when a property subject to a voluntary contractual PACE assessment or special tax securing a PACE bond is sold at a tax defaulted land sale for less than a specified minimum price. The bill also would exempt those voluntary contractual assessments and special taxes securing PACE bonds PACE assessments removed from the tax roll pursuant to paragraph (1), above, from those penalties.
Because this bill would require counties to deposit those penalties and other specified costs in specified funds, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 53356.2 of the Government Code is amended to read:

53356.2.
 (a) When any foreclosure actions are ordered by the local agency or legislative body, or when subsequent installments and interest that are also to be made the subject of a foreclosure action thereafter become delinquent, and the foreclosure action is not commenced and a notice of pendency of action is not concurrently recorded, prior to the actual removal of the delinquent installment from the tax roll, the local agency or legislative body responsible for the foreclosure action on the delinquent installment shall do one of the following:
(1) Prior to the actual removal of the delinquent installment from the tax roll, the local agency or legislative body shall record or cause to have recorded in the county recorder’s office in the county in which the real property is located, a Notice of Intent to Remove Delinquent Special Tax Installment from the Tax Roll, which contains the information set forth in subdivision (b). If action is taken under this paragraph, all of the following apply:
(A) Upon presentation of written proof of the recordation and a request for removal by the local agency or legislative body, the county auditor shall remove the delinquent installments from the tax roll. “Proof of recordation” includes, but is not limited to, a certified copy of the notice set forth in subdivision (b), or a copy of the recorded notice containing the county recorder’s assigned document number, or a copy of the recorded notice containing a copy stamp from the office of the county recorder.
(B) From the date of the recordation, the county tax collector shall be credited upon the current tax roll with the amount charged against him or her on account of the delinquent special tax installment. If any person pays the delinquent installment referred to in the Notice of Intent to Remove Delinquent Special Tax Installment from the Tax Roll to the county tax collector prior to or subsequent to the actual removal of that delinquent installment from the tax roll, the county auditor shall forward that payment to the local agency or legislative body responsible for the foreclosure action.
(C) From the date of recordation pursuant to this section, the special tax installment, and interest thereon, and penalties, costs, fees, and other charges accrued under applicable statutes, that are to be collected in a foreclosure action, shall no longer be collectible by the county tax collector.
(D) The county tax collector, in addition to the costs recovered in foreclosure, may charge the actual costs incurred in removing these sums from the tax roll or the performance of any other related duties as set forth in this section.
(E) Installments, interest, penalties, costs, fees, and other charges that do not become the subject of a foreclosure action shall remain collectible by the county tax collector as otherwise provided by applicable law.
(2) As an alternative to the notice requirement set forth in paragraph (1), the Counties of San Bernardino and Riverside may, simultaneously with the removal of the delinquent special tax installment from the secured tax roll, provide notification on the secured tax roll that the installment has been removed from the roll for each parcel for which the delinquent special tax installment was removed. The notice shall be displayed in a manner which conveys that the removal has occurred, and shall include the name and telephone number of the person or entity to be contacted to receive further information.

(3)(A)As an alternative to the notice requirement set forth in paragraph (1), the local agency or legislative body, upon governing body approval, may provide notice of the removal of a delinquent voluntary contractual assessment or special tax described in Section 26054 of the Public Resources Code through the adoption of a resolution or ordinance requiring the county tax collector to request the county auditor to remove all delinquent voluntary contractual assessments and special taxes described in Section 26054 of the Public Resources Code from the county’s secured tax roll during the annual fiscal yearend closing, whether or not a foreclosure action has been ordered.

(B)This paragraph shall only apply to voluntary contractual assessments or special taxes that arise from contracts entered into on or after January 1, 2018.

(b) The Notice of Intent to Remove Delinquent Special Tax Installment from the Tax Roll shall be completed and recorded by or caused to be recorded by the local agency or legislative body responsible for the foreclosure action, and shall contain all of the following:
(1) The name of the local agency or legislative body, city, or other assessment district responsible for the foreclosure action.
(2) The legal description or assessor’s parcel number of the property affected by the notice.
(3) The specific tax year and installment intended to be removed from the tax roll.
(4) The title, address, and telephone number of the employee, city official, or other authorized official who should be contacted regarding the delinquent assessment installment amount.
(5) The name of the owner shown on the last equalized assessment roll.
(c) Any local agency or legislative body that removed or caused to be removed a delinquent special tax installment from the ad valorem tax roll prior to January 1, 1997, shall record, by July 1, 1997, a Notice of Intent to Remove Delinquent Special Tax Installment from the Tax Roll or shall request the tax collector to retain the notice of delinquent special tax installment on the tax roll as set forth in paragraph (2) of subdivision (a). If the foreclosure action has been filed and a notice of pendency of action has been recorded in the county recorder’s office prior to July 1, 1997, this requirement does not apply.
(d) All costs associated with the county tax collector’s and local agency’s or legislative body’s responsibilities as set forth in this section shall be recoverable by the local agency or legislative body through the foreclosure action.
(e) The recording of a notice of pendency of action in the county recorder’s office in the county in which the real property is located, concurrent with the commencement of a foreclosure action ordered by the local agency or legislative body and commenced prior to the actual removal from the tax roll of the delinquent installment which is the subject of the foreclosure action, constitutes compliance with the notice requirements of this section.
(f) (1) This subdivision shall apply only to a delinquent installment based on a voluntary contractual assessment, voluntary special tax, or special tax, as described in subdivision (b) or (c) of Section 26054 of the Public Resources Code, that arises from a contract entered into on or after January 1, 2018.
(2) (A) The county tax collector may direct the county auditor to remove a delinquent installment from the county’s secured tax roll.
(B) Immediately upon that removal, for each parcel for which the delinquent installment was removed, the county tax collector shall provide notice on the secured tax roll that the delinquent installment has been removed. The notice shall be displayed on the secured tax roll in a manner that conveys that the removal has occurred, and may include the name and telephone number of the person or entity to be contacted to receive further information.

SEC. 2.Section 53340.8 is added to the Government Code, to read:
53340.8.

(a)Notwithstanding any other law, for a property subject to a special tax described in subdivision (c) of Section 26054 of the Public Resources Code, that accrues a penalty or cost pursuant to Section 2617, 2618, 2621, or 4103 of the Revenue and Taxation Code and subdivision (e) of Section 53340, that accrued penalty or cost, whether collected on the secured tax roll or pursuant to a foreclosure, shall be deposited in a restricted county fund.

(b)For properties subject to a special tax described in subdivision (c) of Section 26054 of the Public Resources Code the authority to collect a defaulted lien on that special tax cannot be transferred to, subject to, or contingent upon, third-party approval or another arrangement or agreement by the lien holder, unless that special tax has been removed from the county’s secured tax roll and the right to collect the special tax and any defaulted lien is returned to the administrator of the PACE program, as defined in Section 26055 of the Public Resources Code.

(c)This section shall only apply to special taxes that arise from contracts entered into on or after January 1, 2018.

SEC. 2.

 Section 53340.8 is added to the Government Code, to read:

53340.8.
 (a) For purposes of this section, “PACE assessment” means a voluntary contractual assessment, voluntary special tax, or special tax, as described in subdivision (b) or (c) of Section 26054 of the Public Resources Code.
(b) (1) Notwithstanding any other law, for a property subject to a PACE assessment that accrues a penalty or cost pursuant to Section 2617, 2618, 2621, or 4103 of the Revenue and Taxation Code and that is subject to subdivision (e) of Section 53340, that accrued penalty or cost applicable to the PACE assessment, whether collected on the secured tax roll or pursuant to a sale or foreclosure, shall be deposited in the restricted county fund created pursuant to Section 53340.9. If collected pursuant to a sale or foreclosure, the holder of the lien based on the PACE assessment shall remit the penalty or cost to the county tax collector within 30 days of the sale or foreclosure.
(2) This subdivision shall apply only to a property with a PACE assessment that arises from a contract entered into on or after January 1, 2018.
(c) (1) Except as specified in paragraph (2), a property subject to a PACE assessment shall not be subject to an agreement wherein the authority to collect a defaulted lien based on a PACE assessment is transferred to, subject to, or contingent upon, third-party approval or another arrangement or agreement by the lienholder, unless that lien has been removed from the county’s secured tax roll and the right to collect the PACE assessment and any defaulted lien amount is returned to the administrator of the PACE program.
(2) This subdivision shall not apply to a PACE assessment made subject to, on or before January 1, 2018, a contractual waiver of the right to foreclose, or other arrangement or agreement between a lienholder and a lender, or a lienholder and another third party, wherein the agreement requires approval by the other party prior to the lienholder’s exercise of foreclosure.

SEC. 3.

 Section 53340.9 is added to the Government Code, to read:

53340.9.
 The county shall appropriate moneys from the fund create a restricted fund to receive moneys described in subdivision (a) (b) of Section 53340.8 and subdivision (b) of Section 5898.34 of the Streets and Highways Code, and shall appropriate moneys from the fund only for the purpose of offsetting general fund property tax revenues of local taxing agencies that are lost when a property subject to a voluntary contractual assessment assessment, voluntary special tax, or special tax described in Section 26054 of the Public Resources Code is sold at a tax-defaulted land sale for less than the minimum price described in Section 3698.5 of the Revenue and Taxation Code.

SEC. 4.Section 5898.30 of the Streets and Highways Code is amended to read:
5898.30.

(a)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), insofar as those provisions are not in conflict with this chapter, and Articles 13 (commencing with Section 53930) and 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, unless another procedure has been authorized by the legislative body or by statute, and any penalties and remedies in the event of delinquency and default.

(b)Notwithstanding any other law, for a property subject to a voluntary contractual assessment or a voluntary special tax described in subdivision (a) or (b) of Section 26054 of the Public Resources Code that accrues a penalty or cost pursuant to Section 2617, 2618, 2621, or 4103 of the Revenue and Taxation Code and is subject to subdivision (a), that accrued penalty or cost, whether collected on the secured tax roll or pursuant to a sale or foreclosure, as defined by Section 3100, shall be deposited in a restricted county fund.

(c)For properties subject to a voluntary contractual assessment or a voluntary special tax described in subdivision (a) or (b) of Section 26054 of the Public Resources Code, the authority to collect a defaulted lien cannot be transferred to, subject to, or contingent upon, third-party approval or another arrangement or agreement by the lien holder, unless that voluntary contractual assessment or voluntary special tax has been removed from the county’s secured tax roll and the right to collect the assessment or tax, and any defaulted lien, is returned to the administrator of the PACE program, as defined in Section 26055 of the Public Resources Code.

(d)The county shall appropriate moneys from the fund described in subdivision (b) only for the purpose of offsetting property tax revenues lost when a property subject to a voluntary contractual assessment or special tax described in Section 26054 of the Public Resources Code is sold at a tax-defaulted land sale for less than the minimum price described in Section 3698.5 of the Revenue and Taxation Code.

(e)Subdivisions (b) and (c) shall only apply to voluntary contractual assessments and voluntary special taxes that arise from contracts entered into on or after January 1, 2018.

SEC. 4.

 Section 5898.34 is added to the Streets and Highways Code, to read:

5898.34.
 (a) For purposes of this section, “PACE assessment” means a voluntary contractual assessment or voluntary special tax, as described in subdivision (a) or (b) of Section 26054 of the Public Resources Code.
(b) (1) Notwithstanding any other law, for a property subject to a PACE assessment that accrues a penalty or cost pursuant to Section 2617, 2618, 2621, or 4103 of the Revenue and Taxation Code and that is subject to Section 5898.30, that accrued penalty or cost applicable to the PACE assessment, whether collected on the secured tax roll or pursuant to a sale or foreclosure, shall be deposited in the restricted county fund created pursuant to Section 53340.9 of the Government Code. If collected pursuant to a sale or foreclosure, the holder of the lien based on the PACE assessment shall remit the penalty or cost to the county tax collector within 30 days of the sale or foreclosure.
(2) This subdivision shall apply only to a property with a PACE assessment that arises from a contract entered into on or after January 1, 2018.
(c) (1) Except as specified in paragraph (2), a property subject to a PACE assessment shall not be subject to an agreement wherein the authority to collect a defaulted lien based on a PACE assessment is transferred to, subject to, or contingent upon, third-party approval or another arrangement or agreement by the lienholder, unless that lien has been removed from the county’s secured tax roll and the right to collect the PACE assessment and any defaulted lien amount is returned to the administrator of the PACE program.
(2) This subdivision shall not apply to a PACE assessment made subject to, on or before January 1, 2018, a contractual waiver of the right to foreclose, or other arrangement or agreement between a lienholder and a lender, or a lienholder and another third party, wherein the agreement requires approval by the other party prior to the lienholder’s exercise of foreclosure.

SEC. 5.

 Section 8680 of the Streets and Highways Code is amended to read:

8680.
 (a) The unpaid assessments shall be payable in annual installments corresponding in number and proportionate amount to the number of installments and principal amounts of bonds maturing or becoming subject to mandatory prior redemption in each year pursuant to Section 8650.1. An annual proportion of each assessment shall be payable in each fiscal year preceding the date of maturity or mandatory prior redemption date of each of the bonds which have been issued, sufficient to pay the bonds when due. The annual proportion of each assessment coming due in any year, together with the annual interest on the assessment, shall be payable in the same manner and at the same time and in the same installments as the general taxes of the city on real property are payable, and the assessment installments and the annual interest on the assessment shall be payable and become delinquent at the same times and in the same proportionate amounts and, except as provided in subdivision (b), shall bear the same proportionate penalties and interest after delinquency as do the general taxes on real property of the city.
(b) (1) The legislative body may provide, in the resolution of intention to do the work, that a penalty of 2 percent per month of the total amount of the delinquent installment shall be added to the delinquent installment after the close of business on the delinquency date and an additional penalty of 2 percent of the amount of the delinquency shall be added at the beginning of business on the 10th day of each succeeding month until that delinquent installment and all penalties thereon are fully paid. This penalty shall be in lieu of all other penalties assessed by other provisions of law. The treasurer or the designated paying agent shall collect the penalties with, and as a part of, the delinquent installments, or the legislative body may designate another official and another method of collection. All penalties collected shall be deposited in the redemption fund.
(2) Voluntary contractual assessments assessments, voluntary special taxes, and special taxes taxes, as described in Section 26054 of the Public Resources Code, removed from a county’s secured tax roll pursuant to paragraph (3) of subdivision (a) (f) of Section 53356.2 of the Government Code or subdivision (f) of Section 8833 of the Streets and Highways Code shall not be subject to the penalties and interest described in subdivision (a).

SEC. 6.

 Section 8833 of the Streets and Highways Code is amended to read:

8833.
 (a) When any foreclosure actions are ordered by the local agency or legislative body, or when subsequent installments and interest that are also to be made the subject of a foreclosure action thereafter become delinquent, and the foreclosure action is not commenced and a notice of pendency of action is not concurrently recorded, prior to the actual removal of the delinquent installment from the tax roll, the local agency or legislative body responsible for the foreclosure action on the delinquent installment shall do one of the following:
(1) Prior to the actual removal of the delinquent installment from the tax roll, the local agency or legislative body shall record or cause to have recorded in the county recorder’s office in the county in which the real property is located, a Notice of Intent to Remove Delinquent Assessment Installment from the Tax Roll, which contains the information set forth in subdivision (b). If action is taken under this paragraph, all of the following apply:
(A) Upon presentation of written proof of the recordation and a request for removal by the local agency or legislative body, the county auditor shall remove the delinquent installments from the tax roll. “Proof of recordation” includes, but is not limited to, a certified copy of the notice set forth in subdivision (b), or a copy of the recorded notice containing the county recorder’s assigned document number, or a copy of the recorded notice containing a copy stamp from the office of the county recorder.
(B) From the date of the recordation, the county tax collector shall be credited upon the current assessment roll with the amount charged against him or her on account of the delinquent assessments or reassessments. If any person pays the delinquent installment referred to in the Notice of Intent to Remove Delinquent Assessment Installment from the Tax Roll to the county auditor prior to or subsequent to the actual removal of that delinquent installment from the tax roll, the county tax collector shall forward that payment to the local agency or legislative body responsible for the foreclosure action.
(C) From the date of recordation pursuant to this section, the assessment or reassessment or installment thereof or interest thereon, and penalties, costs, fees, and other charges accrued under applicable statutes, that are to be collected in a foreclosure action, shall no longer be collectible by the county tax collector.
(D) The county tax collector, in addition to the costs recovered in foreclosure, may charge the actual costs incurred in removing these sums from the tax roll or the performance of any other related duties as set forth in this section.
(E) Installments, interest, penalties, costs, fees, and other charges that do not become the subject of a foreclosure action shall remain collectible by the county tax collector as otherwise provided by applicable law.
(2) As an alternative to the notice requirement set forth in paragraph (1), the Counties of San Bernardino and Riverside may, simultaneously with the removal of the delinquent special assessment installment from the secured tax roll, provide notification on the secured tax roll that the installment has been removed from the roll for each parcel for which the delinquent special tax assessment was removed. The notice shall be displayed in a manner that conveys that the removal has occurred, and shall include the name and telephone number of the person or entity to be contacted to receive further information.
(b) The Notice of Intent to Remove Delinquent Assessment Installment from the Tax Roll shall be completed and recorded by or caused to be recorded by the local agency or legislative body responsible for the foreclosure action, and shall contain all of the following:
(1) The name of the local agency or legislative body, city, or other assessment district responsible for the foreclosure action.
(2) The legal description or assessor’s parcel number of the property affected by the notice.
(3) The specific tax year and installment intended to be removed from the tax roll.
(4) The title, address, and telephone number of the employee, city official, or other authorized official who should be contacted regarding the delinquent assessment installment amount.
(5) The name of the owner shown on the last equalized assessment roll.
(c) Any local agency or legislative body that removed or caused to be removed a delinquent assessment installment from the ad valorem tax roll prior to January 1, 1997, shall record, by July 1, 1997, a Notice of Intent to Remove Delinquent Assessment Installment from the Tax Roll or shall request the tax collector to retain the notice of delinquent assessment installment on the tax roll as set forth in paragraph (2) of subdivision (a). If the foreclosure action has been filed and a notice of pendency of action has been recorded in the county recorder’s office prior to July 1, 1997, this requirement does not apply.
(d) All costs associated with the county tax collector’s and local agency’s responsibilities as set forth in this section shall be recoverable by the local agency or legislative body through the foreclosure action.
(e) The recording of a notice of pendency of action in the county recorder’s office in the county in which the real property is located, concurrent with the commencement of a foreclosure action ordered by the local agency or legislative body and commenced prior to the actual removal from the tax roll of the delinquent installment that is the subject of the foreclosure action, constitutes compliance with the notice requirements of this section.
(f) (1) This subdivision shall apply only to a delinquent installment based on a voluntary contractual assessment or voluntary special tax, as described in subdivision (a) or (b) of Section 26054 of the Public Resources Code, that arises from a contract entered into on or after January 1, 2018.
(2) (A) The county tax collector may direct the county auditor to remove a delinquent installment from the county’s secured tax roll.
(B) Immediately upon that removal, for each parcel for which the delinquent installment was removed, the county tax collector shall provide notice on the secured tax roll that the delinquent installment has been removed. The notice shall be displayed on the secured tax roll in a manner that conveys that the removal has occurred, and may include the name and telephone number of the person or entity to be contacted to receive further information.

SEC. 6.SEC. 7.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.