Introduction

The 2009 legislative year proved to be one of the most difficult in recent years as the California Legislature remained preoccupied with an escalating budgetary crisis and an ultimatum from the Governor for water reform. The depth of the gridlock in 2009 was evidenced by a dramatic decrease in the volume of legislation that resulted in the fewest bills passed, and the fewest signed into law, in more than 40 years. In 2009, only 872 bills were passed and sent to the Governor, who threatened a mass veto unless the Legislature reached a new water agreement. Eventually the Governor withdrew his mass veto threat but signed only 632 bills into law.

In addition to reducing the volume of legislation, the Legislature's preoccupation with reaching a budget compromise and implementing a comprehensive overhaul and reform of California's ailing water system also affected the character of much of the 2009 real property related legislation, such that it was predominated by bills that were omnibus or clean-up legislation intended to address problems identified in previously enacted laws rather than new ground-breaking issues. Notwithstanding this general assessment, significant legislation was signed into law in 2009 concerning various aspects of the on-going the mortgage crisis. In particular, important new legislation was enacted to address what were identified as abusive practices that contributed to the subprime mortgage meltdown and to bring California into compliance with recently-enacted federal legislation.

Another area of significant legislative activity in 2009 focused on the implementation of previously-enacted environmental initiatives regarding climate change and the related reduction of greenhouse gases. This focus was reflected in the passage of a series of bills that were intended to facilitate the implementation of the California Global Warming Solutions Act of 2006 (AB 1404, SB 104 and ARC 77) and the Sustainable Communities and Climate Protection Act of 2008 (SB 575). Despite its derivative character, this legislation deserves particular attention because of its far-reaching potential consequences for California.

The following legislative review is intended to provide shorthand references to selected bills of interest to the real property law practitioner that were enacted into law in the 2009 legislative session. The actual chaptered versions, copies of which are available from the Legislative Counsel at http://www.leginfo.ca.gov under “Session 2009-2010,” should always be reviewed for details. Unless otherwise noted, all bills covered in this review are operative January 1, 2010.

Appraisers

SB 237, Calderon. Real Estate Appraisers. Amends Sections 11302, 11314, 11315.5, 11409, and 11422 of, adds Sections 11315.1, 11320.5, 11328.1, 11345, 11345.05, 11345.1, 11345.2, 11345.3, 11345.4, 11345.45, 11345.6, 11346, and 11406.5 to, and repeals and adds Section 11343 of, the Business and Professions Code, and amends Section 1090.5 of the Civil Code.

Existing law, the Real Estate Appraisers' Licensing and Certification Law, provides for the licensure and regulation of real estate appraisers and vests the duty of enforcing and administering that law in the Office of Real Estate Appraisers (“Office”). This act requires appraisal management companies, to register with the Office, and subjects those entities to the provisions of the Real Estate Appraisers' Licensing and Certification Law. This act requires the Office to adopt regulations governing the implementation of the registration process, with specified minimum requirements, and to establish registration fees in an amount sufficient to cover administration costs incurred by the Office. This act following existing law for appraisers requires fingerprinting and background checks by the Department of Justice of each controlling person of the applicant. This act also sets forth standards with which an appraisal management company needs to comply, and provides to the Office specified investigative and enforcement authority, including the authority to issue citations or administrative penalties for a violation thereof, to be deposited into the Real Estate Appraisers Regulation Fund.

This act also makes any provision under the Real Estate Appraisers' Licensing and Certification Law that relates to appraisal management companies inoperative 60 days after the effective date of any federal law that mandates the registration or licensing of appraisal management companies with an entity other than the state regulatory authority with jurisdiction over appraisers.

Existing law prohibits a person with an interest in a real estate transaction involving an appraisal to improperly influence or attempt to improperly influence, through coercion, extortion, or bribery, the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan, and specifies that a violation of this provision by a person licensed under a state licensing law also constitutes a violation of that law. This act enumerates additional specified acts prohibited under the statute, including withholding or threatening to withhold timely payment for an appraisal, or requesting the payment of compensation to achieve higher priority in the assignment of appraisal business.

Common Interest Developments

AB 313, Fletcher. Common interest developments: assessments. An act to add Section 1366.4 to the Civil Code.

Existing law, the Davis-Stirling Common Interest Development Act, (the “Davis-Stirling Act”) regulates common interest, developments and, authorizes the association that manages such a development to levy assessments to fulfill its obligations, and establishes limits on the percentage by which an association may increase regular and special assessments based on the amounts of those assessments in the preceding fiscal year. This act prohibits an association from levying assessments on separate interests within the common interest development based on the taxable value of the separate interests unless the association, on or before December 31, 2009, levied assessments on those separate interests based on their taxable value, as determined by the tax assessor. This act also provides an exception to the prohibition for an association that is responsible for paying taxes on the separate interests within the development, but only with respect to that portion of the assessments.

AB 899, Torres. Common interest developments: disclosures. Amends Sections 1350.7 and 1365.2.5 of, and adds Section 1363.005 to, the Civil Code.

The existing Davis-Stirling Act requires the association that manages such a development to provide specified disclosure documents to its members. Existing law allows the required disclosure documents to be delivered electronically. This act provides that an association that uses an electronic record to provide or make available the document satisfies the writing requirement. This act also requires an association to distribute annually to its members a specified Disclosure Documents Index that consolidates in one form the various disclosure document obligations of the association.

Existing law requires an association to distribute to its members an Assessment and Reserve Funding Disclosure Summary containing specified information regarding the association's assessments and reserves with a pro forma operating budget for each fiscal year. This act requires that Assessment and Reserve Funding Disclosure Summary to include a specified statement regarding the interest rate earned on reserve funds and the assumed inflation rate applied to major component repair and replacement costs.

AB 927, Charles Calderon. Common interest developments: construction defects. Amends Section 1375 of the Civil Code.

The existing Davis-Stirling Act requires, with respect to certain common interest developments, that specified requirements be satisfied before an association files a complaint for damages against the builder, developer, or general contractor of the development based upon a claim for defects in the design or construction of the development. Those requirements include filing a notice regarding the commencement of legal proceedings, participating in a dispute resolution process, and preparing a case management statement. This act extends the expiration date for these provisions from July 1, 2010 to July 1, 2017.

AB 1061, Lieu. Common interest developments: water-efficient landscapes. Repeals and adds Section 1353.8 of the Civil Code.

Existing law requires a local agency to adopt a specified updated model ordinance regarding water-efficient landscapes or a water-efficient landscape ordinance that is at least as effective in conserving water as the updated model ordinance. Existing law allows certain water providers to take specified actions regarding water conservation.

The existing Davis-Stirling Act provides that the architectural guidelines of a common interest development shall not prohibit or include conditions that have the effect of prohibiting the use of low water-using plants as a group. This act provides that any provision of the governing documents of a common interest development shall be void and unenforceable if it prohibits, or includes conditions that have the effect of prohibiting, the use of low water-using plants as a group, or if it has the effect of prohibiting or restricting compliance with a local water-efficient landscape ordinance or water conservation measure described above.

AB 1233, Silva. Nonprofit corporations. Amends Sections 5047, 5047.5, 5062, 5063.5, 5132, 5150, 5151, 5211, 5212, 5213, 5220, 5222, 5231, 6610, 7132, 7150, 7151, 7211, 7212, 7213, 7220, 7222, 7231, 8610, 9132, 9151, 9211, 9212, 9213, 9220, 9222, 9241, 9680, 9916, 12233, 12241, 12242.5, 12330, 12331, 12351, 12352, 12353, 12360, 12362, 12371, 12630, 12694, 18360, and 24001.5 of, to add Sections 5039.5 and 12228.5 to, adds Article 6 (commencing with Section 9260) to Chapter 2 of Part 4 of Division 2 of Title 1 of, the Corporations Code.

Existing law, the Nonprofit Corporation Law, regulates the organization and operation of certain nonprofit corporations. This act revises various provisions of the Corporations Code to provide more certainty to non-profit corporations including the owners' associations of common interest developments with respect to these operations. Included among these revisions are the following changes of significance to common interest developments.

Under existing law, the term “director” is defined as a natural person, designated in the articles or bylaws or elected by the incorporators, as well as natural persons designated, elected or appointed by any other name or title to act as members of the governing body of the corporation. This act clarifies that a person who does not have authority to act as a member of that governing body is not a director, but if the articles or bylaws provide that a natural person is a director or member of the governing body because he or she occupies a certain position, then that person is a director for all purposes.

Existing law authorizes the articles of incorporation and bylaws of nonprofit corporations to contain a provision requiring that an amendment or repeal of those articles or bylaws be approved in writing by a specified person or persons other than the board. Existing law also authorizes the articles or bylaws to provide for the designation or selection of directors by a specified person or persons rather than by election by a member or members and similarly to authorize a specified person or persons to remove a designated or selected director. This act specifies that these approval requirements and designation, selection, and removal rights are inapplicable or cease in those circumstances when the specified designator has died or ceased to exist, the office or status that created the right or entitlement has ceased to exist, or in certain cases, when the corporation has attempted and failed to obtain approval from the specified person or persons.

Under existing law, a majority of the number of directors authorized in the articles or bylaws constitutes a quorum for the transaction of business of a nonprofit corporation. Existing law does not expressly permit a requirement for the presence of specified directors. This act, subject to specified limitations, provides that the articles or bylaws may require the presence of one or more specified directors in order to constitute a quorum of the board to transact business.

Existing law authorizes a board of a nonprofit corporation to form one or more committees consisting of 2 or more directors to serve at the pleasure of the board, and provides that these committees have the authority of the board. This act prohibits a committee exercising the authority of the board from including, as members, persons who are not directors. It also authorizes the board to create other committees with non-directors that do not exercise the authority of the board.

Existing law requires a nonprofit corporation or consumer cooperative to have a chairman or a president or both, a secretary, a chief financial officer, and other officers as provided in the bylaws or determined by the board. This act requires such a corporation to have a chair or a president or both, a secretary, a treasurer or a chief financial officer or both, and other officers as provided in the bylaws or determined by the board. This act also specifies that if there is no chief financial officer, the treasurer is the chief financial officer.

Existing law authorizes a nonprofit corporation to elect to voluntarily wind up and dissolve by approval of a majority of the members or by approval of the board and approval of the members. This act authorizes such a corporation meeting certain requirements, including the lack of a quorum, to elect to voluntarily wind up and dissolve. The bill would also make technical changes to those provisions to conform to federal bankruptcy law.

Existing law prohibits a cause of action for monetary damage from arising against any director or officer of a nonprofit corporation who serves without compensation, on account of any specified negligent act or omission, if the nonprofit corporation has a general liability insurance policy in a specified amount that is in force both at the time of the injury and at the time the claim is made. This act instead prohibits those causes of action if these corporations or associations maintain a liability insurance policy that is applicable to the claim.

AB 1572, Committee on Elections and Redistricting: Voting. Among other things, amends Section 1363.03 of the Civil Code.

This act among other things makes a nonsubstantive change to the provision of the Davis-Stirling Act that governs election procedures for the association of a common interest development by substituting the term “vote by mail ballot” for the existing references to “absentee ballots.”

Construction

AB 457, Monning. Liens. Amends Sections 3084 and 3146 of the Civil Code.

Existing law gives workers the right to a mechanic's lien for the value of labor and materials provided for the improvement of real property and establishes procedures by which the lien can be recorded and enforced. Existing law defines a claim of lien in this regard, requiring it to contain specified information and provides that a lien claimant, after filing of the complaint to enforce the lien in the proper court, may record in the office of the county recorder where the property is located a notice of pending proceedings that provides constructive notice, from the time of the recording of the pendency of the action.

This act clarifies that the definition of a "claim of lien" is also the definition of "mechanic's lien" and adds the requirement that in addition to the recording of the mechanic's lien that the mechanic's lien and an additional Notice of Mechanic's Lien containing specified information regarding the legal effects of the lien also be served on the owner or reputed owner of the property, or on the construction lender or the original contractor if those parties cannot be served. This act further requires a proof of service affidavit be completed and signed by the person serving the Notice of Mechanic's Lien, and be included as part of the mechanic's lien or claim of lien. The act specifies that a failure to serve the mechanic's lien, including the Notice of Mechanic's Lien causes the mechanic's lien to be unenforceable as a matter of law.

This act also revises the permissive provisions regarding the recording of the complaint to enforce the lien to make them mandatory and also makes correctional, style, and conforming changes. This act becomes operative January 1, 2011.

SB 209, Corbett. Civil actions: disabled access. Amends Section 55.54 of the Civil Code.

Existing law as modified in 2008 provides for the licensing of certified access specialists (“CASp”) who are required to conduct all inspections relating to permits, plan checks and new construction of privately-owned buildings. Existing law also requires a court, with respect to an action involving a construction-related accessibility claim, to issue an order that, among other things, grants a 90-day stay of the proceedings with respect to that claim, schedules an early evaluation conference and directs the defendant to file with the court “under seal” and serve on the plaintiff a copy of any relevant CASp inspection report, which shall be subject to a protective court order, as specified, if the defendant has satisfied certain requirements relating to inspection of the site at issue.

This act, in order to make this process less cumbersome, makes the CASp inspection report confidential instead of “under seal” and allows disclosure only to the parties to the action, the parties' attorneys and others involved in the evaluation and settlement of the case. This act also requires the report to remain confidential until the conclusion of the claim, unless there is a showing of good cause by any party.

Environment

AB 210, Hayashi. Green building standards. Amends Sections 17958.5 and 18941.5 of the Health and Safety Code.

Existing law authorizes a city or county to make modifications in the requirements contained in the provisions published in the California Building Standards Code and other specified regulations, as may be reasonably necessary because of local climatic, geological, or topographical conditions. Existing law provides that amendments, additions, and deletions to the California Building Standards Code adopted by a city, or county pursuant to existing law, become effective 180 days after publication, or at a later date, as specified. This act specifies that the requirements and regulations that a city or county is authorized to change or modify include green building standards.

AB 474, Blumenfield. Contractual assessments: water efficiency improvements. Amends Section 1102.6b of the Civil Code, and amends Sections 5898.12, 5898.14, 5898.20, 5898.21, 5898.22, 5898.24, 5898.28, and 5898.30 of, and adds Section 5898.31 to, the Streets and Highways Code.

This act expands existing law to authorize the legislative body of any public agency to determine that it would be in the public interest to designate an area within which authorized city officials and free and willing property owners may enter into contractual assessments to finance the installation of water efficiency improvements that are permanently fixed to real property. This act also, with respect to all of its provisions, modifies its definitions and requires a legislative body to perform additional record keeping duties and provide specified notice to any entity that provides energy or water within the boundaries of the area within which contractual assessments may be entered into. This act also requires additional specified disclosures for a transfer of real property subject to a contractual assessment.

AB 758, Skinner. Energy: energy audit. Adds Section 25943 to the Public Resources Code, and adds Sections 381.2 and 385.2 to the Public Utilities Code.

Existing law requires the State Energy Resources Conservation and Development Commission (“Energy Commission”), in its biennial energy conservation report, to report on the progress made to implement a statewide home energy rating program. This act requires the Energy Commission, by March 1, 2010, to establish a regulatory proceeding to develop a comprehensive program to achieve greater energy savings in the state's existing residential and nonresidential buildings. In developing the requirements, the Energy Commission is required to coordinate with the Public Utilities Commission (“PUC”) and to consider certain factors. Before adopting the requirements, the Energy Commission is required to consult with specified entities and to hold at least 3 public hearings. The Energy Commission is required to periodically update, improve, or refine the program requirements. The Energy Commission is required to report on the status of the program in the integrated energy policy report.

Existing law requires the PUC to order certain electrical corporations to collect and spend certain funds for public benefit programs, including cost-effective energy efficiency and conservation programs. This act requires the PUC, by March 1, 2010, to open a new proceeding or amend an existing proceeding to investigate the ability of electrical corporations and gas corporations to provide energy efficiency financing options to their customers to implement the comprehensive program that would be developed by the Energy Commission pursuant to this act. This act also requires the PUC to include an assessment of each electrical corporation's and each gas corporation's implementation of that program in a specified triennial report required under existing law.

Existing law requires a local publicly owned electric utility to establish annual targets for energy efficiency savings and demand reduction for the next 10-year period and to provide to its customers and to the Energy Commission an annual report on its energy efficiency and demand reduction programs. This act requires a local publicly owned electric utility, upon the completion and promulgation of regulations by Energy Commission, to be responsible for implementing an energy efficiency program that recognizes the Legislature's intent to encourage energy savings and greenhouse gas emission reductions in existing residential and nonresidential buildings. A local publicly owned electric utility would be required to include in the above-referenced report its status in implementing the program.

AB 1085, Mendoza. State Air Resources Board: regulations. Adds Section 39601.5 to the Health and Safety Code.

This act requires the state board to make available to the public each technical, theoretical, and empirical study, report, or similar document, if any, on which the agency relies, related to, but not limited to, air emissions, public health impacts, and economic impacts, before the comment period for any regulation proposed for adoption by the state board.

AB 1404, De Leon. California Global Warming Solutions Act of 2006: offsets. Amends Section 38505 of, and adds Section 38573 to, the Health and Safety Code.

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board (“State Board”) as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The State Board is required to adopt a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020, and to adopt rules and regulations in an open public process to achieve the maximum technologically feasible and cost-effective greenhouse gas emission reductions. The act authorizes the State Board to adopt by regulation, after a public workshop, a schedule of fees to be paid by the sources of greenhouse gas emissions regulated pursuant to the act. The fee revenues are deposited into the Air Pollution Control Fund and are available, upon appropriation by the Legislature, for purposes of carrying out the act. The State Board is authorized to adopt market-based compliance mechanisms meeting specified requirements to be used for compliance with those regulations. The State Board is required, before including any market-based compliance mechanism, to maximize additional environmental and economic benefits for California.

This act defines "compliance offset" as a quantified reduction in emissions of greenhouse gases in a sector different from the sector or sectors regulated by a greenhouse gas emission limit for which a market-based compliance mechanism has been adopted by the State Board, that is used for compliance of that greenhouse gas emission limit by a greenhouse gas emission source regulated by that limit. The State Board shall approve compliance offsets only if those compliance offsets meet certain designated criteria.

This act also requires that the State Board shall establish incentives and guidelines that prioritize the use of compliance offsets. In addition, this act requires the State Board, if the State Board allows the use of market-based compliance mechanisms, to limit the use of compliance offsets to no more than 10% of the greenhouse gas emission reductions expected from market mechanisms during the compliance period. This act requires the State Board to apply the limit as a percentage of each regulated party's reported emissions in a compliance period.

This act requires the State Board to impose an administrative fee pursuant to the fee authority described above for deposit into the fund to pay for expenses related to State Board administration of the compliance offset program, upon appropriation by the Legislature.

SB 104, Oropeza. California Global Warming Solutions Act of 2006: nitrogen trifluoride. Amends Section 38505 of the Health and Safety Code.

The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act defines greenhouse gases to include carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.

This act expands the definition of greenhouse gases to include nitrogen trifluoride.

SB 143, Cedillo. Hazardous materials: California Land Reuse and Revitalization Act of 2004. Amends Sections 25395.91, 25395.109, and 25395.110 of the Health and Safety Code.

The California Land Reuse and Revitalization Act of 2004 provides that an innocent landowner, bona fide purchaser, or contiguous property owner qualifies for immunity from liability from certain state laws for pollution conditions caused by a release or threatened release of a hazardous material if specified conditions are met. The act prohibits an agency, defined as the Department of Toxic Substances Control, the State Water Resources Control Board, or a California regional water quality control board, from requiring one of those persons to take a response action under certain state laws. The act also requires a bona fide ground tenant who seeks to qualify for immunity to make all appropriate inquiries and enter into an agreement with an agency along with one or more specified entities that agree to take responsibility for implementation of a site assessment and response plan. The act was to be repealed on January 1, 2010.

This act extends the repeal date of the act to January 1, 2017. This act also makes the provisions providing for continued immunity after repeal of the act operative on January 1, 2017. The act also prohibits a prospective purchaser who enters into an agreement from receiving immunity until the prospective purchaser acquires the site.

SB 407, Padilla. Property transfers: plumbing fixtures replacement. Adds Section 1102.155 to, and adds Article 1.4 (commencing with Section 1101.1) to Chapter 2 of Title 4 of Part 4 of Division 2 of, the Civil Code.

Existing law authorizes public entities that supply water, by the adoption of an ordinance or resolution pursuant to specified procedures, to adopt and enforce a water conservation program. Existing law also requires certain disclosures to be made upon the transfer of real estate and that all water closets or urinals sold or installed in the state use no more than an average of 1.6 gallons or one gallon per flush, respectively.

This act establishes requirements for residential and commercial real property built and available for use on or before January 1, 1994, for replacing plumbing fixtures that are not water conserving, as defined as noncompliant plumbing fixtures. On and after January 1, 2014, the act requires, for all building alterations or improvements to single-family residential property, that water-conserving plumbing fixtures replace other noncompliant plumbing fixtures as a condition for issuance of a certificate of final completion and occupancy or final permit approval by the local building department. By creating a new duty to inspect for local officials, this act imposes a state-mandated local program. This act requires, on or before January 1, 2017, that all noncompliant plumbing fixtures in any single-family residential property be replaced by the property owner with water-conserving plumbing fixtures.

This act requires, on or before January 1, 2019, that all noncompliant plumbing fixtures in multifamily residential real property and commercial real property be replaced with water-conserving plumbing fixtures. This act requires, on and after January 1, 2014, for specified building alterations or improvements to multifamily residential real property and commercial real property, that water-conserving plumbing fixtures replace other noncompliant plumbing fixtures as a condition for issuance of a certificate of final completion and occupancy or final permit approval by the local building department.

However, registered historical sites, real property for which a licensed plumber certified that due to the age or configuration of the property or its plumbing, installation of water-conserving plumbing fixtures is not technically feasible, and a building for which water service is permanently disconnected, are exempt from these requirements.

This act requires, on and after January 1, 2017, that a seller or transferor of single-family residential, multifamily residential, or commercial real property disclose to a purchaser or transferee, in writing, specified requirements for replacing plumbing fixtures, and whether the real property includes noncompliant plumbing. This act permits an owner or the owner's agent to enter rental property for the purpose of installing, repairing, testing, and maintaining water-conserving plumbing fixtures. This act provides that the application of its requirements may be postponed up to one year, with respect to a building for which a demolition permit has been issued. This act permits a city or county or retail water supplier to enact a local ordinance or policy that promotes compliance with this act's provisions or that will result in greater water savings than otherwise provided by this act. This act provides that any city or county that has adopted an ordinance requiring retrofit of noncompliant plumbing fixtures prior to July 1, 2009, is exempt from its requirements so long as the ordinance remains in effect.

ACR 77, Swanson. California Global Warming Solutions Act of 2006: implementation.

This measure urges the State Air Resources Board to meet the statutory requirements of the California Global Warming Solutions Act of 2006 by ensuring that its analysis of the emission reduction measures as proposed in the scoping plan and related rulemaking includes the following:

(a) An analysis of the projected employment impacts of the proposed measures by sector in each of the years leading up to 2020 and beyond that specifies, in particular, the potential for green collar jobs to be located in California or outside California.

(b) Identification of the types of jobs that will be created in California, the industry sectors for which the jobs will be created, and the wage and benefit levels expected for those workers.

(c) Identification of the types of jobs that may be lost in California and the industry sectors in which the jobs may be lost.

(d) A plan for providing California workers a training program for new green technology jobs that are different from the traditional jobs in energy, transportation, and construction.

Escrow

SB 204, Benoit. Financial transactions: escrow agents: exchange facilitators. Amends Sections 17600, 51003, 51005, and 51007 of, and amends and repeals Section 17207 of, the Financial Code.

Existing law provides for the licensing and regulation of escrow agents by the Commissioner of Corporations and requires, until January 1, 2010, that each escrow agent pay an annual license fee of up to $2,800 for each office or location. In addition, existing law authorizes the Commissioner to levy a special assessment of up to $500, which is required to be paid by the escrow agent within 30 days of receipt of notification by the Commissioner, for each office or location in specified circumstances. After January 1, 2010, existing law provides that each escrow agent shall instead pay to the Commissioner the agent's pro rata share of the Commissioner's annual administrative costs and expenses.

This act repeals the provisions that would require an escrow agent, to pay the agent's pro rata share of the Commissioner's annual administrative costs and expenses and instead, continues the requirement for an escrow agent to pay an annual license fee of up to $2,800 for each office or location. This act also authorizes the cap on the special assessment that may be levied by the Commissioner to be increased to $1,000 for each office or location. This act also requires an escrow agent to pay the special assessment within 60 days of notification by the Commissioner.

Existing law further provides that the license of an escrow agent remains in effect until surrendered, revoked, or suspended and sets forth the specific procedure for the surrender of such license. Existing law requires a surrendering licensee to tender his or her license and all other indicia of licensure to the Commissioner, and submit a closing audit to the Commissioner. Existing law provides that a license is not surrendered until the Commissioner has reviewed and accepted the closing audit, made a determination that there is no violation of law, and, in writing, accepted tender of the license.

This act deletes the requirement that the Commissioner make a determination that there is no violation of law and instead requires a determination that acceptance of the surrender is in the public interest.

Existing law provides that a person engaging in business as an exchange facilitator is required to comply with certain bonding and insurance requirements that may include maintaining a fidelity bond or bond and a policy of errors and omissions insurance executed by specified eligible surplus line insurers authorized to do business in this state and authorizes a person to file a claim to recover damages on the bonds, applications, deposits, or letters of credit maintained by an exchange facilitator for a failure to comply with the provisions.

The act also requires claims for damages to be subject to the terms and conditions of the bonds, deposits, or letters of credit maintained by an exchange facilitator and provides that the amounts of those bonds, deposits, or letters of credit shall be reduced to the extent of any payment made.

Homestead

AB 1046, Anderson. Enforcement of judgments: exemptions: homesteads. Amends Sections 703.150 and 704.730 of the Code of Civil Procedure.

Existing law provides that a specified portion of equity in a homestead is exempt from execution to satisfy a judgment debt. Under existing law the base exemption is $50,000. If the judgment debtor or his or her spouse who resides in the homestead is, at the time of the sale, a member of a family unit, and one member of the family unit is without an interest, or with only a limited interest in the homestead, then the exemption is increased to $75,000. If the judgment debtor or the spouse of the judgment debtor who resides in the homestead is, at the time of the sale, 65 years of age or older, disabled, or 55 years of age or older with a limited income, the exemption is increased to $150,000.

Existing law also requires the Judicial Council to adjust specified exemptions from execution at 3-year intervals based on the change in the annual California Consumer Price Index for All Urban Consumers, and to publish a list of the current dollar amounts of those exemptions.

This act increases the homestead exemptions described above to $75,000, $100,000, and $175,000, respectively and requires the Judicial Council to determine on or before April 1, 2010 and at each 3-year interval ending on April 1 thereafter and submit to the Legislature the amount by which the dollar amounts of the exemptions applicable to that exempt property may be increased based on the change in the annual California Consumer Price Index for All Urban Consumers. This act provides that those increases shall not take effect unless they are approved by the Legislature. The act also requires the Judicial Council to publish a list of the current dollar amounts of those exemptions.

Landlord/Tenant

AB 530, Krekorian. Unlawful detainer: controlled substances and firearms. Amends and repeals Section 3485 of, and repeals and adds Section 3486 of, the Civil Code, amends Section 1161 of the Code of Civil Procedure, and repeals and adds Section 11571.1 of the Health and Safety Code.

Existing law establishes the criteria for determining when a tenant is guilty of unlawful detainer, including conduct involving illegally selling a controlled substance, or the commission of an offense involving the unlawful possession or use of illegal weapons or ammunition or the use of the premises to further that purpose. Any of those acts may be deemed to constitute committing a nuisance on the premises.

Existing law authorizes, in specified counties, only until January 1, 2010, a city prosecutor or city attorney to file an action for unlawful detainer in the name of the people against any person who is in violation of the nuisance or the illegal purpose provisions of the unlawful detainer provision described above, with respect to controlled substances or unlawful weapons or ammunition. Existing law requires the city prosecutor or city attorney to give 30 calendar days' written notice to the tenant. These provisions also impose specified reporting requirements regarding the implementation of these programs upon the city attorney and city prosecutor of each participating jurisdiction. The information compiled pursuant to these provisions is reported annually to the Judicial Council on or before January 30 of each year. The Judicial Council is required to report to the Legislature.

This act expands the scope of the latter provisions to apply in the City of Sacramento, revises the reporting requirements to require, among other changes, that the reports be made to the California Research Bureau, rather than the Judicial Council, and that the California Research Bureau report to the Legislature makes the provisions operative until January 1, 2014, and requires that the initial notice served upon tenants be provided to tenants in English, Spanish, Chinese, Tagalog, Vietnamese, and Korean. In the County of Los Angeles, however, in courts that have a specified jurisdiction, the provision authorizing an action for unlawful detainer with respect to a violation relating to controlled substances is operative indefinitely, except as specified. This act also requires the 2013 report to indicate whether the City of Los Angeles has regularly reported to the bureau. In the City of Los Angeles, certain provisions shall remain in effect indefinitely if the city has regularly reported to the bureau. This act also provides that the city would be deemed to have regularly reported if the 2013 report indicates that fact.

AB 531, Saldana. Energy consumption data: disclosure. Amends Section 25402.10 of the Public Resources Code.

Existing law requires an owner or operator of a nonresidential building, on and after January 1, 2010, to disclose the United States Environmental Protection Agency's ENERGY STAR Portfolio Manager benchmarking data and rating to a prospective buyer, lessee of the entire building, or lender that would finance the entire building. This act deletes the hard implementation date of January 1, 2010, and instead permits the California Energy Commission to develop a schedule by which an owner or operator is required to meet the requirements outline above.

SB 120, Lowenthal. Residential: utility service. Adds Section 1942.2 to the Civil Code, and amends Sections 777.1, 10009, 10009.1, 12822, 12822.1, 16481, and 16481.1 of, and amends, repeals, and adds Section 777 of, the Public Utilities Code.

Existing law provides that if an electrical, gas, heat, or water corporation furnishes service to residential occupants in a multiunit residential structure, mobilehome park, or permanent residential structures in a labor camp and the owner, manager, or operator is listed by the corporation as the customer of record, the supplier is required to make every good faith effort to inform the residential occupants, by means of a specified notice, that the account is in arrears, and service will be terminated at least 10 days prior to termination if the units are individually metered, or 15 days prior to termination if the property is master metered. Existing law also provides procedures by which those residential occupants may become customers of the corporation, one option being that if one or more of the residential occupants are willing and able to assume responsibility for the entire account to the satisfaction of the corporation, the electrical, gas, heat, or water corporation is required to make service available to the residential occupants. Similar provisions exist for a publicly owned utility that furnishes individually metered residential light, heat, water, or power to residential occupants in a multiunit residential structure, mobilehome park, or permanent residential structures in a labor camp if the owner, manager, or operator is listed by the public utility or district as the customer of record.

This act provides that the existing public utility termination notice provisions shall apply where a landlord-tenant relationship exists, and shall apply to residential occupants in a detached single-family dwelling. The act requires that the notice be in English, Spanish, Chinese, Tagalog, Vietnamese, and Korean. The act also revises the above-described option by which residential occupants may become customers of the corporation, to provide that if one or more of the residential occupants are willing and able to assume responsibility for the subsequent charges to the account to the satisfaction of the corporation, the electrical, gas, heat, or water corporation is required to make service available to the residential occupants. The act also enacts similar provisions for a publicly owned utility that furnishes individually metered residential light, heat, water, or power to a detached single-family residence or to residential occupants in a multiunit residential structure, mobilehome park, or permanent residential structure in a labor camp.

This act permits a tenant or occupant who has made a payment to a utility pursuant to Section 777, 777.1, 10009, 1009.1, 12822, 12822.1, 16481, or 16481.1 of the Public Utilities Code, and whose periodic payments, such as rental payments, include charges for residential electrical, gas, heat or water service, to deduct from the periodic payment all reasonable charges paid by tenant or occupant for those services.

SB 290, Leno. Tenancy: notices. Amends Section 1946.1 of the Civil Code.

Existing law, in effect until January 1, 2010, requires that an owner of a residential dwelling who is giving notice of termination to a tenant leasing real property for a term not specified by the parties give at least 60 days' notice prior to the termination; however, if the tenant or resident has resided in the dwelling for less than one year, the owner is only required to provide at least 30 days' notice prior to termination. This act deletes the January 1, 2010 repeal of the provisions described above, thereby making them operative indefinitely.

Land Use

AB 45, Blakeslee. Distributed generation: small wind energy. Adds and repeals Article 2.11 (commencing with Section 65893) of, and repeals the heading of Article 2.11 (commencing with Section 65892.13) of, Chapter 4 of Division 1 of Title 7, of the Government Code.

This act reenacts and revises lapsed authorization for a county to adopt an ordinance that provides for the installation of small wind energy systems outside an urbanized area, but within the county's jurisdiction, and establishes a process for the issuance of conditional use permits for these systems. This act also authorizes a county to impose conditions on the installation of these systems subject to specified limits.

AB 1165, Yamada. Flood protection. Amends Section 65007 of the Government Code, and amends Sections 8502, 8559, 8560, 8610.5, and 8709.4 of, adds Sections 8709.5, 8709.6, 8709.7, 12645, 12646, and 12647 to, adds the heading of Article 2 (commencing with Section 12645) to Chapter 2 of Part 6 of Division 6 of, repeals Sections 8562 and 8577 of, repeals the heading of Article 2 (commencing with Section 12648) of Chapter 2 of Part 6 of Division 6 of, and repeals and amends Sections 8522.3, 8522.5, 8523, and 8578 of, the Water Code.

In 2007 the Legislature passed a comprehensive package of flood management legislation. This act makes technical and clarifying amendments to that prior legislation. In particular this act (i) authorizes the Central Valley Flood Control Board (“Board”) to find a local flood management agency within the Sacramento-San Joaquin Valley is making “adequate progress” in working toward the completion of the flood protection system for any year in which state funding is not appropriated consistent with an agreement between the state agency and the local flood management agency which finding is a required condition for entering into a development agreement or approving entitlements and permits for residential construction on property located in a flood hazard zone; (ii) clarifies when issuance of a permit requires an evidentiary hearing by the Board; (iii) provides that a majority of the entire Board and not just those present are required for Board action; (iv) changes Board ex parte communications requirements; (v) authorizes the issuance of cease and desist orders by the Board and civil liability for a person or public agency that undertakes an encroachment or violates other specified requirements relating to encroachments; (vi) clarifies State liability for Central Valley flood control facilities and limits such liability for facilities that are not part of the State Plan of Flood Control, as defined; and (vii) makes other technical, non-substantive changes.

AB 1465, Hill. Urban water management planning. Amends Sections 10631 and 10633 of the Water Code.

Existing law, the Urban Water Management Planning Act, requires every urban water supplier to prepare and adopt an urban water management plan for submission to the Department of Water Resources and other entities. As part of the plan, an urban water supplier is required to provide information relating to the supplier's water demand management measures. Existing law allows urban water suppliers that are members of the California Urban Water Conservation Council and who submit annual reports to that council to satisfy this requirement by submitting those same reports to the Department. This act deems water suppliers that are members of the Council and comply with the “Memorandum of Understanding Regarding Urban Water Conservation in California,” dated December 10, 2008, as it may be amended, to be in compliance with the requirement to describe the supplier's water demand management measures in its urban water management plan.

SB 251, Committee on Transportation and Housing. Housing and community development: housing omnibus bill. Amends Sections 65584.05 and 66412 of the Government Code, amends Sections 18031.7, 18062.9, 33334.14, and 53545.9 of the Health and Safety Code, and amends Sections 3692.4, 12206, 17058, and 23610.5 of the Revenue and Taxation Code.

Existing law requires each city or county, to prepare and adopt a general plan for its jurisdiction that contains certain mandatory elements. One required part of the housing element is an assessment of housing needs that includes the locality's share of the regional housing need. That share is determined by the appropriate council of governments, subject to revision by the Department of Housing and Community Development. The council of governments is also required to issue a proposed final allocation plan and to hold a public hearing to adopt a final allocation plan. This act requires the council of governments to submit its final allocation plan to the Department within 3 days of adoption and specifies that the Department determine whether the plan is consistent with the existing and projected housing need for the region within 60 days from the date of its receipt of the final allocation plan adopted by the council of governments.

Existing law exempts from the requirements of the Subdivision Map Act specified types of property, including the conversion of a community apartment project, and the conversion of a stock cooperative, unless a parcel or final map was approved by the legislative body of a local agency, if specified requirements are met. This act modifies the requirements for an exemption relating to the conversion of a community apartment project and stock cooperative.

Existing law authorizes a manufactured home manufacturer to sell manufactured homes directly to a licensed California general building contractor when specified conditions are met. This act authorizes a manufactured home manufacturer to also sell manufactured homes directly to a nonprofit corporation that is also a Community Housing Development Organization subject to satisfaction of specified conditions. This act also corrects drafting errors relating to the strapping of water heaters in manufactured homes, corrects erroneous cross-references, and makes various other technical changes in existing law relating to housing.

SB 575, Steinberg. Local planning: housing element. Amends Sections 65080, 65583, and 65588 of the Government Code, and amends Section 75123 of the Public Resources Code.

Existing law, entitled by this act the Sustainable Communities and Climate Protection Act of 2008, requires metropolitan planning organizations to adopt a sustainable communities strategy as part of a regional transportation plan, which is to be designed to achieve certain targets established by the State Air Resources Board for the reduction of greenhouse gas emissions from automobiles and light trucks. Existing law requires the metropolitan planning organization to conduct at least two informational meetings in each county within the region for members of the board of supervisors and city councils on the sustainable communities strategy and alternative planning strategy, if any. Existing law provides that the purpose of the meetings is to present a draft of the sustainable communities strategy to the members of the board of supervisors and the city council members in that county and to solicit and consider their input and recommendations.

This act instead provides that the purpose of the meetings is to discuss the sustainable communities strategy and alternative planning strategy, if any, including the key land use and planning assumptions, with the members of the board of supervisors and the city council members in that county and to solicit and consider their input and recommendations. This act in particular requires the Tahoe Metropolitan Planning Organization to use the Regional Plan for the Lake Tahoe Region as its sustainable communities strategy, if specified requirements are met.

Existing planning and zoning law requires each local government to review its housing element as frequently as appropriate to evaluate specified considerations, and requires specified, different types of local governments to revise the housing elements of their general plans in accordance with specific schedules.

This act instead requires each local government to review its housing element as frequently as appropriate, but no less often than required by a specified schedule. This act modifies that schedule as it pertains to local governments within the regional jurisdiction of the San Diego Association of Governments to require those governments to adopt the fifth revision of the housing element no later than 18 months after adoption of the first regional transportation plan update to be adopted after September 30, 2010, and subjects those governments to specified requirements relating to subsequent revisions of the housing element. This act also specifies the schedule for all local governments to adopt subsequent revisions of the housing element after the fifth revision and requires the Department of Transportation to maintain and publish a current schedule of the estimated regional transportation plan adoption dates and a current schedule of the estimated and actual housing element due dates on its Internet Web site. This act also requires each council of governments to publish on its Internet Web site the estimated and actual housing element due dates, as published by the department, for the jurisdictions within its region, and to send notice of these dates to interested parties.

This act also provides that meetings of the Strategic Growth Council, which was established in 2008 under SB732, to among other things, develop grant guidelines and policies and approve grants to support the planning and development of sustainable communities, are subject to the Bagley-Keene Open Meeting Act, and that, for the purposes of this provision, “meeting” does not include a meeting at which council members are meeting as members of the Governor's cabinet.

SB 671, Runner. Agricultural land: valuation. Amends Section 51203 of the Government Code, relating to local government.

Existing law requires the county assessor to assess current fair market valuations to determine the cancellation fee for removing land from a Williamson Act contract, and permits the Department of Conservation or the landowner, if either believes that the current fair market valuations are inaccurate, to request formal review from the county assessor in the county considering the cancellation petition. As part of this process, existing law authorizes the assessor to recover his or her reasonable costs of the formal review from the party requesting the review.

This act authorizes the assessor to require a deposit from the landowner to cover the contingency that payment of a cancellation fee will not necessarily result from the completion of a formal review.

SB 833, Committee on Natural Resources and Water. Natural resources: mining: conservation lands: Native American historical sites: tidelands and submerged lands. Amends Sections 51177 and 51182 of the Government Code, amends Sections 2772.7, 4291, 5096.518, 5097.98, and 30716 of the Public Resources Code, amends Sections 7 and 12 of Chapter 543 of the Statutes of 2004, and amends Sections 1 and 15 of Chapter 660 of the Statutes of 2007.

This act is an omnibus bill that enacts the following technical clean up and clarification revisions to previous legislation.

Existing law requires that a person who owns, leases, controls, operates, or maintains an occupied dwelling or occupied structure in, upon, or adjoining a mountainous area, forest-covered land, brush-covered land, grass-covered land, or land that is covered with flammable material that is within a very high fire hazard severity zone, as designated by a local agency, or within a state responsibility area, shall maintain a defensible space of no greater than 100 feet from each side of the structure. This act clarifies that the required 100 feet of defensible space includes from the front and rear of the structure. This act also revises the definition of “fuel” for the purposes of fuels management.

Existing law, the Surface Mining and Reclamation Act of 1975, prohibits a person from conducting surface mining operations without obtaining a permit from the lead agency for those operations, and submitting and receiving approval for a reclamation plan and financial assurances from the lead agency. Existing law further requires a lead agency, upon approval of a reclamation plan or an amendment to a reclamation plan, to record a “Notice of Reclamation Plan Approval” with the county recorder. This act requires that notice to include the name of the owner of record of the mine operation, the name of the lead agency, and the acknowledged signature of the lead agency representative.

Under existing law, for a charitable contribution claimed by a seller on certain conservation lands acquired using state funds, the seller is required to attach to his or her personal income tax return a copy of an appraisal of the charitable contribution. This act clarifies that the required attached appraisal shall be the appraisal of the charitable contribution that was relied on by the acquisition agency.

Existing law establishes the Native American Heritage Commission and requires the Commission, once it receives notification of Native American human remains from a county coroner, to notify the most likely descendants, and the descendants, with permission of the landowner, may inspect the site and recommend appropriate dignified disposition of the human remains and grave goods. Existing law requires, when the commission is unable to identify descendants, the descendants fail to make a recommendation, or other specified circumstances occur, that the landowner reinter the human remains, and perform at least one of three activities to protect the site, including record a document with the county in which the property is located. This act requires that the document to be recorded be titled “Notice of Reinterment of Native American Remains” and include a legal description of the property, the name of the owner of the property, and the owner's acknowledged signature.

Mobile Homes

SB 23, Padilla. Manufactured housing: emergency preparedness plans. Amends Sections 18603 and 18871.8 of the Health and Safety Code.

Existing law, the Mobilehome Parks Act, requires the California Department of Housing and Community Development to enact and enforce rules and regulations to protect public health and safety in mobilehome parks. This Act authorizes park management to adopt an emergency preparedness plan that includes specified procedures and plans. A knowing violation of the Mobilehome Parks Acts is punishable as a misdemeanor offense.

The Special Occupancy and Parks Act requires the California Department of Housing and Community Development to adopt regulations to govern the use and occupancy of manufactured homes, mobilehomes, and recreational vehicles located in special occupancy parks. A knowing violation of the Act is punishable as a misdemeanor offense, and any person who willfully violates the Act is liable for a civil penalty.

This act amends both the Mobilehome Parks Act and the Special Occupancy and Parks Act to require an owner or operator of an existing park or a special occupancy park to adopt an emergency preparedness plan on or before September 1, 2010. This act requires an owner or operator of a park to post notice of the plan and to provide information relating to accessing individual emergency preparedness information. This act also requires parks with more than fifty (50) units to have a person residing on-site who is familiar with the emergency preparedness information. Lastly, this act provides that a violation of the emergency preparedness provisions of both the Mobilehome Parks Act and the Special Occupancy and Parks Act constitutes an unreasonable risk to life, health, or safety and requires correction by park management within sixty (60) days of notice of the violation.

SB 251, Committee on Transportation and Housing. Housing and community development: housing omnibus bill. Amends Sections 65584.05 and 66412 of the Government Code, Sections 18031.7, 18062.9, 33334.14, and 53545.9 of the Health and Safety Code, amends Sections 3692.4, 12206, 17058, and 23610.5 of the Revenue and Taxation Code.

Existing law permits a manufactured housing factory to sell manufactured homes directly to developers only if they are general contractors purchasing more than five homes in a calendar year and if the homes are delivered directly to a building site for foundation installation within a single subdivision of five or more parcels. The restriction to a single "subdivision" prevents non-profit corporations who have experience doing self-help housing and other housing in rural areas, but not necessarily in subdivisions, from realizing the cost savings associated with direct sales. Similarly, more urban non-profits seeking to do infill projects on four or fewer lots also cannot directly purchase and install homes.

This act, among other things, amends Section 18062.9 of the Health and Safety Code, to allow a non-profit community housing development organization to directly purchase five or more manufactured homes even if they are installed outside of a subdivision, provided the homes are installed as part of an affordable housing project funded by a public entity.

SB 398, Correa. Mobilehome parks: fire code enforcement. Amends Section 18691 of the Health and Safety Code.

Existing law requires that regulations adopted by the California Department of Housing and Community Development (“CDHCD”) governing conditions relating to the prevention of fire or for the protection of life and property against fire in mobilehome parks be applicable in all mobilehome parks, except in a mobilehome park within a city or county that is an enforcement agency and has adopted and is enforcing a fire prevention code imposing restrictions equal to, or greater than, the restrictions imposed by building standards published in the California Building Standards Code and the other state regulations adopted by the CDHCD. Existing law authorizes, notwithstanding these provisions, a city, county, or special district to enforce its fire prevention code in mobilehome parks relating to s pecified fire prevention code subject areas.

This act exempts from the CDHCD regulations, a mobilehome park within a special district or other entity that has been delegated fire code enforcement by the city or county that is the enforcement agency, and the special district or entity is enforcing a fire prevention code in accordance with the Mobilehome Parks Act. This act also makes specified additions to the subject areas in which a city, county, or special district that is not the enforcement agency may enforce its fire prevention code in mobilehome parks.

SB 804, Leno. Mobilehomes: sales and replacements. Amends Section 798.71 of the Civil Code.

Under the existing Mobilehome Residency Law, the mobilehome park management may not show or list for sale a manufactured home or mobilehome without first obtaining the owner's written authorization; however, the mobilehome park management may require a homeowner to advise the mobilehome park management in writing that his or her manufactured home or mobilehome is for sale. Existing law also provides that the mobilehome park management may not require the selling homeowner to authorize the mobilehome park management or any other specified broker, dealer, or person to act as the agent in the sale of a manufactured home or mobilehome as a condition of management's approval of the buyer or prospective homeowner for residency in the mobilehome park.

This act prohibits the mobilehome park management from requiring a homeowner, who is replacing a mobilehome or manufactured home on a space in the park, to use a specific broker, dealer, or other person as an agent in the purchase or installation of the replacement home.

Mortgages

AB 7, Lieu. Residential mortgage loans: foreclosure. Amends, repeals, and adds Section 2924 of, and adds and repeals Sections 2923.52, 2923.53, 2923.54, and 2923.55 of, the Civil Code.

Existing law requires that, upon a breach of the obligation of a mortgage or transfer of an interest in property, the trustee, mortgagee, or beneficiary record a notice of default in the office of the county recorder where the mortgaged or trust property is situated and mail the notice of default to the mortgagor or trustor. Existing law provides that, after not less than 3 months after the filing of the notice of default, the parties described above may give notice of sale, stating the time and place of the sale.

This act enacts the California Foreclosure Prevention Act which until January 1, 2011, prohibits a mortgagee, trustee, or other person authorized to make such sale from giving a notice of sale for an additional 90 days where the loan at issue was recorded between January 1, 2003, to January 1, 2008, is the first mortgage or deed of trust against the property that the borrower occupied as his or her principal residence at the time the loan became delinquent, and the notice of default has been filed. This act exempts certain loans from this prohibition, including, upon order of the Commissioner of Corporations, the Commissioner of Financial Institutions, or the Real Estate Commissioner, as applicable, the loans of a mortgage loan servicer, if the mortgage loan servicer applies to the applicable commissioner for an exemption indicating that it has implemented a loan modification program with specified features and the commissioner concludes that the program meets specified requirements. This act permits a mortgage loan servicer to submit a revised application if its application is denied, and permits the commissioner to revoke an exemption under certain circumstances. This act requires the commissioners to adopt regulations in this regard. This act requires the Secretary of Business, Transportation and Housing to report to the Legislature three months after the first exemption is granted regarding the details of the actions on exemption of loans serviced by a mortgage loan servicer under a loan modification program and to submit subsequent reports every six months thereafter. This act requires the Secretary to post specified information on the exemption program on the agency's Internet Web site.

This act also provides that a person who violates these provisions is deemed to have violated his or her license law, and further provides that the failure to comply with the provisions described above does not invalidate a sale that is otherwise valid under specified provisions. This act requires that a notice of sale include a declaration from the mortgage loan servicer regarding the issuance of a temporary or final order of exemption from the Commissioner pursuant to these provisions and the timeframe applicable to the notice of sale. (This act is the same as SB7.)

AB 260, Lieu. Lending. Amends Section 10177 of the Business and Professions Code adds Section 2923.1 to the Civil Code, and amends Section 50505 of, adds Sections 1242, 14961, and 22346 to, and adds Division 1.9 (commencing with Section 4995) to, the Financial Code.

Existing law provides for the licensure and regulation of real estate brokers and salespersons by the Real Estate Commissioner and authorizes the Commissioner to suspend or revoke the license of a real estate licensee or corporation, or to deny the issuance of a license to an applicant or corporation, for specified violations. This act extends the scope of the Commissioner's authorization to suspend or revoke those licenses, or to deny issuance of those licenses, to include violations of specified federal lending laws or regulations and the violations or failures to comply with specified provisions of state law relating to mortgages.

Existing law imposes certain limitations and prohibitions on specified licensees, including real estate brokers, commercial banks, credit unions, finance lenders, and residential mortgage lenders, with respect to the making of consumer loans. Among other things, existing law imposes certain limitations and prohibitions on the licensees with respect to the making of a “covered loan,” defined as a consumer loan in which the original principal balance of the loan does not exceed the most current conforming loan limit for a single-family first mortgage loan established by the Federal National Mortgage Association in the case of a mortgage or deed of trust, and as specified.

This act, following federal regulations, establishes a new category of state regulated loans called “higher priced mortgage loans,” which have the same meaning as set forth in Part 226.35 of Title 12 of the Code of Federal Regulations which defines such loans as a consumer credit transaction secured by the consumer's principal dwelling with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction as of the date the interest rate is set by 1.5 or more percentage points for loans secured by a first lien on a dwelling or by 3.5 or more percentage points for loans secured by a subordinate lien on a dwelling. This act limits prepayment penalties and prohibits provisions for negative amortization for such loans. This act also prohibits a licensed person from making false, deceptive, or misleading statements or representations in connection with higher-priced mortgage loans. This act also prohibits a mortgage broker who arranges higher-priced mortgage loans with prepayment penalties from receiving a compensation that exceeds certain specified amounts. This act further provides that a violation of the provisions regulating higher-priced mortgage loans by a licensed person is also a violation of the person's licensing law and that a violation of specified federal lending laws or regulations by those licensees is also a violation of the licensing law of the licensee. This act authorizes a licensing agency or the Attorney General to enforce the provisions regulating higher-priced mortgage loans and authorizes civil penalties in an amount up to $10,000 against a licensed person who willfully and knowingly violates the provisions regulating higher-priced mortgage loans, and nullifies prepayment penalties or yield spread premiums that violate these provisions.

The act also establishes specified duties for mortgage brokers performing mortgage brokerage services for higher-priced mortgage loans. In addition, this act provides that a mortgage broker providing mortgage brokerage services to a borrower is the fiduciary of the borrower, and any violation of the broker's fiduciary duties is a violation of the mortgage broker's licensing law and specified civil penalty and liability provisions. This act further provides that this fiduciary duty includes a requirement that the mortgage broker place the economic interest of the borrower ahead of his or her own economic interest.

The act's provisions apply to higher-priced mortgage loans originating on or after July 1, 2010.

AB 329, Feuer. Reverse mortgages. Amends Sections 1923.2 and 1923.5 of the Civil Code.

Existing law defines and regulates reverse mortgage loans and provides for a disclosure notice that a lender must provide an applicant, which informs the applicant that a reverse mortgage is a complex financial arrangement and advises the applicant to seek financial counseling before entering the agreement. Existing law prohibits a lender from referring a borrower to anyone for the purchase of an annuity and requires a lender to refer a prospective borrower to a housing counseling agency for counseling prior to accepting a final and complete application for a reverse mortgage or assessing any fees.

This act enacts the Reverse Mortgage Elder Protection Act of 2009 that prohibits a lender or any other person who participates in the origination of the mortgage from participating in, being associated with, or employing any party that participates in or is associated with any other financial or insurance activity except as specified. This act also prohibits a lender or any other person who participates in the origination of the mortgage from referring a prospective borrower to anyone for the purchase of other financial or insurance products, except as specified. The act requires the lender to provide the prospective borrower with a list of not fewer than 10 nonprofit counseling agencies in the state that have been approved by the United States Department of Housing and Urban Development for counseling, and requires a lender to provide a borrower with a checklist specifying issues the borrower should discuss with a reverse mortgage counselor or, if the borrower seeks counseling prior to requesting a reverse mortgage loan application, the act requires a mortgage counselor to provide the checklist. This act requires that the checklist be signed by the counselor, if the counseling is done in person, and the prospective borrower, with a copy provided to the borrower. This act prohibits approval of the loan application until the signed checklist is provided to the lender.

AB 957, Galgiani. Residential real estate transfers: title insurance: escrow companies. Adds and repeals Article 1.8 (commencing with Section 1103.20) of Chapter 2 of Title 4 of Part 4 of Division 2 of, the Civil Code.

Existing law generally regulates the transfer of real property, and imposes specified obligations on a seller of real property. Existing law authorizes a mortgagee or beneficiary under a deed of trust to sell property securing the mortgage or deed of trust at a foreclosure sale under certain circumstances. Existing federal law prohibits a seller of property that will be purchased with the assistance of a federally related mortgage loan from requiring the buyer to purchase title insurance from any particular company.

This act enacts the Buyer's Choice Act, which prohibits, until January 1, 2015, a mortgagee or beneficiary under a deed of trust who at a foreclosure sale acquired title to residential real property improved by four or fewer dwelling units from requiring, directly or indirectly, as a condition of selling the property, that the buyer purchase title insurance or escrow services in connection with the sale from a particular title insurer or escrow agent. This act does not prohibit a buyer from voluntarily agreeing to accept a title insurer or an escrow agent recommended by the seller, if written notice of the right to make an independent selection is first provided by the seller to the buyer. A seller who violates the provisions of this act will be liable to the buyer for an amount equal to three times all charges made for the title insurance or escrow services.

This act took effect immediately as an urgency statute.

AB 1160, Fong. Contracts: translation. Adds Section 1632.5 to the Civil Code.

Existing law requires a person in a trade or business who negotiates specified contracts or agreements primarily in the languages of Spanish, Chinese, Tagalog, Vietnamese, or Korean to deliver to the other party, prior to execution, a translation of the contract or agreement in the applicable foreign language, except as specified. Under existing law, failure to comply with these provisions entitles the aggrieved party to rescind the contract or agreement. Under existing law, these provisions apply to specified loans or extensions of credit subject to the Industrial Loan Law and the California Finance Lenders Law.

This act, in the alternative, requires a supervised financial organization that negotiates primarily in one of those languages in the course of entering into a contract or agreement for a loan or extension of credit secured by residential real property, to deliver, prior to the execution of the contract or agreement, and no later than three business days after receiving the written application, a specified form in that language summarizing the terms of the contract or agreement. This act provides that a supervised financial organization that complies with these provisions would be deemed to be in compliance with the translation requirement in existing law described above. This act also provides for specific monetary administrative penalties against specified licensed persons for violations of these provisions. The act requires the Department of Corporations and the Department of Financial Institutions to create a new form for these purposes and to make it available in each of the languages described above. This act becomes operative beginning on July 1, 2010, or 90 days after issuance of a form as provided, whichever occurs later.

The provisions of this act do not affect the obligations of a real estate broker, as specified.

SB 36, Calderon. Real estate, finance lender, and residential mortgage lender licenses: mortgage loan originators. Amends Sections 10100, 10140.6, 10150, 10151, 10235.5, and 10236.4 of, adds Article 2.1 (commencing with Section 10166.01) to Chapter 3 of Part 1 of Division 4 of, and repeals Section 10131.8 of, the Business and Professions Code, amends Sections 22100, 22101, 22101.5, 22102, 22103, 22104, 22106, 22107, 22108, 22109, 22112, 22151, 22152, 22153, 22154, 22155, 22156, 22157, 22159, 22168, 22169, 22170, 22171, 22700, 50002, 50003, 50120, 50121, 50122, 50123, 50124, 50125, 50126, 50128, 50129, 50130, 50200, 50201, 50202, 50204, 50205, 50206, 50208, 50302, 50307, 50310, 50317, 50318, 50320, 50325, 50333, 50401, 50700, and 50701 of, adds Sections 22012, 22013, 22014, 22105.1, 22105.2, 22105.3, 22105.4, 22109.1, 22109.2, 22109.3, 22109.4, 22109.5, 22109.6, 22172, 22347, 22755, 50002.5, 50003.5, 50003.6, 50209, 50307.2, and 50513 to, adds Chapter 3.5 (commencing with Section 50140) and Chapter 3.6 (commencing with Section 50150) to Division 20 of, and repeals Sections 50601, 50602, and 50705 of, the Financial Code, and adds Section 18034 to the Health and Safety Code.

Existing real estate law as administered by the Real Estate Commissioner governs the licensing and regulation of real estate licensees and imposes specified requirements on real estate brokers who solicit borrowers or lenders or negotiate loans or collect payments or perform services for borrowers or lenders relative to loans secured by real property. Other existing law also provides for the licensure and regulation of finance lenders and brokers and residential mortgage lenders and servicers by the Department of Corporations.

As part of the Housing and Economic Recovery Act 2008, the federal government enacted the Safe and Fair Enforcement of Mortgage Licensing Act (“SAFEACT”) which requires all states to license and register their mortgage loan originators, defined as an individual who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan for compensation or gain, through a nationwide organization called the Nationwide Mortgage Licensing System and Registry (“NMLSR”).

This act is intended to bring California into compliance with the provision of the SAFEACT. In particular, this act requires real estate licensees to obtain a real estate license endorsement from the Real Estate Commissioner in order to engage in the business of a mortgage loan originator. This act establishes penalties if a real estate licensee fails to obtain a license endorsement before conducting business as a mortgage loan originator and authorizes the Real Estate Commissioner to suspend or revoke a real estate license for a failure to pay these penalties. This act further requires applicants for a license endorsement as a mortgage loan originator to furnish specified background information to the NMLSR and establishes standards for issuance and renewal of a license endorsement to act as a mortgage loan originator, including satisfying specified educational requirements. This act requires these real estate licensees to annually submit business activities reports, and other reports that may be required, to the commissioner and authorizes the commissioner to examine the affairs of real estate brokers, including those that obtain license endorsement as a mortgage loan originator. This act requires the Real Estate Commissioner to report violations of the provisions regulating real estate brokers and mortgage loan originators to the NMLSR and requires recipients of a license endorsement as a mortgage loan originator to use or disclose a specified unique identifier provided by the NMLSR in loan applications, advertisements, and solicitations.

This act also requires the licensure and regulation of mortgage loan originators, as defined, under the California Finance Lenders Law and the California Residential Mortgage Lending Act. This act requires these mortgage loan originators to also be licensed and registered through the NMLSR and applicants for licensure as a mortgage loan originator to furnish specified background information to the NMLSR and requires applicants for licensure or license renewal to satisfy certain additional requirements, including educational requirements. This act requires finance lenders and brokers, and residential mortgage lenders and servicers, that employ a mortgage loan originator to maintain a minimum net worth of $250,000. This act authorizes the Corporations Commissioner to require finance lenders and brokers, and residential mortgage lenders and servicers, that employ a mortgage loan originator to submit reports of condition to the NMLSR. This act prescribes prohibited acts and authorizes various types of disciplinary action to be taken against mortgage loan originators and requires the Corporations Commission to report violations of these provisions to the NMLSR. This act authorizes the Corporations Commissioner to establish relationships or contracts with the NMLSR for the purposes of implementing these provisions of the act.

This act provides that persons are required to have a mortgage loan originator license (i) under the California Finance Lenders Law or the California Residential Mortgage Lending Act by July 1, 2010, and (ii) under the real estate law by December 1, 2010.

SB 94, Calderon. Mortgage loans. Amends Sections 10026, 10085, 10133.1, and 10177 of, adds Section 10147.6 to, and adds and repeals Sections 6106.3 and 10085.6 of, the Business and Professions Code, amends Section 2945.1 of, adds Section 2944.6 to, and adds and repeals Section 2944.7 of, the Civil Code, and amends Section 22161 of the Financial Code.

Existing real estate law provides for the regulation and licensure of real estate brokers and real estate salespersons by the Real Estate Commissioner. Existing California Finance Lenders Law provides for the regulation and licensure of finance lenders and brokers by the Commissioner of Corporations. The existing California Residential Mortgage Lending Act provides for the regulation and licensure of residential mortgage lenders and servicers by the Commissioner of Corporations. Existing banking law provides for the regulation of state commercial banks by the Commissioner of Financial Institutions and existing California Credit Union Law provides for the regulation of state credit unions by the Commissioner of Financial Institutions.

This act prohibits, until January 1, 2013, any person, including a real estate licensee, who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform residential mortgage loan modifications or other forms of mortgage loan forbearance, for a fee or other compensation paid by a borrower, from demanding or receiving any pre-performance compensation, as specified, requiring any security as collateral for final compensation, or taking a power of attorney from a borrower, and makes a violation of this prohibition a misdemeanor or subject to specified fines.

This act clarifies that these provisions do not apply to actions taken by a person who offers loan modification or other loan forbearance services for a loan owned or serviced by that person, including, but not limited to, collecting principal, interest, or other charges under the terms of a loan, before the loan is modified, including charges to establish a new payment schedule for a non-delinquent loan.

This act also requires any person, including a real estate licensee, who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform residential mortgage loan modifications or other forms of mortgage loan forbearance for a fee or other compensation paid by a borrower, to provide a specified 14-point bold type statement regarding loan modification fees. This act makes a violation of this requirement a misdemeanor or subject to specified fines. This act also provides that a real estate licensee who fails to comply with specified provisions related to mortgages, including the loan modification provisions, will be subject to disciplinary action by the Real Estate Commissioner, and further provides that a violation of the above by an attorney may also subject him or her to disciplinary action. This act adds to the California Finance Lenders Law a prohibition on making a materially false or misleading statement or representation to a borrower about the terms or conditions of that borrower's loan, when making or brokering a loan.

Under existing law the term “advance fee” is defined as a fee that is claimed, demanded, charged, received, collected, or contracted from a principal for a listing, advertisement, or offer to sell or lease property. This act redefines the term “advance fee” to mean a fee, regardless of the form, that is claimed, demanded, charged, received, or collected by a licensee from a principal before fully completing each and every service the licensee contracted to perform, or represented would be performed.

Existing law authorizes the Real Estate Commissioner to require that materials used in obtaining advance fee agreements be submitted to him or her at least ten calendar days before the materials are used and makes it a misdemeanor, punishable by a fine not exceeding $1,000, or imprisonment in the county jail not exceeding six months, or both, to use any agreement that the Real Estate Commissioner has ordered not to be used. This act increases the maximum fine from $1,000 to $2,500.

Existing law also provides that certain persons are exempt from regulation under certain provisions of the real estate law dealing with real estate loans and further exempts from those provisions specified organizations that have been approved by the United States Department of Housing and Urban Development to provide counseling services, when those services are provided at no cost and in connection with residential mortgage loan modifications.

Existing law defines a “foreclosure consultant” as a person who offers, for compensation, to perform specified services for a homeowner relating to a foreclosure sale, and imposes regulations upon foreclosure consultants when servicing a foreclosure sale. Existing law excludes specified persons from the definition of a foreclosure consultant, including a person licensed under the real estate law when making a direct loan or engaging in specified acts, and a person licensed to make loans as a finance lender, subject to the authority of the Commissioner of Corporations to terminate this exclusion. This act instead specifies that a real estate licensee and a finance lender are excluded from the definition of a foreclosure consultant when acting under the authority of their respective licenses, and deletes the Corporations Commissioner's authority to terminate the finance lender's exclusion.

This act took effect immediately as an urgency statute.

SB 239, Pavley. Mortgage fraud. Repeals and adds Section 532f of the Penal Code.

Existing law provides that a person, other than the loan applicant, who makes false financial statements in connection with an application for a loan to be secured by real property is guilty of a misdemeanor, punishable by a fine not exceeding $10,000, by imprisonment in a county jail not exceeding one year, or by both the fine and imprisonment; and by restitution to the victim.

This act deletes this provision and provides instead for the offense of “mortgage fraud,” as defined, and for a dedicated felony mortgage fraud statute, a violation of which would be a public offense punishable by imprisonment in the state prison or in a county jail for not more than one year. This act provides that mortgage fraud may only be prosecuted when the value of the alleged fraud meets the threshold for grand theft.

SB 291, Calderon. Insurance reserves. Amends Section 12640.05 of the Insurance Code.

Existing law requires a mortgage guaranty insurer to maintain a policyholders surplus at all times in an amount not less than that determined pursuant to specified provisions, and defines “face amount of an insured mortgage” for these purposes. Existing law requires a mortgage guaranty insurer to cease new business if the insurer does not have the amount of policyholders surplus required.

This act revises the definition of “face amount of an insured mortgage” to exclude the outstanding principal balance of any loan that is in default and for which the insurer has established a loss reserve. This act provides that if a mortgage guaranty insurer will not have the amount of policyholders surplus required, it shall cease transacting new business until its policyholders surplus is in compliance. This act requires that the insurer notify the Insurance Commissioner at least 60 days prior to the time the policyholders surplus is estimated to fall below the amount required. The insurer may at that time request a waiver of the requirements which the Insurance Commissioner will evaluate. If the Insurance Commissioner fails to issue an order in response to the waiver request within 60 days, the insurer may continue transacting new business in California until the Insurance Commissioner issues an order. The insurer bears the Insurance Commissioner's cost of retaining consultants reasonably necessary to evaluate the waiver request, and reimburse the Commissioner for the cost of a hearing held.

SB 306, Calderon. Real property transactions. Amends Sections 2923.5, 2923.6, 2924.8, and 2924f of, and amends, repeals, and adds Section 2943 of, the Civil Code, and amends Section 17312 of the Financial Code.

Existing law requires that, upon a breach of the obligation of a mortgage or transfer of an interest in property, the trustee, mortgagee, or beneficiary record a notice of default in the office of the county recorder where the mortgaged or trust property is situated and mail the notice of default to the mortgagor or trustor. Existing law, until January 1, 2013, prohibits a mortgagee, trustee, beneficiary, or authorized agent from filing a notice of default for an additional 30 days on loans made between January 1, 2003, to December 31, 2007, that secure residential real property, under certain

circumstances. This act provides that until January 1, 2013, these provisions apply to mortgages and deeds of trust recorded between January 1, 2003, to December 31, 2007, secured by owner-occupied residential real property containing no more than four dwelling units. The act also revises the declaration that is required to be filed in this connection with the notice of default.

Existing law states legislative findings and declarations with regard to the duty loan servicers have to maximize net present value under their pooling and servicing agreements, stating that their duty is owed to all parties in a loan pool, not to any particular parties, and that a servicer acts in the best interests of all parties if it agrees to or implements a loan modification or work out plan. This act extends the application of these findings and declarations to certain investors.

Existing law requires a trustee or authorized agent, upon posting a notice of sale, to post and mail a specified notice addressed to residents of property subject to foreclosure upon posting a notice of sale. Existing law also requires a notice of sale to be recorded in the county in which the property, or some part of it, is situated at least 14 days prior to the date of sale. This act specifies how and when this notice is to be mailed and extends the time during which the notice of sale must be recorded from 14 to 20 days.

Existing law requires a beneficiary on a deed of trust or a mortgagee on a mortgage to prepare and deliver a beneficiary statement or a pay-off demand statement within 21 days of receipt of a written demand from specified entitled parties. Existing law requires the written statement include information reasonably necessary to calculate the payoff amount on a per diem basis for the period of time, not to exceed 30 days, during which the per diem amount is not changed by the terms of the note.

This act until January 1, 2014, requires a beneficiary, within 21 days of the receipt of a short-pay request prepare and deliver a written short-pay demand statement, conditioned on the existence of a short-pay agreement, that is prepared in response to a request from an entitled person or authorized agent, setting forth an amount less than the outstanding debt, together with any terms and conditions, under which the beneficiary would execute and deliver a reconveyance of the deed of trust securing the note that is the subject of the short-pay demand statement. The act provides that the short-pay agreement is an agreement in writing in which the beneficiary agrees to release its lien on a property in return for payment of an amount less than the secured obligation. This act permits a beneficiary who elects not to proceed with the transaction that is the subject of the short-pay request to refuse to provide a short-pay demand statement, but does require that he or she provides a written statement, indicating that the beneficiary has elected not to proceed. This act provides that if the terms and conditions of the short-pay agreement require approval by the beneficiary of a closing statement prepared by an escrowholder, approval or disapproval shall be provided not more than 4 days after receipt by the beneficiary of the closing statement, or the closing statement shall be deemed approved, except as specified.

Existing escrow law provides for licensing and regulation of escrow agents, other than certain exempt persons, by the Commissioner of Corporations. The law requires licensees to apply for membership in the Escrow Agents' Fidelity Corporation, a nonprofit mutual benefit corporation, which is established to indemnify its members against loss of trust obligations. The law limits required membership in the Escrow Agents' Fidelity Corporation who engage in certain kinds of business. Existing law defines and regulates the activities of exchange facilitators and excepts from the definition of exchange facilitator escrow companies, under specified circumstances.

This act provides escrow transactions that involve money or property held or deposited pursuant to specified actions of an exchange facilitator regarding deposit of funds are not transactions that require a licensee to have membership in the Escrow Agents' Fidelity Corporation.

SB 633, Wright. Mortgages: impound accounts. Amends Section 2954 of the Civil Code.

Existing law provides that no impound, trust, or other type of account for payment of property taxes, insurance premiums, or other purposes relating to the property may be required as a condition of a real property sale contract or a loan secured by a deed of trust or mortgage on real property containing only a single-family, owner-occupied dwelling, except in specified circumstances.

This act adds to the list of exceptions, sales where a loan is made in compliance with the requirements for higher priced mortgage loans established in Regulation Z, as defined, regardless of whether or not the loan is a higher priced mortgage loan, and where a loan is refinanced or modified in connection with a lender's homeownership preservation program or a lender's participation in such a program sponsored by a federal, state, or local government authority or a nonprofit organization.

Property Taxes

AB 143, Jeffries. Property taxation: replicated tax payments: return. Adds Section 2781.5 to the Revenue and Taxation Code.

Existing property tax law requires a county to return a replicated tax payment to the tendering party within sixty (60) days following the receipt of the replicated tax payment. However, in cases of known adverse possession controversy, tax collectors have been instructed by the State of California Controller's Office to keep both payments so that the payers have equal standing on the tax issue.

To establish a mechanism for tax collectors to return replicated tax payments in the cases of adverse possession, this acts authorizes an owner of record to instruct a tax collector, by written request, to refund a replicated payment on a current assessment to the tendering party who is not an owner of record, if that tendering party is known at the time the request is made by the owner of record.

SB 816, Ducheny. Property taxation. Amends Sections 408, 480.1, 480.2, 482, and 483 of, and adds Section 11935 to, the Revenue and Taxation Code.

Existing property tax law requires assessors to disclose certain appraisal information to specified state and local agencies. This act expands the list of state and local agencies to which assessors are required to disclose certain appraisal information to include county recorders when they are conducting an investigation to determine whether a documentary transfer tax should be imposed.

Existing law requires a corporation, partnership, limited liability company, or other legal entity to file a change in ownership statement within forty-five (45) days from the date of the change in control or the change in ownership, or within forty-five (45) days from the date of a written request by the State Board of Equalization. Existing law requires a penalty to be imposed if the legal entity required to file a change in ownership statement fails to do so within forty-five (45) days from the date of a written request by the State Board of Equalization. Existing law requires this penalty to be automatically extinguished if the change in ownership statement is filed no later than sixty (60) days after the date on which the legal entity is notified of the penalty. Existing law also authorizes the State Board of Equalization to recommend to the county board of supervisors that this penalty be abated, if the legal entity establishes to the satisfaction of the State Board of Equalization that the failure to file the change in ownership statement within forty-five (45) days was due to reasonable cause and not due to willful neglect and the legal entity has filed the change in ownership statement and an application for abatement of the penalty with the State Board of Equalization.

This act requires a penalty be imposed if the legal entity required to file a change in ownership statement fails to do so within forty-five (45) days from the earlier of the date of the change in control or the change in ownership, or the date of a written request by the State Board of Equalization. This act also eliminates the requirement to extinguish this penalty and, instead, authorizes the county board of supervisors to order that this penalty be abated, if the legal entity establishes to the satisfaction of the county board of supervisors that the failure to file the change in ownership statement within forty-five (45) days was due to reasonable cause and not due to willful neglect and the person or legal entity has filed the change in ownership statement with the State Board of Equalization and an application for abatement of the penalty with the county board of supervisors, as provided.

The Documentary Transfer Act authorizes the board of supervisors of a county or city and county to impose a tax upon specified instruments that transfer specified interests in real property. This act authorizes any ordinance imposing such a documentary transfer tax to include an administrative appeal process for resolution of disputes relating to the imposition of the tax. This act prohibits the value of the property established for purposes of determining the amount of documentary transfer tax due from being binding on the determination of the value of that property for property tax purposes.

SB 822, Committee on Revenue and Taxation. Property taxation: local administration. Amends Sections 72, 155.20, 441.5, and 2823, and adds Section 205.6 to, the Revenue and Taxation Code.

Existing law requires an assessee or his or her designee to file with the city or county, a scale copy of the floor plans and exterior dimensions of a building with the county assessor at the time the assessee files, or causes to be filed, an approved set of building plans. This act authorizes the county assessor to require the floor plans to be provided to the assessor in an electronic format, if available.

Existing property tax law authorizes each county board of supervisors to exempt from property taxation those properties having a full value too low to justify the costs of assessment and collection, and limits any exemption granted by each county board of supervisors to property with a value not exceeding $5,000. This act increases the limit for this exemption from $5,000 to $10,000.

The California Constitution authorizes the exemption from property taxation of the principal residence of a disabled veteran, or a veteran's spouse, in the case in which a person has, as a result of a service-connected disease or injury, become disabled or died while on active duty in military service. Existing property tax law requires the State Board of Equalization to prescribe all procedures and forms required to carry into effect any property tax exemption. This act authorizes county assessors to supply specified information from disabled veterans' property tax exemption claims and county records at the written request of the State Board of Equalization, in order to prevent duplications of the disabled veterans' property tax exemption within the state and improper overlapping with other benefits provided by law.

Existing law requires taxpayers that meet certain criteria to file a signed personal property statement with the county assessor. Existing law authorizes a taxpayer, in lieu of completing the personal property statement as printed by the assessor, to furnish the information required as attachments to the personal property statement, provided that one copy of the personal property statement is signed by the taxpayer and contains an appropriate reference to the data attached, or the personal property statement is filed electronically and authenticated. This act authorizes a taxpayer to complete a personal property statement that is substantially similar to the personal property statement as printed by the assessor in lieu of completing the personal property statement as printed by the assessor, and authorizes the assessor to consider the information provided by the taxpayer, in lieu of completing the personal property statement as printed by the assessor, as the property statement.

Existing law prohibits a county assessor from making a separate valuation of any parcel covered by a subdivision map filed for record after the lien date immediately preceding the current fiscal year. This act provides that this prohibition does not apply in any county in which the board of supervisors provides for a separate valuation pursuant to an ordinance adopted by a majority vote of the board of supervisors.

SB 823, Committee on Revenue and Taxation. Property taxation. Amends Sections 2512, 2781, 2782, 3731, 3791.4, and 3793.1 of, and amends and renumbers Section 4839.2 of, the Revenue and Taxation Code.

Existing property tax law provides that a remittance to a taxing agency is deemed to be received, if made by an electronic payment on the date the transaction was completed by the taxpayer. This act requires this remittance to be made, in order to be deemed received on the date the transaction was completed by the taxpayer, on the taxing agency's authorized website or via the taxing agency's authorized telephone number.

Existing law requires a county to return a replicated tax payment to the tendering party within sixty (60) days following the receipt of the replicated payment. If that replicated payment is not returned to the tendering party within sixty (60) days following the receipt of the replicated payment, the county is required to pay interest at a specified rate, for the period beginning sixty (60) days after the county receives the replicated payment to the date the replicated payment is returned to the tendering party. This act requires a county to return a replicated payment to the tendering party within sixty (60) days of the date the payment becomes final. This act also requires the interest to be computed for the period beginning sixty (60) days after the replicated payment becomes final to the date the replicated payment is returned to the tendering party.

Existing law authorizes the board of supervisors, when it is determined that a tax deed to a purchaser of property sold by the tax collector should not have been sold, to rescind the sale with the written consent of the county legal adviser and the purchaser of the property. This act authorizes the successor-in-interest of the purchaser of the property to provide written consent to rescind the sale of the property. This act also authorizes the board of supervisors, if the written consent of the purchaser of the property or a successor-in-interest is not obtained, to rescind the sale of the property, if a hearing is scheduled before the board of supervisors and a notice containing specified information is sent to the purchaser of the property or a successor-in-interest. This act further provides that the purchaser or a successor-in-interest is entitled to a refund of the amount paid as the purchase price plus interest at the county pool apportioned rate after rescission of the tax deed is recorded.

Existing property tax law authorizes a non-profit organization, with the approval or permission of either the board of supervisors or that board's designee, to purchase certain property that has been tax defaulted and to purchase the property by way of installment payments. Existing law authorizes the tax collector, with the approval of either the board of supervisors or that board's designee, to offer certain property for sale at a minimum price that the tax collector deems appropriate. This act eliminates the board designee's authorization to approve the purchase of tax-defaulted property by a non-profit organization, or to permit the purchase of the property by way of installment payments. This act also eliminates the board designee's authorization to approve the tax collector's sale of certain property at a minimum price that the tax collector deems appropriate.

SB 824, Committee on Revenue and Taxation. Taxation. Amends Sections 15609 and 15641 of the Government Code, and amends Sections 69, 69.3, 214.6, 276, 480.3, and 480.4 of the Revenue and Taxation Code.

Existing property tax law provides, pursuant to a requirement of the California Constitution, that the property tax base year value of real property that is substantially damaged or destroyed by a disaster, as declared by the Governor, may be transferred to a comparable property located within the same county that is acquired or newly constructed within five (5) years after the disaster as a replacement property. Existing law provides that a property is substantially damaged or destroyed if it sustains physical damage amounting to more than fifty percent (50%) of its full cash value immediately prior to the disaster. This act provides that property is substantially damaged or destroyed if either the land or improvements sustain the specified amount of damage.

Existing property tax law, pursuant to the authorization of the California Constitution, authorizes counties to adopt an ordinance allowing the transfer of the property tax base year value of property in another county in the state that has been substantially damaged or destroyed by a disaster, as provided, to comparable replacement property, of equal or lesser value, that is located in the adopting county and is acquired or newly constructed within five (5) years of the damage to, or destruction of, the original property. Existing law provides that a property is substantially damaged or destroyed if it sustains physical damage amounting to more than fifty percent (50%) of its full cash value immediately prior to the disaster. This act provides that property is substantially damaged or destroyed if either the land or improvements sustain the specified amount of damage.

Existing property tax law provides for various exemptions from taxation, including an exemption for property owned and operated by various entities in accordance with the welfare exemption. Existing law provides that property that is leased to a community college, state college, or state university for educational purposes falls within the welfare exemption. Existing law also provides for various filing procedures and requirements when an organization or church claims the welfare exemption. This act updates the eligible lessees to include public schools and the University of California to conform with current law. This act also revises the filing procedures and requirements for an organization or church claiming a welfare exemption.

Existing property tax law requires each county assessor and county recorder to make available a form known as a preliminary change in ownership report. Existing law specifies the contents of this form, but authorizes the State Board of Equalization to revise the form. This act deletes the specified contents of this form and would instead require the State Board of Equalization, after consultation with the California Assessors' Association and interested parties, to prescribe the contents of the form. This act also requires that this form contain information that includes, but is not limited to, a description of the property, the parties to the transaction, the date of acquisition, the amount, if any, of the consideration paid for the property, whether paid in money or otherwise, and the terms of the transaction.

Subdivision

AB 333, Fuentes. Land use: subdivision maps: expiration dates. Amends Section 65961 of, and adds Section 66452.22 to, the Government Code.

Existing law, the Subdivision Map Act, establishes a statewide regulatory framework for controlling the subdividing of land. It generally requires a subdivider to submit, and have approved by the city or county in which the land is situated, a tentative or vesting tentative map, which confers a vested right to proceed with development in substantial compliance with specified ordinances, policies, and standards. The Subdivision Map Act provides for the expiration of tentative or vesting tentative maps, after specified periods of time. Prior legislation in 2008 specifically extended by 12 months the expiration date of any tentative or vesting tentative map or parcel map for which a tentative or vesting tentative map that had been approved that would not expire before January 1, 2011.

This act which took effect on July 15, 2009 extends the applicable expiration date to 24 months, as specified, for any previously approved tentative or vesting tentative subdivision map or parcel map that had not expired as of that date, and that would otherwise expire before January 1, 2012. Any legislative, administrative, or other approval by any local agency, state agency, or other political subdivision of the state that pertains to a development project included in a map that is extended is to be extended by 24 months under specified conditions. This extension is in addition to any other extension of the expiration date provided for in specified provisions of the Subdivision Map Act.

This act also reduces from five years to three years the period of time after the approval of a tentative map or recordation of a parcel map during which a city or county is prohibited, with exceptions, from imposing conditions on the issuance of a building permit for single- or multiple-family residential units for conformance with or the performance of any conditions that the city and/or county could have lawfully imposed as a condition to the previously approved tentative or parcel map for the subdivision, and provides that the prohibition does not prohibit the levying of a fee or the imposition of a condition that requires the payment of a fee upon, or after the issuance of a building permit.

AB 1084, Adams. Local planning: development projects: fees. Amends Sections 65961, 66023, and 66452.22 of, and adds Section 66019 to, the Government Code.

This act recast the provisions enacted under AB 333 (see above) within the Government Code with the added revision that for purposes only of a tentative subdivision map or parcel map that is extended by 24 months pursuant to that law, a city and/or county is not prohibited from levying a fee or imposing a condition that requires the payment of a fee, including an adopted fee that is not included within an applicable zoning ordinance, upon the issuance of a building permit.

This act additionally makes specified revisions with respect to the provisions of the existing Mitigation Fee Act that regulates the adoption, levy, collection and challenge to development fees imposed by local public agencies. Among other things this existing law requires a local agency hold a public hearing, at which oral or written presentations can be made, as part of a regularly scheduled meeting prior to adopting an ordinance, resolution, or other legislative enactment adopting a specified type of new fee or approving an increase in a specified type of existing fee. This act adds requirements regarding the timing and content of notices to be provided with respect to such meetings, provides for alternative electronic mail notification, and authorizes the legislative body of the city and/or county to establish a reasonable annual charge for sending such notices.

This act also requires that any new or increased fee adopted by a city and/or county shall be effective no earlier than sixty days following the final action on the adoption or increase of the fee, unless the city and/or county follows specified procedures.

The existing Mitigation Fee Act also authorizes any person to request an audit to determine whether any fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of any product or service provided by the local agency. If a person makes that request, the legislative body of the local agency is authorized to retain an independent auditor to conduct an audit to determine whether the fee or charge is reasonable. The local agency is authorized to recover the cost of having the audit conducted by an independent auditor from the person who requests the audit.

This act additionally authorizes any person to request an audit to determine whether any fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of any public facility provided by the local agency. This act limits the requirement that the local agency retain an independent auditor to circumstances where the person requesting the audit deposits with the local agency the amount of the agency's reasonable estimation of the cost of the audit. Finally this act requires that the local agency adjust the amount of any fee or charge to the extent it determines that the fee or charge does not meet specified requirements.

AB 1441, Committee on Agriculture. Agricultural land: Williamson Act: lot lines. Amends Section 51257 of the Government Code.

Existing law, the Williamson Act, conserves agricultural land under a three-part arrangement that involves voluntary contracts between owners and local governments that restrict land uses, reduced property tax assessments and state subventions to make up for the lost local revenues. Land subject to a Williamson Act contract can't be subdivided into parcels that are too small to sustain their agricultural use. Pursuant to prior legislation, the Williamson Act was amended to authorize a city or county and a landowner to agree to rescind a contract or contracts and simultaneously enter into a new contract or contracts to facilitate lot line adjustments which are exempted from the requirements of the Subdivision Map Act. This authorization was automatically terminated as of January 1, 2010. This act temporarily extends this authorization until January 1, 2011 to accommodate the delay in the release of the State Department of Conservation's review of the status of the Williamson Act.

SB 113, Committee on Local Government. Local Government Omnibus Act of 2009. Among other things, amends Sections 66412, 66434, 66439, 66445, and 66447 of the Government Code.

Existing law, the Subdivision Map Act, establishes standards and procedures for subdivision of land in California and prohibits the selling, leasing, or financing of any parcel of real property without compliance with specified requirements for map review, approval, and recordation. Existing law exempts certain lot line adjustments from these requirements, if the lot line adjustment is between four or fewer existing adjoining parcels, the land taken from one parcel is added to an adjoining parcel, and a greater number of parcels than originally existed is not thereby created, if the lot line adjustment is approved by the local agency or advisory agency.

This act adds the requirement that a local agency or advisory agency take action to approve or disapprove a lot line adjustment pursuant to the Permit Streamlining Act (Government Code Section 65920 et seq.) under which the governmental agency must approve or disapprove an application within specified time limitations or be subject to automatic approval provisions.

This act also adds to the list of exemptions from compliance the leasing of, or the granting of an easement to, a parcel of land or any portion or portions of the land in conjunction with a biogas project that in part utilizes agricultural waste or byproducts from the subject land and reduces overall emissions of greenhouse gases from agricultural operations on the land as further specified.

The existing Subdivision Map Act requires that final maps and parcel maps conform to all specified provisions, including that the exterior boundary of the land included within the subdivision be indicated by distinctive symbols and clearly so designated. This act requires that the exterior boundary of the land included within the subdivision not include a parcel that has been designated as a remainder of the subdivision or has been omitted from the subdivision and requires the designated remainder or omitted parcel to be labeled as a designated remainder parcel or omitted parcel.

The existing Subdivision Map Act requires that dedications of, or offers to dedicate interests in, real property for specified public purposes be made by a statement on the final map, signed and acknowledged by those parties having any record title interest in the real property being subdivided. This act requires, if a subdivider is required under the Subdivision Map Act or any other provision of law to make a dedication for specified public purposes on a final map, that the local agency specify whether the dedication is to be in fee for public purposes or an easement for public purposes. This act also requires the subdivider to include certain language in the dedication clause on the final map or any separate instrument with respect to the fee or easement as specified.

Conclusion

A more comprehensive list of all of the legislation tracked each year by the Legislation Committee of the State Bar Real Property Law Section may be found at the Section's web site at http://calbar.ca.gov/rpsection . From there, you can link to some additional sites for keeping up with legislation, including the California Legislative Counsel's Official California Legislative Information at http://www.leginfo.ca.gov.

* Robert M. McCormick is a partner at Downey Brand LLP and a member of the Real Estate Practice Management Group. He is also the current Chairman of the Commercial Leasing Subsection (north) of the Real Property Law Section of the State Bar of California. His practice is focused on commercial real estate transactions, including office and retail leasing, acquisitions, real estate secured financing and the formation of common interest developments.

* Matthew W. Ellis is counsel at Downey Brand LLP and a member of the Real Estate Practice Management Group and assisted in the preparation of this article. His practice is focused on commercial real estate transactions.

* Danielle R. Moyer is an associate attorney at Downey Brand LLP and a member of the Real Estate Practice Management Group and assisted in the preparation of this article. Her practice is focused on commercial real estate transactions.

Reprinted and/or posted with the permission of the CEB Real Property Journal. (2010).