Law:Division 10. The Improvement Bond Act Of 1915 (California)

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Contents

Part 1. General Provisions

Ca Codes (shc:8500-8514) Streets And Highways Code Section 8500-8514



8500. This division may be cited as the Improvement Bond Act of 1915.

8501. Unless the particular provision or the context otherwise requires, the definitions and general provisions contained in this part shall govern the construction of this division.


8502. This division provides an alternative system for the issuance of bonds to represent and be secured by the assessments made to pay the costs and expenses of the work or improvements referred to in this division and the provisions of this division shall not apply to or affect any other provisions of this code. When any proceedings for the issuance of bonds are commenced under this division, the provisions of this division and no other shall apply to such proceedings.


8502.5. "Assessed" and "assessment" mean assessments made pursuant to subdivisions (d) and (e) of Section 10204, or other law pursuant to which the assessment was levied, as corrected and modified by the legislative body. "Assessed" and "assessment" do not include assessments to pay administrative costs made pursuant to subdivision (f) of Section 10204.


8503. "City" includes counties, cities and counties and public corporations, districts and agencies.


8504. "Legislative body" means: (a) When used with reference to a county, the board of supervisors. (b) When used with reference to a city, the body which by law constitutes the legislative department of the government of the city.


8505. "Clerk" means: (a) When used with reference to a county, the person or officer who is or acts as the clerk of the legislative body of the county. (b) When used with reference to a city, the person who is or acts as clerk of the legislative body of the city.


8506. "Treasurer" means: (a) When used with reference to a county, the county treasurer. (b) When used with reference to a city, the city treasurer.


8507. As used with reference to a county, "street superintendent" or "superintendent of streets" means the county surveyor, or such other competent county officer as may be appointed by the legislative body of the county to perform the duties imposed on the street superintendent.


8508. As used with reference to a county, "engineer" means the county surveyor, or such other competent county officer as may be appointed by the legislative body of the county to perform the duties imposed on the engineer.

8509. "Auditor" means: (a) When used with reference to a county, the county auditor. (b) When used with reference to a city, any person who is charged with the duty of extending taxes upon the assessment rolls and lists.


8510. "Tax collector" means: (a) When used with reference to a county, the county tax collector. (b) When used with reference to a city, the person who is charged with the duty of collecting taxes, advertising delinquent lists of unpaid taxes, selling lands thereunder and executing certificates of sale and deeds thereon.


8511. The provisions of this division relative to the time or place of performance of official duty or relative to the form of any resolution, notice, order, list, certificate of sale, deed or other instrument, are directory only.

8514. Notwithstanding any other provision of this division, income realized from the investment of money on deposit in a fund or account established pursuant to this division may be used, at the option of the legislative body, to pay all or any portion of any amount required to be rebated to the United States in order that interest on obligations issued pursuant to this division be excluded from gross income for purposes of federal income taxation.


Part 2. Notice

Chapter 1. Notice By Publication

Ca Codes (shc:8530-8532) Streets And Highways Code Section 8530-8532



8530. Whenever in this division a notice, resolution, order or other matter is required to be published and the manner of such publication is not specified, it shall be published in a daily, semiweekly, or weekly newspaper published and circulated in the city conducting the proceedings and which is selected by the legislative body for that purpose, or by the clerk or other officer issuing the notice or responsible for the publication where the legislative body has not selected any newspaper for that purpose.


8531. Whenever in this division, a notice, resolution, order or other matter is required to be published and the time for such publication is not specified, it shall be published in two entire issues of the newspaper, one being on one day and the other issue being on a subsequent day of the same or a subsequent week.


8532. If there is no newspaper published in the city any notices required to be published under any provision of this division may in lieu of publication, be given by posting in three public places in the city for at least 10 days. The first posting shall be made not later than the date specified for the first publication of the notice.


Chapter 2. Notice By Posting

Ca Codes (shc:8550) Streets And Highways Code Section 8550



8550. Whenever in this division a notice, resolution, order or other matter is required to be posted and the time or method for such posting is not specified, the clerk shall conspicuously post the notice, resolution, order or other matter on the door of the legislative body's regular meeting place for not less than five days.



Part 3. Determination To Issue Bonds

Ca Codes (shc:8570-8573) Streets And Highways Code Section 8570-8573



8570. The legislative body of any city may determine that serial bonds, term bonds, or both, shall be issued as provided in this division to represent and be secured by assessments to pay the cost of any work or improvement in any of the streets, avenues, lanes, alleys, courts, places, or public ways of the city, or in, over, or through any property or rights-of-way owned by the city authorized by the Improvement Act of 1911 (Division 7 (commencing with Section 5000)), or by the Municipal Improvement Act of 1913 (Division 12 (commencing with Section 10000)), or to pay the cost of any other work or improvement charged and assessed upon real property pursuant to any other law. The legislative body may not issue bonds secured by assessments levied pursuant to subdivision (b) of Section 10312 to pay administrative costs.


8571. If the legislative body determines that bonds shall be issued as provided in this division to represent the expense of any proposed work or improvement, it shall, in the resolution of intention to do the work, do all of the following: (a) Declare that bonds shall be issued pursuant to Division 10 (commencing with Section 8500) to represent the expenses of the proposed work or improvement. (b) Specify the rate or maximum rate of interest which the bonds shall bear. (c) State the determination of the city pursuant to Section 8769.


8571.3. (a) The legislative body may determine that bonds issued pursuant to this division shall not be subject to refunding pursuant to the procedures of Division 11 (commencing with Section 9000) or Division 11.5 (commencing with Section 9500) until a date specified in the format of the bond pursuant to Section 8652. This date shall not be more than ten years after the issuance date of the bond. (b) This determination shall not apply to, or in any manner limit, advancement of the maturity of any bond or bonds pursuant to the procedures of Part 8 (commencing with Section 8680), Part 9 (commencing with Section 8700), Part 11 (commencing with Section 8750), or Part 11.1 (commencing with Section 8760). (c) This determination shall not apply to, or in any manner limit, the redemption and payment of any bonds pursuant to subsequent assessment proceedings which provide for the payment in full of all amounts necessary to eliminate any fixed special assessment liens previously imposed upon any assessment parcel included in the new assessment district.


8571.5. The legislative body may determine that bonds issued pursuant to this division may be refunded under specified conditions. If the legislative body so determines, it shall, in the resolution of intention to do the work, include all of the following: (a) A declaration that bonds proposed in the resolution may be refunded. (b) The specific conditions under which the bonds may be refunded, including a maximum interest rate and maximum number of years to maturity of the refunding bonds. (c) A statement that any adjustment to assessments resulting from the refunding will be done on a pro rata basis. The refunding shall be accomplished pursuant to Division 11.5 (commencing with Section 9500), except that, if, following the filing of the report specified in Section 9523 and any subsequent modifications of the report, the legislative body finds that each of the conditions specified in the resolution of intention is satisfied and that the adjustments to assessments are on a pro rata basis, the legislative body may approve and confirm the report and may, without further proceedings, authorize, issue, and sell the refunding bonds pursuant to Chapter 3 (commencing with Section 9600) of Division 11.5.


8572. A similar description of the bonds shall be inserted in the assessment issued by the street superintendent to the contractor under the Improvement Act of 1911, or in the assessment prepared by the street superintendent and in the notice of recording the assessment if the work is done under the Municipal Improvement Act of 1913 or other law.


8573. The bond declaration in the resolution of intention, assessment, and notice of recording the assessment may be substantially in the following form: "Notice is hereby given that serial bonds to represent unpaid assessments, and to bear interest at the rate of not to exceed ____ percent per annum, will be issued hereunder in the manner provided by Division 10 of the Streets and Highways Code, the Improvement Bond Act of 1915, and the last installment of such bonds shall mature ____ years from the second day of September next succeeding 12 months from their date."


Part 5. Issuance Of Bonds

Ca Codes (shc:8620-8626) Streets And Highways Code Section 8620-8626



8620. After confirmation of the assessment by the legislative body and after the filing of the statement of payments received upon the assessment by the contractor if the assessment was levied under the Improvement Act of 1911, or after 30 days from the date of recording the assessment in the office of the superintendent of streets or district engineer, if the assessment was levied under the Municipal Improvement Act of 1913 or other law, the street superintendent shall make and file with the treasurer a complete list of all unpaid assessments, upon the assessment.


8621. The treasurer shall determine the assessments which are unpaid and the aggregate amount thereof.


8622. The treasurer, if the assessment was levied under the Improvement Act of 1911, or the legislative body, if the assessment was levied under the Municipal Improvement Act of 1913 or other law, shall prescribe the denominations of the bonds, which shall be in convenient amounts, not necessarily equal, and shall provide for their issuance.


8623. The bonds shall be immediately delivered to the contractor or its assigns in satisfaction of the balance due upon the assessment and warrant if the assessment was levied under the Improvement Act of 1911, or, if the assessment was levied under the Municipal Improvement Act of 1913 or other law, the bonds shall be sold in the manner determined by the legislative body.


8624. The estimated cost of incidental expenses, as defined in the law under which the assessment was levied, shall be included in the assessment.

8625. If bonds can not be issued upon the security of any particular unpaid assessments because of a restraining order, injunction or other cause not applicable to other unpaid assessments, the issuance of bonds upon the security of the assessments not affected by such restraining order, injunction or other cause, shall not be delayed, and such bonds may be issued in advance of the issuance of the bonds so affected.


8626. If the assessment was levied under the Municipal Improvement Act of 1913 or other law, the proceeds of the sale of the bonds shall be paid into the fund of the proceeding to represent the assessments for which the bonds were issued. If the bonds are sold for an amount in excess of par, the excess shall be paid into the fund specified in Section 10424 or other special fund specified in the law pursuant to which the assessment was levied to finance the acquisitions or improvements.


Part 6. Form And Content Of Bonds

Ca Codes (shc:8650-8655) Streets And Highways Code Section 8650-8655



8650. (a) Except as provided otherwise by the legislative body pursuant to Section 8650.1, the bonds shall be issued in series and an even annual proportion of the aggregate principal sum thereof shall be payable on the second day of September every year succeeding the first 12 months after their date, until the whole is paid. The bonds shall bear interest at a rate not in excess of the maximum rate permitted by law from the 31st day after recording the assessment if the assessment was levied under the Improvement Act of 1911, or from their date if the assessment was levied under the Municipal Improvement Act of 1913 or other law, on all sums unpaid, until the whole of the principal sum and interest are paid. (b) Interest shall be payable semiannually on the second day of March and September, respectively, of each year. The first payment of interest shall become due on the interest payment date which is six months before the maturity of the first series of bonds, but, if any portion of the interest is funded, the legislative body may specify that the first payment of interest shall become due on any earlier interest payment date following the date of the bonds. Interest shall be payable to the registered holders of the bonds as their names and addresses appeared on the records of the issuing agency or its registration agent on the 15th day of the calendar month preceding the interest payment date.

8650.1. The legislative body, in its discretion, may determine, either (a) in the resolution of intention describing the improvement work, or (b) thereafter in any change proceedings taken under and in accordance with the provisions of the same act under which the resolution of intention was adopted, that the principal amount of the bonds maturing or becoming subject to mandatory prior redemption each year shall be other than an amount equal to an even annual proportion of the aggregate principal of the bonds, and it may determine that the amount of principal maturing or becoming subject to mandatory prior redemption in each year plus the amount of interest payable in that year will be an aggregate amount that is substantially equal each year, except for the moneys falling due on the first maturity or mandatory prior redemption date of the bonds which shall be adjusted to reflect the amount of interest earned from the date when the bonds bear interest to the date when the first interest is payable on the bonds. Notwithstanding Section 8651.5, to the extent that the determination to issue bonds pursuant to Section 8570 includes term bonds, the legislative body shall provide for mandatory prior redemption of those bonds, without premium, through annual sinking fund installments conforming to the requirements of this section. Notwithstanding Section 8652, the legislative body may prescribe the form of the bonds and shall fix the date of the bonds. The legislative body may divide the principal amount of any issue into two or more divisions and fix different dates for the payment of bonds of each division. The bonds of one division may be made payable at different times than bonds of any other division. The legislative body, in its discretion, may determine in like manner to classify assessments into different terms of maturity so that smaller assessments may be made to mature over a shorter period of time and, in that event, the bond declaration in the resolution of intention, or in the change proceedings taken under and in accordance with the provisions of the same act under which the resolution of intention was adopted, in the assessment, and in the notice of recording the assessment may recite that the last installment of bonds shall mature a maximum rather than an exact number of years from the second day of September next succeeding 12 months from their date.


8651. The final series of installment of the bonds shall mature and be payable on a date which shall not exceed 39 years from the second day of September next succeeding 12 months from their date.


8651.5. Each bond, or any portion of the bond in a fixed amount or any integral multiple of the fixed amount, shall be subject to redemption in advance of its maturity on any interest payment date upon payment to the registered owner of the principal and accrued interest to the date of redemption together with a redemption premium equal to 5 percent of the principal. Prior to issuance of the bonds, the legislative body may provide for a reduction of the redemption premium to an amount equal to not less than 3 percent of the principal for the first five years of the term of the bonds or to any amount, including zero, after the first five years of the term of the bonds, or both.


8652. The bonds shall be substantially in the following form: United States of America State of California County of ______ REGISTERED REGISTERED Number $ IMPROVEMENT BOND City (or County) of (naming it) __________ SERIES NO.______ INTEREST MATURITY BOND CUSIP RATE DATE DATE NUMBER ____,19__ Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the Streets and Highways Code (the "Act"), the City (or County) of ____, County of ____, State of California, (the "City" or "County") will, out of the redemption fund for the payment of the bonds issued upon the unpaid portion of assessments made for the acquisition, work, and improvements more fully described in proceedings taken pursuant to Resolution of Intention No. ____, adopted by the (legislative body) of the City (or County) of ____ on the ____ day of ____, 19_, (as later amended), pay to ____ or registered assigns, on the maturity date stated above, the principal sum of ____, in lawful money of the United States of America and in like manner will pay interest from the interest payment date next preceding the date on which this bond is authenticated, unless this bond is authenticated and registered as of an interest payment date, in which event it shall bear interest from such interest payment date, or unless this bond is authenticated and registered prior to ____, 19_, (first interest payment date) in which event it shall bear interest from its date, until payment of such principal sum shall have been discharged, at the rate per annum stated above, payable semiannually on March 2 and September 2 in each year commencing on ____, 19__. Both the principal hereof and redemption premium hereon are payable at ____ as Transfer Agent, Registrar, and Paying Agent, in ____, California, and the interest hereon is payable by check or draft mailed to the owner hereof at the owner's address as it appears on the records of the ____ (issuing agency or registration agent) or at an address that has been filed with the ____ (issuing agency or registration agent) for that purpose, as of the 15th day of the calendar month immediately preceding each interest payment date. This bond will continue to bear interest after maturity at the rate above stated; provided, it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in said redemption fund with which to pay same. If it is not presented at maturity, interest thereon will run until maturity. This bond shall not be entitled to any benefit under the Act or the Resolution Authorizing Issuance of Bonds (the "Resolution of Issuance"), or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the ____ (issuing agency or registration agent). IN WITNESS WHEREOF, the City (or County) of ____ has caused this bond to be signed in facsimile by the Treasurer of the City (or County) and by its Clerk, and has caused its corporate seal to be reproduced in facsimile hereon all as of the ____ day of ____, 19_. CITY (OR COUNTY) OF ________ _______________________ __________________________ Clerk Treasurer (SEAL) Certificate of Authentication and Registration This is one of the bonds described in the within mentioned Resolution of Issuance, which has been authenticated and registered on By ____________________ ADDITIONAL PROVISIONS OF THE BOND This bond is one of several annual series of bonds of like date, tenor, and effect, but differing in amounts, maturities, and interest rates, issued by the City (or County) of ____ under the Act and the Resolution of Issuance, for the purpose of providing means for paying for the improvements described in the proceedings, and is secured by the moneys in the redemption fund and by the unpaid portion of assessments made for the payment of those improvements, and, including principal and interest, is payable exclusively out of the redemption fund. This bond is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writing, at the office of ____ (issuing agency or its registration agent), subject to the terms and conditions provided in the Resolution of Issuance, including the payment of certain charges, if any, upon surrender and cancellation of this bond. Upon transfer, a new registered bond or bonds, of any authorized denomination or denominations, of the same maturity, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. Bonds shall be registered only in the name of an individual (including joint owners), a corporation, a partnership, or a trust. Neither the issuing agency nor the registration agent shall be required to exchange or to register the transfer of bonds during the 15 days immediately preceding any interest payment date. The issuing agency and the registration agent may treat the owner hereof as the absolute owner for all purposes, and the issuing agency and the registration agent shall not be affected by any notice to the contrary. This bond or any portion of it in the amount of five thousand dollars ($5,000), or any integral multiple thereof, may be redeemed and paid in advance of maturity upon the second day of March or September in any year by giving at least 30 days' notice by registered or certified mail or by personal service to the registered owner hereof at the owner's address as it appears on the registration books of the ____ (issuing agency or registration agent) by paying principal and accrued interest together with a premium equal to ____ percentum of the principal. This bond is not subject to refunding pursuant to the procedures of Division 11 (commencing with Section 9000) or Division 11.5 (commencing with Section 9500) of the Streets and Highways Code prior to ______, ___. (If applicable). I hereby certify that the following is a correct copy of the signed legal opinion of _______ City (or County) Clerk


8653. The bonds shall be signed by the treasurer and the clerk of the legislative body. However, the legislative body may by order authorize the use upon the bonds of an engraved, printed, or lithographed signature of the treasurer and the clerk of the legislative body in place of a signature by hand. It may also authorize the seal to be placed in like manner on the bonds.


8654. The bonds shall bear interest at the rate specified or determined in the proceedings. The bonds maturing in any year shall constitute the annual series of that year and the aggregate principal of the bonds in such series shall equal the annual proportion of the aggregate principal sum of the entire bond issue hereinbefore referred to.


8655. The bonds, by their issuance, shall be conclusive evidence of the regularity of all proceedings had prior thereto under this division and under the law pursuant to which the assessment was levied.


Part 6.5. Variable Interest Rate Bonds

Ca Codes (shc:8660-8665.5) Streets And Highways Code Section 8660-8665.5



8660. As an alternative to any other authority, a legislative body may, at its discretion, issue bonds bearing a variable interest rate pursuant to this division. This part does not alter or restrict authority to authorize assessments or issue bonds pursuant to any other provision of this division in any way. All provisions of this division shall apply to proceedings pursuant to this part, except as expressly provided in this part.


8660.5. The legislative body may determine to issue serial or term bonds, or both, bearing a variable interest rate that represent and are secured by assessments which are made to pay the cost of any authorized work or improvement. The bonds shall be sold at not less than 95 percent of the principal amount in the manner determined by the legislative body.


8661. If the legislative body determines to issue bonds as provided in this part to represent the expense of any proposed work or improvement, it shall, in the resolution of intention to do the work, do all of the following: (a) Declare that the serial or term bonds are issued pursuant to this division to represent the expenses of the proposed work or improvement. (b) Specify that the bonds may bear a variable rate of interest. (c) Specify the maximum rate of interest which the bonds may bear.


8662. The bonds shall be substantially in the form set forth in Section 8652, except as revised to conform to this part.


8663. The unpaid assessments shall be payable in substantially the manner set forth in subdivision (a) of Section 8680, or in substantially the same manner, but at more frequent intervals, as provided by the legislative body by resolution. The legislative body may designate an official, including an official other than the county tax collector, or other agent, to collect and maintain records of the collection of the assessments, including a procedure other than through the property tax collection procedure prescribed in this division. The legislative body may authorize an additional assessment to pay the costs of collection, not to exceed the percentages or amounts set forth in Section 8682, and an additional amount to cover the costs of registration, not to exceed the percentages and amounts set forth in Section 8682.1. The legislative body may authorize an additional assessment to pay for incidental expenses of the financing. The assessments and the interest on the assessments for each pay period are payable at the end of the pay period and are delinquent thereafter, and shall bear the same proportionate penalties and interest after delinquency as the assessment installments in the subject proceedings.


8663.5. Interest on all unpaid assessments shall run from the date of the bonds, and shall be computed for each interest pay period at the date determined pursuant to the terms of the bond for that interest pay period.

8664. Each bond, or any portion of the bond in a fixed amount or any integral multiple of the fixed amount, shall be subject to redemption in advance of its maturity on any interest payment date upon payment to the registered owner of the principal and accrued interest to the date of redemption together with a redemption premium, if any, as determined by the legislative body, not to exceed 5 percent of the principal.


8664.3. The legislative body may, by resolution, specify that the interest rate on the bonds may vary from time to time as determined by a bond index or some other means prescribed in the resolution.


8664.5. The legislative body may, by resolution, specify terms and conditions under which the bonds may be converted to a fixed interest rate.

8665. The legislative body may, by resolution, specify terms and conditions under which the city agrees to repurchase the bonds. The legislative body may secure a letter of credit or other instrument to secure payment or repurchase of any bonds, and the resulting costs, including costs of initially securing, maintaining, or making any payments arising from the exercise of, a letter of credit or other instrument, may be treated as incidental expenses. The legislative body may engage a remarketing agent and an indexing agent, subject to terms and conditions agreed to by the legislative body, and the resulting costs may be treated as incidental expenses.


8665.5. The notice of assessment recorded with the county recorder pursuant to Section 3114 shall include the following statement: Notice is further given that unpaid assessments are subject to interest at a variable interest rate.


Part 7. Bond Records And Payments

Ca Codes (shc:8670-8672) Streets And Highways Code Section 8670-8672



8670. The bonds and interest shall be paid at the office of the treasurer or of another paying agent designated by the legislative body.

8671. The treasurer or designated paying agent shall keep a redemption fund designated by the name of the bonds, in which there shall be placed all sums received from the collection of the assessments made. The fund shall be considered a trust fund for the benefit of the bondholders. The redemption fund shall be used for paying principal and interest and redemption premium, if any, payments on the bonds directly, or money in the fund may be forwarded to the paying agent for these purposes. Under no circumstances shall the bonds or the interest thereon be paid out of any other fund.


8672. The treasurer or the designated paying agent shall keep a register in his or her office showing the series, number, date, amount, rate of interest, and last known holder of each bond, and the number and amount of each interest coupon paid. The treasurer or agent shall cancel and file each bond and coupon which he or she pays. The register, canceled bonds, and coupons shall be retained for five years beyond the last maturity of the bond issue.


Part 8. Collection Of Assessments

Ca Codes (shc:8680-8689) Streets And Highways Code Section 8680-8689



8680. (a) The unpaid assessments shall be payable in annual installments corresponding in number and proportionate amount to the number of installments and principal amounts of bonds maturing or becoming subject to mandatory prior redemption in each year pursuant to Section 8650.1. An annual proportion of each assessment shall be payable in each fiscal year preceding the date of maturity or mandatory prior redemption date of each of the bonds which have been issued, sufficient to pay the bonds when due. The annual proportion of each assessment coming due in any year, together with the annual interest on the assessment, shall be payable in the same manner and at the same time and in the same installments as the general taxes of the city on real property are payable, and the assessment installments and the annual interest on the assessment shall be payable and become delinquent at the same times and in the same proportionate amounts and, except as provided in subdivision (b), shall bear the same proportionate penalties and interest after delinquency as do the general taxes on real property of the city. (b) The legislative body may provide, in the resolution of intention to do the work, that a penalty of 2 percent per month of the total amount of the delinquent installment shall be added to the delinquent installment after the close of business on the delinquency date and an additional penalty of 2 percent of the amount of the delinquency shall be added at the beginning of business on the 10th day of each succeeding month until that delinquent installment and all penalties thereon are fully paid. This penalty shall be in lieu of all other penalties assessed by other provisions of law. The treasurer or the designated paying agent shall collect the penalties with, and as a part of, the delinquent installments, or the legislative body may designate another official and another method of collection. All penalties collected shall be deposited in the redemption fund.

8681. Interest on all unpaid assessments shall begin to run from the date of filing of the contractor's statement, or as otherwise provided in the law pursuant to which the assessment was levied, or from the date of the bonds if the assessment was levied under the Municipal Improvement Act of 1913 or other law, and shall be computed at the rate specified in the bonds secured by the assessments. For each year interest shall be computed and collected up to the next second day of September succeeding, no deduction being made by reason of any installment of the assessment being due or paid prior thereto in such year.

8682. (a) A copy of the order of the legislative body determining the assessments remaining unpaid and upon the security of which bonds are issued shall be filed in the office of the auditor. The auditor shall keep a record in his or her office showing the several installments of principal and interest on the assessments which are to be collected in each year during the term of the bonds. The auditor shall annually enter in his or her assessment roll on which taxes will next become due, opposite each lot or parcel of land affected in a space marked "public improvement assessment," or by other suitable designation, the several installments of the assessment coming due during the fiscal year covered by the assessment roll, including in each case the interest due on the total unpaid assessments. (b) The auditor shall also add a maximum of 5 percent of the amount of the installments and of the interest so entered, not to exceed the city treasurer's estimate of the expenses of collection, and in any case not to exceed eight dollars ($8) per lot or parcel per installment, except with the landowner's written consent. The expenses of collection shall include necessary administrative expenses of the city incurred in providing the auditor with current information regarding the ownership or division of the affected lots or parcels of land to ensure the proper entry by the auditor in his or her assessment roll of the several installments of the assessment coming due during the fiscal year covered by the assessment roll and the timely collection of the installments. The percentages, and the amount represented by the installments, when collected shall belong to the city and shall cover the expenses and compensation of the city treasurer incurred in the collection of the assessments, and of the interest and penalties added on to the assessments. No other percentage or amount shall be claimed by the legislative body for the collections. (c) In the case of an assessment district created prior to January 1, 1988, the amount of collection costs which may be collected pursuant to this section may be the amount which could have been collected pursuant to this section as it read prior to being amended by Chapter 874 of the Statutes of 1986.


8682.1. (a) In addition to the amounts set forth in Section 8682, the auditor shall further annually enter in the assessment roll on which taxes will next become due, opposite each lot or parcel of land affected, in the manner set forth in Section 8682, each lot's or parcel's pro rata share of the annual expenses of the city in connection with the registration of the bonds under the system of registration authorized by Chapter 1.5 (commencing with Section 5050) of Division 6 of Title 1 of the Government Code, as determined by the legislative body. The expenses shall include the amount or estimated amount necessary to pay the fees and charges coming due during the fiscal year covered by the assessment roll of corporate or other authenticating agents, transfer agents, registrars, paying agents, agents engaged to assist in complying with federal arbitrage requirements, or other agents of the city. If the city performs any transfer, registration, authentication, payment, or other function described in this section, the expenses shall include a pro rata amount of the salaries of the city employees involved in the performance of the functions and all other costs incurred by the city in connection with the functions. (b) Alternatively, the legislative body may elect to include in the assessment, and in the amount of the bonds, the estimated aggregate total of the expenses throughout the term of the bonds and to pay the annual amounts of the expenses from the fund created. Any amount remaining in the fund upon the retirement of the bonds shall be disposed of as provided in Section 8783.


8683. If the legislative body conducting the proceedings is not a county and collections of assessments are made by county officials, the county auditor shall, within 90 days after each installment becomes delinquent, render to the city a detailed report showing the amounts of the installments, interest, penalties, and percentages so collected on each proceeding and from what property collected, identifying any properties which are delinquent and the amount and length of time in arrears, and also giving a statement of the percentages retained for the expenses of making such collections.


8684. Taxpayers shall have the same right to pay assessments together with interest, and any penalties thereon, under protest as they have to pay general city taxes under protest, but their written protest must accompany each such payment.


8685. If any lot or parcel of land affected by any assessment is not separately assessed on the tax roll so that the installment of the assessment to be collected can be conveniently entered thereon, then the auditor shall enter on the roll a description of the lot or parcel affected, with the name of the owners if known, but otherwise the owners may be described as "unknown owners," and extend the proper installment opposite the same.


8686. If it appears to the legislative body that, according to the dates when taxes are collected in the city, there will be an insufficient amount on hand to pay the interest when due, according to the method of collection provided by the preceding provisions of this division, the legislative body may direct that such interest or some portion of it be collected in the year preceding that in which the same would otherwise be collected, and thereupon such interest or portion thereof shall be extended on the rolls for such preceding year and be due and collected therein.


8688. Any interested owner shall have the right to tender to the treasurer in payment or part payment of any installment of the assessment or interest or penalties thereon which may be due or payable, any bond secured thereby, the bond to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender. The treasurer shall thereupon cancel the bond and shall cause proper credit therefor to be entered on the records of the assessment, in the office of the auditor and tax collector.


8689. Within the Bass Lake Improvement District in Madera County, a person who has an interest in any land in the improvement district less than a fee interest, such as a leaseholder or subleaseholder, may pay, and the tax collector may accept payment for the entire assessment or any installment thereon, including the assessment on the fee interest. When the tax collector accepts such payment on a portion or part of a parcel, the tax collector shall record such information as required to identify such payment, and the tax collector may add to such assessment a fee as required to pay any additional costs incurred for accepting such payment on a portion of the parcel assessed. The tax collector shall deposit all such fees in the general fund of the treasury.


Part 9. Assessment Liens And Reassessments

Ca Codes (shc:8700-8708) Streets And Highways Code Section 8700-8708



8700. In the event bonds are ordered to be issued, the unpaid assessments, as shown on the list filed by the street superintendent and determined by the legislative body, and any reassessments which may be issued thereon or in lieu thereof, together with interest thereon, shall remain and constitute a trust fund for the redemption and payment of the principal of the bonds and for the interest which may be due thereon.


8701. Such assessments and reassessments and each installment thereof and the interest and penalties thereon shall constitute a lien against the lots and parcels of land on which they are made, until the same be paid, but for a period not exceeding the time within which an action might be brought on the last series of bonds issued upon the security of such unpaid assessments.


8702. The lien, whether bonds issued to represent the assessment or otherwise, shall be subordinate to all fixed special assessment liens previously imposed upon the same property, but it shall have priority over all fixed special assessment liens which may thereafter be created against the property.


8703. The lien of a reassessment and a refunding assessment shall have the same priority as the original assessment to which it relates. A supplemental assessment is a new assessment.


8704. Unmatured installments, interest and penalties secured by any such lien or liens shall not be deemed to be within the terms of any general warranty of title.


8705. If any assessment heretofore or hereafter issued is void or unenforceable, for any cause, or if bonds are issued to represent or be secured by any assessments and that issuance is not effective through the curative provisions in relation thereto under the law pursuant to which the assessment was levied or under this division to make them valid and enforceable, then a reassessment may be made. The reassessment shall be made upon the demand of the owner or holder of bonds aggregating one-third of the principal amount outstanding, or upon order of the legislative body, and shall be made in the manner and form provided by the law pursuant to which the assessment was levied, without regard to whether the acquisition or improvement has been done or is proposed to be done, if any valid procedure is provided, and otherwise as provided by Chapter 19 (commencing with Section 5500) of Part 3 of Division 7.


8706. When made, the reassessment shall constitute a trust fund for the redemption and payment of the original bonds issued against the original assessment; or the legislative body may call in the original issue of bonds outstanding and issue new bonds upon the security of the reassessment in lieu thereof. If the legislative body determines that new bonds shall be issued upon the security of the reassessment, the notice of hearing upon the reassessment shall contain a declaration of intention to issue bonds substantially in the form provided for in Section 8573. Upon confirmation of the reassessment the legislative body may issue the new bonds in the manner that it determines.

8707. If the legislative body calls in the original issue of outstanding bonds, it may direct the treasurer to, and the treasurer shall thereupon, advance the maturity of the outstanding bonds bearing interest in the manner provided in Part 11 (commencing with Section 8750), notwithstanding the fact that there may not be surplus moneys in the redemption fund with which to pay the same. New bonds shall be issued in an aggregate amount equal to the total balance of the reassessment unpaid and shall bear interest from their date at the rate fixed by the legislative body.


8708. Upon the surrender of the outstanding bonds, the new bonds shall be issued ratably to the holders of the original outstanding bonds. Each holder of such original bonds shall be entitled to such proportion of the new bonds as the total amount of the principal and interest due him on his original bonds, upon the date of the recordation of the reassessment, bears to the total amount of the principal of the new bonds. In making distribution the legislative body may assign the different bonds and allot maturities in such manner as to it shall seem equitable.


Part 10. Division Of Land And Bond

Ca Codes (shc:8730-8734) Streets And Highways Code Section 8730-8734



8730. If any lot or parcel of land upon which there is an unpaid assessment against which a bond has been issued under this division, is divided, including a division into condominium interests as defined in Section 783 of the Civil Code, or the ownership of a portion of such lot or parcel of land is transferred to another person, the legislative body may order the street superintendent to file with the clerk an amended assessment of the original parcel of land affected by such division or transfer of ownership, segregating and apportioning the unpaid installments of the original assessment in accordance with the benefits to the several parts of the original lot or parcel plus costs and fees of making the apportionment. The legislative body shall, at the time of ordering the amended assessment, fix the amount of costs and fees for preparing the amended assessment, the notices, and the amended assessment diagram.


8731. The street superintendent shall file with the clerk a report and an amended assessment of the lots or parcels of land described in the order of the legislative body, together with a map or plat showing how such lots or parcels have been divided. The total amount of the assessments of the several portions of any one original lot or parcel shall be equal to the unpaid assessments upon the original lot or parcel of land, plus the costs and fees for making the amended assessment, the notices, and the amended assessment diagram as determined by the legislative body under Section 8730. The street superintendent shall apportion the costs and fees to the respective parcels in proportion to the amount of the divided assessments against the parcels. Prior to making a division and prior to making the amended assessment, the street superintendent shall notify the owner of the original parcel assessed, as the name of the owner appears on the last equalized roll for taxes, or as it is known to the street superintendent, of the order of the legislative body fixing the costs and fees of the apportionment, and directing that the payment thereof be made to the superintendent of streets within 15 days of the notification. In the event the amount of the costs and fees of the apportionment is not paid within 15 days of the notification, the superintendent of streets shall proceed to prepare the amended assessment and shall show separately thereon, but as a part of the total, the amount of costs and fees chargeable to each divided parcel. The street superintendent shall deposit all such costs and fees in the general fund of the treasury.


8732. Upon the filing of the street superintendent's report and amended assessment the clerk shall fix a time and place for a hearing upon the amended assessment and shall give notice of the hearing by publication. The notice shall contain a statement of the time fixed for the hearing upon the amended assessment and any objections thereto, which time shall not be less than 15 days from the first publication of the notice. The notice shall contain a reference to the original assessment and to the improvement proceedings, and shall refer to the report and map or plat of the amended assessment for particulars and no other description of the lots or parcels of land affected thereby shall be necessary.

8733. All persons interested in the original assessment, or in the lands affected thereby or in the bonds secured thereby, may, at the time of the hearing or at the time to which the hearing may be continued, appear and protest against the amended assessment. At the hearing the legislative body shall hear and determine all objections to the division of the assessments and shall confirm or modify the same. All determinations and decisions of the legislative body shall be conclusive upon all persons entitled to object under the provisions of this section. Final action of the legislative body upon the report and amended assessment shall be taken on or before the fifteenth day of July of any year.


8734. The clerk shall file the amended assessment as confirmed or modified by the legislative body with the auditor, who shall annually thereafter enter upon the assessment roll the installments becoming due on each component part of the original parcel opposite a description of the respective parcels so assessed. The amount charged for fees and costs as shown on the amended assessment as to each parcel shall be entered upon the assessment roll and shall be collected along with the first installment of the amended assessment. The street superintendent shall deposit all such costs and fees in the general fund of the treasury. When a city is conducting the proceedings and collections upon the assessments are made by county officials the city clerk shall transmit a copy of the amended assessment to the county auditor. The amended assessment shall be accompanied by an amended map or plat prepared pursuant to Section 8731. Such amended map or plat shall be designated "amended assessment diagram amending Assessment No. ____, Assessment District ____, State of California." The amended map or plat shall substantially conform to the requirements and specifications provided for in Section 3114, and shall be filed by the clerk in the office of the county recorder. The county recorder may charge an appropriate fee for the expense incurred in filing the amended map or plat. The map or plat shall be cross-indexed by the recorder to the original assessment diagram which it amends. The amended map or plat shall include on its face that it amends the assessment diagram for (here insert name or number of assessment district or both name and number of assessment district, together with city or county or both city and county), State of California prior recorded at Book ____ of Maps of Assessment Districts at page ____, in the office of the County Recorder for the County of ____, State of California.


Part 10.5. Alternative Procedure For Division Of Land And Bond 8740-8740.5

Ca Codes (shc:8740-8740.5) Streets And Highways Code Section 8740-8740.5



8740. The procedures of this part are alternative to Part 10 of this division, relating to division of land and bond.


8740.1. If any lot or parcel of land upon which there is an unpaid assessment represented by bonds issued under this division is subdivided, including a division into condominium interests as defined in Section 783 of the Civil Code, or the ownership of a portion of such lot or parcel of land is transferred to another person, the owner of any interest in any of the lots or parcels into which the original lot or parcel has been divided shall file an application in writing with the street superintendent. The application shall indicate how the original lot or parcel has been divided or transferred, request the street superintendent to apportion the amount remaining unpaid on the assessment in accordance with the division, and be accompanied by a fee in an amount to be fixed by the legislative body for each separate part or parcel of land into which the original lot or parcel has been divided or transferred. The street superintendent shall deposit all such fees in the treasury.


8740.2. Upon receipt of the application and fee the street superintendent shall apportion to each separate part of the original lot or parcel of land the proportionate part of the amount remaining unpaid on the assessment that would have been levied thereon had the lot or parcel of land been so divided at the time the original assessment was made.


8740.3. (a) When the apportionment has been made, an application signed by all persons owning an interest in the original lot or parcel of land may be filed with the street superintendent requesting that the assessment as apportioned be recorded. (b) The street superintendent shall send to the underwriter or other original purchaser of any bonds which may be outstanding a notice, by certified or registered mail, that an apportionment of an assessment has been made and the numbers and amounts thereof and that, unless a request for a hearing is received within 14 days from the date of mailing of the notice, the apportioned assessments shall be recorded. If a request for a hearing is received, a report shall be filed and hearing shall be scheduled, noticed, and held in accordance with Part 10 (commencing with Section 8730).


8740.4. When the street superintendent has ascertained that the application is signed by all the necessary persons, and that no request for a hearing has been received, he shall thereupon amend the recorded diagram and assessment to conform to such division and apportionment and assign new assessment numbers to each separate part of the original lot or parcel of land.


8740.5. The street superintendent shall file the amended assessment with the auditor, who shall annually thereafter enter upon the assessment roll the installments becoming due on each component part of the original parcel opposite a description of the respective parcels so assessed. When a city is conducting the proceedings and collections upon the assessments are made by county officials, the street superintendent shall transmit a copy of the amended assessment to the county auditor.


Part 10.7. Bond Anticipation Notes

Ca Codes (shc:8745-8746.4) Streets And Highways Code Section 8745-8746.4



8745. The legislative body may, by resolution, borrow money in anticipation of the sale of bonds which have been authorized pursuant to this division, but which have not been sold and delivered, issue negotiable bond anticipation notes therefor, and renew the notes from time to time. The maximum maturity of any bond anticipation notes, including the renewals thereof, shall not exceed three years from the date of delivery of the original notes.


8745.2. The principal and interest on the bond anticipation notes may be paid from any money available for their payment. Any portion of the principal or interest which is due and payable shall be paid from the proceeds of the next sale of bonds in anticipation of which the notes were issued.

8745.4. The proceeds of bond anticipation notes issued pursuant to this part may be used for any purpose for which the bonds in anticipation of which the notes were issued may be used.


8745.6. The bond anticipation notes shall not be issued in any amount in excess of the aggregate amount of bonds which the legislative body has been authorized to issue, less the amount of any bonds of the authorized issue which have been previously sold and less the amount of other bond anticipation notes previously issued and still outstanding.


8745.8. The legislative body may provide, in its resolution authorizing the issuance of bond anticipation notes, that the note shall be subject to call and redemption prior to maturity, at the option of the legislative body, at the price or prices which are fixed in the resolution, but not to exceed a premium of 6 percent of the par value of the note subject to redemption. The resolution shall fix the method of giving notice of redemption to the holders of the notes to be redeemed and the price or prices at which the note shall be subject to redemption. Any notes that are subject to call and redemption prior to maturity shall contain a recital to that effect on their face, and no note shall be subject to call or redemption prior to its fixed maturity date unless it contains that recital.


8746. The bond anticipation notes may be issued and sold in the same manner as the bonds.


8746.2. The bond anticipation notes and the resolution authorizing them may contain any provisions, conditions, or limitations which a resolution of the legislative body authorizing the issuance of bonds may contain.

8746.4. The legislative body shall provide a remedy in its resolution authorizing the issuance of bond anticipation notes if the anticipated bonds cannot be sold at the time or in the amount specified in the resolution or if any default occurs with respect to the notes. Any remedy which is so provided shall limit the obligations of property owners within the area subject to assessment to the amount of the assessment authorized and levied, except that the legislative body may enter into an agreement with any of the property owners within the district pledging some or all of the property of those property owners who are a party to the agreement as additional security for the notes.


Part 11. Advance Retirement Of Bonds

Ca Codes (shc:8750-8756) Streets And Highways Code Section 8750-8756



8750. By proceeding in accordance with the provisions of this part the treasurer may advance the maturity of any bond to the second day of March or September in any year and pay and cancel the same whenever there is sufficient surplus moneys in the redemption fund for its retirement.


8751. Notice of advanced maturity shall be given in writing to the registered holder or owner of the bond by registered or certified mail or personal service. Service or mailing of the notice shall be made at least 30 days before the date fixed for advanced maturity.


8751.5. In the event the treasurer receives for payment any interest coupon from a bond for which notice of advanced maturity has been given without the bond being surrendered to him or her, he or she shall mail a copy of the notice of advanced maturity to the address given for payment of the coupon and, if the coupon received is for interest which has ceased to accrue on the bond by reason of its advanced maturity, shall also return the interest coupon with the copy of notice. Failure of the holder or owner of the bond to receive the additional notice shall not affect the advancing of the maturity of the bond.

8752. If notice of advanced maturity is given, the bond shall mature and become payable on the date fixed for maturity in the notice. The holder or owner of the bond may, prior to the date of advanced maturity, with the consent of the treasurer, surrender it and receive the principal and interest thereon to the date of payment together with the redemption premium provided for the bond. If the bond has not been sooner surrendered on the date fixed for advanced maturity, the treasurer shall set aside to the credit of the owner of the bond the amount of principal and accrued interest then due on the bond together with the redemption premium and the bond shall then be deemed to have matured and interest shall cease to accrue on the bond. The amount so set aside shall upon demand and upon the surrender and cancellation of the bond be paid to the holder or owner of the bond.


8753. The cost of serving or publishing the notice of advanced maturity shall be paid from the redemption fund.


8754. More than one bond may be covered in a single notice of advanced maturity.


8755. Prior to the surrender of any bond or the setting aside of any funds, the treasurer may waive and vacate any notice of advanced maturity upon being tendered for cancellation some other bond or bonds of an equivalent amount and of a maturity not earlier than that noticed, if 10 days' notice of his intention so to do is first given by mail or otherwise to the holder or owner of the bond noticed for advanced maturity and such holder or owner has not objected to such action.


8756. In selecting bonds for retirement, the treasurer shall follow the procedure set forth in Section 8768. The decision of the treasurer in selecting bonds for retirement shall be conclusive in the absence of fraud. The treasurer shall make provision for returning to owners releasing unpaid assessments under Part 8 all interest not accrued less the premium and interest paid on the bonds retired and the cost of administering retirement of the bonds.


Part 11.1. Alternative Procedure For Collecting Assessments And Advance Retirement Of Bonds

Ca Codes (shc:8760-8769) Streets And Highways Code Section 8760-8769



8760. The procedures of this part are alternative to Part 8 (commencing with Section 8680) and Part 11 (commencing with Section 8750) relating to the partial or full payment of assessments and advance retirement of bonds. Except as otherwise provided, Part 8 (commencing with Section 8680) and Part 11 (commencing with Section 8750) apply. When it is proposed to proceed under this part, it shall be so stated in the resolution of intention.


8766. The owner of assessed land, except land which has been ordered to judicial foreclosure pursuant to Section 8830, may prepay the assessment and remove the lien of the assessment by paying to the treasurer all of the following: (a) The amount of any delinquent installments of principal and interest, together with penalties accrued to the date of prepayment. (b) The unpaid, nondelinquent principal of the assessment, including principal posted to the tax roll for the current fiscal year but not yet paid. (c) An allowance for redemption premium, calculated by multiplying the amount of the unmatured principal by the redemption premium percentage stated in the bonds. Unmatured principal excludes principal due during the fiscal year of prepayment. (d) A reasonable fee, fixed by the treasurer, for the cost of administering the prepayment and the advance redemption of bonds. (e) Interest accrued to the next call date of the bonds. The next call date is the next bond interest payment date which is not less than 90 days after the date of prepayment. Credit shall be given, or a refund provided, for installments of interest posted to the current tax roll and actually paid. (f) A credit for the reserve fund calculated pursuant to Section 8881.

8766.5. The owner of assessed land, except land which has been ordered to judicial foreclosure pursuant to Section 8830, may prepay the assessment in part and remove the lien of the assessment in part by paying to the treasurer all of the following: (a) The amount of any delinquent installment of principal and interest, together with penalties accrued to the date of prepayment. (b) A portion of the unpaid, nondelinquent principal of the assessment in increments of five thousand dollars ($5,000). (c) An allowance for redemption premium, calculated by multiplying the amount of the unmatured principal being prepaid by the redemption premium percentage stated in the bonds. (d) A reasonable fee, fixed by the treasurer, for the cost of administering the prepayment and the advance redemption of bonds. (e) Interest accrued to the next call date of the bonds. The next call date is the next bond interest payment date which is not less than 90 days after the date of prepayment. (f) A credit for the reserve fund calculated pursuant to Section 8881. When an assessment has been partially prepaid, the treasurer shall issue a revised auditor's record for that parcel, showing the proportionate reduction in assessment installments. Thereafter, the treasurer shall levy subsequent installments at the reduced rate.


8767. Upon receiving a partial or full prepayment of an assessment, the treasurer shall deposit it in an assessment prepayment subaccount of the bond redemption fund. All prepayments may be commingled in a single account. From the account, the treasurer shall make disbursements as follows: (a) The administrative fee shall be deposited in the general fund of the city. (b) Delinquent principal, interest, and penalties shall be transferred to the redemption fund for the bonds. If a special reserve fund has been established for the bonds and has been depleted on account of the delinquencies, the delinquent amounts and penalties shall be transferred instead to the special reserve fund. (c) The installment of principal due in the fiscal year of prepayment shall be transferred to the redemption fund for the bonds. (d) Interest accrued to the next call date shall be transferred to the redemption fund for the bonds. (e) The balance in the assessment prepayment account shall be used to advance the maturity of bonds to the next call date, as provided in Part 11 (commencing with Section 8750). The amount of bonds to be retired shall be the maximum for which principal and redemption premium may be paid in full from the prepayment account. Accrued interest on bonds to be retired shall be paid from the redemption fund.

8768. The treasurer shall select bonds for retirement in such a way that the ratio of outstanding bonds to issued bonds shall be approximately the same in each annual series insofar as possible. Within each annual series, bonds shall be selected for retirement by lot.


8769. Before issuing bonds pursuant to this division, the legislative body shall determine, and shall declare in the resolution of intention, one of the following: (a) The city will obligate itself to advance available funds from the city treasury to cure any deficiency which may occur in the bond redemption fund. If the legislative body determines to so declare under this subdivision, the legislative body may provide further security for the assessment bonds by creating an improvement district pursuant to the Benefit Assessment Act of 1982. (b) The city will not obligate itself to advance available funds from the city treasury to cure any deficiency which may occur in the bond redemption fund. A determination not to obligate itself shall not prevent the city from, in its sole discretion, so advancing funds. The determination made pursuant to this section shall be clearly stated in the text of the bonds issued pursuant to this division, and the title of the bonds shall include the words "Limited Obligation Improvement" in the event that the declaration in subdivision (b) is made.


Part 12. Redemption Fund Deficiencies

Ca Codes (shc:8770-8784) Streets And Highways Code Section 8770-8784



8770. If it appears to the treasurer that there is danger of an ultimate loss accruing to the bondholders for any reason, he or she shall withhold payment on all matured bonds and interest and report the facts to the legislative body so that proper action may be taken by that body to equitably protect all bondholders.


8771. On receipt of the report, the legislative body shall fix a date for hearing thereon. The clerk shall give notice of the hearing by posting for 10 days. At the hearing the legislative body shall determine whether in its judgment there will ultimately be insufficient money in the redemption fund to discharge the unpaid bonds and interest. If it determines that in its judgment there will be no such shortage, it shall direct the treasurer to pay matured bonds and interest as long as there is available money in the redemption fund.

8772. If the legislative body determines that in its judgment there will be a shortage in the redemption fund, it shall direct the treasurer to pay to the holders of all outstanding and unpaid bonds such proportion thereof as the amount of funds on hand bears to the total amount of the unpaid principal of the bonds and the interest which has accrued or will accrue thereon. Similar proportionate payments shall thereafter be made periodically as moneys come into the redemption fund.


8773. In order to facilitate the making of proportionate payments, the holders of outstanding bonds shall surrender them to the treasurer for registration and cancellation. Upon cancellation each holder shall be credited with the amount of his bond so canceled. Thereupon the treasurer shall by warrant pay to each holder the proportionate amount of principal and accrued interest due on his or her bonds as may be available from time to time out of the money in the redemption fund. Interest shall cease on payments made on account of principal from the date of payment, but interest shall continue to run on the unpaid principal at the rate specified in the bonds until payment thereof be made. No premiums shall be paid on payments made in advance of the due date. If bonds are not surrendered for registration and payment the treasurer shall give notice to the holder thereof by registered mail, at the holder's address as last known to the treasurer, of the amount available for payment. Thereupon interest shall cease as to the amount so available for payment 10 days from the date of mailing of the notice.


8774. The legislative body may hold supplemental hearings on like notice and such other and supplemental orders may be made from time to time as may be equitable and proper.


8775. If a deficiency occurs in the redemption fund with which to pay past due bonds, past due interest, or bonds or interest which will become due during the current tax collecting year, but it does not appear to the treasurer that there will be an ultimate loss to the bondholders, he shall pay matured bonds as presented and make interest payments when due as long as there are available funds in the redemption fund, in the following order of priority: (1) All matured interest payments shall be made before the principal of any bonds is paid. (2) Interest on bonds of earlier maturity shall be paid before interest on bonds of later maturity. (3) Within a single maturity, interest on lower-numbered bonds shall be paid before interest on higher-numbered bonds. (4) The principal of bonds shall be paid in the order in which the bonds are presented for payment. Any bond which is presented but not paid shall be assigned a serial number according to the order of presentment and shall be returned to the bondholder. Bonds not paid when presented, and interest payments not paid when due, shall bear interest at the rate stated in the bonds, without compounding, until paid.

8776. When funds become available for the payment of any bond which was not paid upon presentment, the treasurer shall notify the registered owner thereof by registered mail to present the bond for payment. If the bond is not presented for payment within 10 days after the mailing of the notice, interest shall cease to run on the bond.


8778. If a deficiency remains in the redemption fund after one year from the issuance of the bonds, the legislative body may require all persons interested to appear before it at a day, hour and place fixed by it for a hearing and to show cause why a supplemental assessment should not be made to pay for the cost and incidental expenses of the original work done upon which the original assessments were made upon which the bonds were issued.


8779. Notice of the hearing shall be given by publication, and shall also be posted by the street superintendent in the same manner as provided by the law pursuant to which the work was done for the posting of notices of the passage of the resolution of intention. The first publication of the notice and the posting shall be completed 10 days before the time fixed for the hearing.


8780. At the time set for the hearing the legislative body shall proceed to hear any person appearing and may determine whether or not such deficiency was due to the fact that the original assessment for such cost and incidental expenses was not apportioned equitably or in accordance with benefits. The hearing may be postponed from time to time. If it appears to the legislative body that the amount apportioned to any lot was less than the amount which such lot should equitably bear according to the benefit which it received from the improvement, the legislative body may levy a supplemental assessment apportioning to such lot the additional sums which it should equitably bear according to such benefits.


8781. The cost of the publication and posting of the notice and of making the supplemental assessment may be included in the supplemental assessment. A copy of the order levying the supplemental assessment shall be recorded in the office of the street superintendent and from and after such recording, the sum therein levied on any lot shall be and constitute a lien thereon and thereafter bear interest at the rate specified in the bonds. The several amounts levied by the supplemental assessment shall be extended on the next succeeding tax rolls to be delivered to the tax collector and shall be collected in the manner provided for the collection of installments of the original assessments.


8782. The legislative body may provide in its order levying the supplemental assessment that the supplemental assessments may be collected in annual installments during the remaining term of years during which the bonds run, an equal proportion of principal coming due in each of the remaining years. However, any property owner may pay the whole of the supplemental assessment subsequent to the order of the legislative body and before the amount has been extended on the tax roll, whereupon interest shall cease on such assessment.


8783. All money collected on the supplemental assessment shall be paid into the redemption fund and be applied to the payment of the costs of publishing and posting the notice of hearing and of making the supplemental assessment and then to the payment of the bonds and interest thereon. After satisfaction of the bonds, repayment, if possible, of all funds collected on the supplemental assessment shall be made to those persons paying the same out of recoveries had through the collection of the delinquent installments of the assessments upon which the bonds were originally issued and of the interest and penalties thereon, and then out of any surplus remaining in the redemption fund after repayment to the city of any special taxes levied by it for the purpose of advancing funds under Part 13 (commencing with Section 8800) less its recovery on the sale or redemption of the properties assessed and any costs incurred by it under this division.

8784. If there is a surplus remaining in the redemption fund after payment of all bonds and the interest thereon, that surplus shall first be applied to repayment to the city of any special taxes levied by it for the purpose of advancing funds under Part 13 (commencing with Section 8800) less its recovery on the sale or redemption of the properties assessed, and also of any costs incurred by it under this division. The remainder shall be repaid in accordance with the provisions of Section 8783 to persons paying supplemental assessments, if any, and the balance may be proportionately credited upon the final installments due upon the assessments securing the bonds and repaid to those persons whose assessments have been previously paid or may be transferred to the general fund of the city.


Part 13. Sale For Delinquency

Ca Codes (shc:8800-8809) Streets And Highways Code Section 8800-8809



8800. Upon default in the payment of any installment of principal or interest on any assessment or reassessment, the lands securing those installments and assessments shall become tax-defaulted in the same manner in which real property in the city becomes tax-defaulted for the nonpayment of general city taxes, and shall be subject to redemption in the same manner and to the same extent that real property in the city which has become tax-defaulted for the nonpayment of general city taxes may be redeemed.


8801. If any lot or parcel of land becomes tax-defaulted property for nonpayment of taxes and of any installment of the assessment thereon, or of the penalties, interest, or costs on the same, or for the nonpayment of any installment of the assessment or of the penalties, interest, or costs on the same, the declaration of default pursuant to Section 3436 of the Revenue and Taxation Code and the deed issued pursuant to Section 3708 of that code, are primary evidence of the regularity of all proceedings had prior thereto, and shall be conclusive evidence of all things of which bonds issued upon the security thereof are conclusive evidence, and prima facie evidence of the regularity of all proceedings subsequent to the issuance of the bonds, and the deed conveys to the grantee the absolute title to the lands described therein, free of all incumbrances, except the lien for other state, county, and city taxes, unpaid installments, interest, and penalties under the same proceeding, and unpaid installments, interest, and penalties, the lien of which is subordinate thereto, and except all public improvement assessments which may have priority thereover.


8802. The city may pay and transfer into the redemption fund the amount of the delinquent assessment and of the delinquent interest for which the property has become tax-defaulted.


8803. If a county or a city whose taxes are collected by the county is conducting the proceedings and the county or city has advanced available funds either in performance of its obligations in proceedings wherein the assessment was levied prior to September 17, 1986, or under subdivision (a) of Section 8769, or voluntarily under subdivision (b) of Section 8769, the tax collector shall account to the county or the city for any moneys received upon redemption or from the sale of the property. In that case, for the purposes of this division, the county or the city shall be entitled to reimbursement of any amounts so advanced from any moneys so received.


8804. If there are no available funds in the treasury with which to make payment of the amount of the delinquent assessment and interest for which the property was declared to be in default, the tax collector shall make demand upon the legislative body that a suitable amount be included in the next tax levy for the purpose of providing funds with which to make the payment. However, the period of redemption from the declaration of default shall not be extended thereby nor shall the rights or privileges of the property owner be affected. This section applies only to bonds representing unpaid assessments, which assessments were confirmed before June 6, 1978.


8805. If the city has made advances as provided in Section 8803 with respect to any installment and any succeeding installment of the assessment or of the interest on the assessment is not paid in any future year, the property shall not be declared in default unless there has previously been a redemption from such declaration or unless under the law the property is then being declared in default for delinquent taxes.


8806. Notwithstanding Section 8805, if a city has advanced available funds either in performance of its obligations in proceedings wherein the assessment was levied prior to September 17, 1986, or under subdivision (a) of Section 8769, the city shall, from time to time when due, pay and transfer into the redemption fund the amount of any future delinquent installments of the assessment and interest thereon pending redemption, and no redemption shall be made until any subsequent payments, with interest and penalties, are paid.


8808. The city shall have the right to advance and pay any other taxes wherever necessary to protect its interest in property against which there is a delinquent assessment. It may also, at its discretion, temporarily transfer moneys into the redemption fund from other funds in which the moneys are not immediately needed. If the city has determined to obligate itself to use available funds to cure any deficiency in the redemption fund pursuant to subdivision (a) of Section 8769, it shall temporarily transfer available funds to the redemption fund upon determining that a deficiency exists. The moneys so transferred are to be used to pay sums due from the redemption fund and to be retransferred therefrom out of the first available receipts.


8809. The legislative body, shall, at the time of fixing the annual tax rate and levying the taxes to be collected for general city purposes, levy a special tax upon the taxable property in the city for the purpose of making advances under this part, and also for the purpose of paying installments of the assessment or of the interest thereon, which the city is required to pay under Section 8806, but not to exceed for each local improvement ten cents ($0.10) on each one hundred dollars ($100) of assessable property in any one year. The special tax shall be in addition to all other taxes levied for city purposes, and shall be computed, entered and collected in the same manner, and by the same persons and at the same time and with the same penalties and interest as are other taxes of the city. This section applies only to bonds representing unpaid assessments, which assessments were confirmed before June 6, 1978.


Part 14. Foreclosure By Action

Ca Codes (shc:8830-8837) Streets And Highways Code Section 8830-8837



8830. (a) As a cumulative remedy, if any assessment or reassessment or installment thereof, or of any interest thereon, together with any penalties, costs, fees, and other charges accruing under applicable taxation provisions are not paid when due, the legislative body may order that the same be collected by an action brought in the superior court to foreclose the lien thereof as provided by this part. (b) The legislative body may, by resolution adopted prior to issuance of bonds under this division, covenant for the benefit of bondholders to commence and diligently prosecute any foreclosure action regarding delinquent installments of any assessments or reassessments which secure the bonds that are to be issued, and, at any time, may assign the causes of action arising from the foreclosure to a trustee to do so on behalf of the bondholders. The resolution may specify a deadline for commencement of the foreclosure action and other terms and conditions as the legislative body may determine to be reasonable regarding the foreclosure action. (c) Except as provided in Section 8836, all installments, interest, penalties, costs, fees, and other charges that are delinquent at the time of the ordering of a foreclosure action shall be collected in the action. If a lot or parcel of property has not been sold pursuant to judgment in the foreclosure action at the time that subsequent installments and interest become delinquent, the court may include the subsequent installments, interest, penalties, costs, fees, and other charges in the judgment or modified judgment. (d) For purposes of financing delinquent assessments pursuant to Section 26220, the legislative body may act as if it were a board of supervisors. (e) Notwithstanding any other provision of this chapter, no trustee or joint powers authority shall be obligated to accept the tender of bonds in satisfaction of any obligation arising from a delinquent assessment, although either may do so if authorized to do so by the legislative body. (f) An action to determine the validity of any bonds issued, any joint powers agreement entered into, and any related agreements entered into, by a joint powers agency acting pursuant to this section may be brought by the joint powers agency pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure. Any appeal from a judgment in the action shall be commenced within 30 days after entry of judgment.


8831. Costs in the action shall be fixed and allowed by the court and shall include a reasonable attorney's fee, interest, penalties and other charges or advances authorized by this division, including reasonable administrative costs incurred by the city in pursuing the foreclosure, and when so fixed and allowed by the court the costs shall be included in the judgment.


8832. (a) The court shall have the power to adjudge and decree a lien against the lot or parcel of property covered by the assessment or reassessment for the amount of the judgment and to order the premises to be sold on execution as in other cases of the sale of real property by the process of the court except: (1) Notwithstanding Section 701.545 of the Code of Civil Procedure, notice of sale of any lot or parcel included in the judgment may be given pursuant to Section 701.540 of the Code of Civil Procedure any time after the expiration of 20 days after the date notice of levy on the interest in real property was served on the judgment debtor or debtors, provided that the lot or parcel to be sold is not a dwelling for not more than four families. (2) Whenever notice of sale may be given after the expiration of 20 days after the date notice of levy was served as provided in paragraph (1), the 30-day time period contained in subdivision (h) of Section 701.540 of the Code of Civil Procedure shall be reduced to 10 days. (3) Upon proof that the lot or parcel to be sold is not a dwelling for not more than four families, pursuant to Section 716.020 of the Code of Civil Procedure, the court shall order that paragraphs (1) and (2) apply to any judgment previously entered. (4) Subdivision (b) of this section shall apply instead of subdivision (a) of Section 701.620 of the Code of Civil Procedure. (5) Notwithstanding subdivision (c) of Section 701.620 of the Code of Civil Procedure, if the minimum price required to be paid for a lot or parcel pursuant to subdivision (b) is not obtained at a foreclosure sale, upon written request of the city, the levying officer shall retain the writ of sale and, provided that the writ of sale has not been returned to the court pursuant to paragraph (1) of subdivision (a) of Section 699.560 of the Code of Civil Procedure, give notice of sale pursuant to Section 701.540 of the Code of Civil Procedure without relevying on the property. (6) As provided elsewhere in this division. (b) Except as provided in Section 8836, the lot or parcel may not be sold unless the amount to be paid pursuant to the bid equals or exceeds the sum of all of the following amounts: (1) The amount of the judgment with costs and interest thereon. (2) Costs and interest on the judgment accruing after issuance of the writ pursuant to which the sale is conducted. (3) The levying officer's costs. (4) Any other amounts which are required by law to be bid in order that the lot or parcel may be sold. (c) The city may bid at the price provided for by subdivision (b) by giving the levying officer a written receipt crediting all or part of the amount required to satisfy the judgment, except that the city shall pay all of the following amounts in cash or by certified or cashier's check: (1) The levying officer's costs remaining unsatisfied. (2) The amount of any preferred labor claims. (3) Exempt proceeds. (4) Any other claim that is required by law to be satisfied. (d) If the city becomes the purchaser pursuant to bid as provided for by subdivision (c), the city shall pay the amount that is required to satisfy the judgment into the redemption fund within 24 months of the date of the foreclosure sale. From the amount that the city is required to pay into the redemption fund, the city shall reimburse the special reserve fund, if any, the amount, if any, of funds advanced from the special reserve fund to the redemption fund to cover delinquent installments of the assessment or reassessment and interest with respect to the lot or parcel of property which is sold. To the extent that the city has advanced funds other than, or in addition to, funds from a special reserve fund and the funds are included in the judgment, the obligation of the city to pay into the redemption fund is reduced by a corresponding amount. (e) Notwithstanding subdivision (d), the city is not required to pay into the redemption fund any amount that exceeds in the aggregate the sum of all of the following: (1) The amount required to bring current delinquent installments of the assessment or reassessment and interest with respect to which the lot or parcel of property is sold. (2) Simple interest on all the amounts from the dates of delinquencies until the date of sale, at the rate or rates of the bonds. (f) If the lot or parcel of property is sold at the execution sale to a purchaser other than the city, the city shall pay the sale proceeds that it receives into the redemption fund. From the amount that the city is required to pay into the redemption fund, the city shall reimburse the special reserve fund, if any, the amount, if any, of funds advanced from the special reserve fund to the redemption fund to cover delinquent installments of the assessment or reassessment and interest with respect to the lot or parcel of property which is sold. If the special reserve fund, if any, is thereby reimbursed, the city may reimburse other funds advanced by the city to cover delinquent installments and interest, and may pay interest and penalties, costs, fees, and other charges, to the extent that they are included in the sale proceeds received. (g) Notwithstanding subdivision (f), attorney fees and costs awarded by the judgment and postjudgment interest are not required to be paid into the redemption fund. (h) The foreclosure action shall be governed and regulated by this division, and where not in conflict with this division, by the applicable laws of this state.


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


8833.5. At any time after the tax collector has been relieved of further duty with regard to amounts charged against him or her on account of the assessments or reassessments described by Section 8833 and prior to a judgment of foreclosure, the city shall dismiss the foreclosure action upon payment of the sum of all of the following amounts: (a) The amount of any delinquent installments of principal or interest of the assessment or reassessment, together with interest and penalties, costs, fees, and other charges accrued thereon to the same extent that they accrue against real property for nonpayment of general property taxes, to the date of payment. (b) Costs of suit, including, but not limited to, service and recording fees and the costs of abstract or report of search of, or litigation guaranty with respect to, all claims of interest in the land. (c) Attorneys fees authorized by the city. (d) The tax collector's costs authorized by Section 8833.


8834. The foreclosure action shall be brought in the name of the city or a trustee employed on behalf of the bondholders pursuant to Section 8830, and may be brought at any time prior to the expiration of four years subsequent to the last maturity of the principal of bonds secured by the assessment or reassessment. The complaint may be brief and include substantially only the following allegations with reference to the assessment or reassessment sought to be collected: (a) That, on a date stated, the legislative body passed its resolution ordering certain work to be done, without describing the same. (b) If the assessment was levied pursuant to the Improvement Act of 1911 (Division 7 (commencing with Section 5000)), that work was done pursuant to the resolution. (c) That an assessment to pay the cost of the work was duly made and was authorized to be collected, but remained unpaid on a stated date. (d) That certain property (describing it) was assessed or reassessed a stated amount and that bonds upon the security of the assessment or reassessment were duly issued under this division, giving the date or dates of the bonds, their interest rate or rates, and the number of years the last maturity of the bonds were to run, but it is not necessary to state the amount, number, denomination, or other terms of the bonds. (e) That, on a date stated, a certain sum came due against the described property on the assessment or reassessment and had not been paid and that the legislative body, or a trustee acting on behalf of the bondholders, had ordered the action to foreclose.


8835. The amount of penalties, costs and interest due shall be calculated up to the date of the judgment.


8836. (a) In the event a lot or parcel of property fails to sell for the minimum price required by Section 8832, the city may petition the court to modify its judgment and authorize the property to be sold at a lesser minimum price or without a minimum price. (b) Written notice of hearing on the petition under subdivision (a) shall be given by certified or registered mail to all registered owners of any outstanding bonds secured, in whole or in part, by the delinquent assessment or reassessment, to the original purchaser of any of the bonds from the city, to the city treasurer, and to any authenticating agents, transfer agents, registrars, and paying or other agents of the city appointed with respect to any of the bonds. If any of the outstanding bonds are payable to bearer and not registered to other than bearer, notice of the hearing shall also be given by publication at least once in a financial publication with national circulation and additionally as the court shall reasonably require. The hearing shall be held not earlier than 10 days after the notice is given. (c) The court may, after a hearing held pursuant to notice as provided for by subdivision (b), modify the judgment and authorize the property to be sold at a lesser minimum price or without a minimum price, if the court determines, based on the evidence introduced at the hearing, any of the following: (1) Sale at the lesser minimum price or without a minimum price will not result in an ultimate loss to the bondholders. (2) Owners or holders of 75 percent or more of the outstanding bonds, by principal amount, have consented to the petition and the sale will not result in an ultimate loss to the nonconsenting bondholders. (3) Owners or holders of 75 percent or more of the outstanding bonds, by principal amount, have consented to the petition and all of the following apply: (A) By reason of determination pursuant to Section 8769, the city is not obligated to advance available funds to cure a deficiency. (B) No bids equal to or greater than the minimum price have been received at the foreclosure sale. (C) No funds remain in the special reserve fund, if any. (D) The city has reasonably determined that a reassessment and refunding proceeding is not practicable, or has in good faith endeavored to accomplish a reassessment and refunding and has not been successful, or has completed reassessment and refunding arrangements which will, to the maximum extent feasible, minimize the ultimate loss to the bondholders. (E) No other remedy acceptable to owners or holders of 75 percent or more of the outstanding bonds, by principal amount, is reasonably available. (d) The assessment or reassessment lien upon property sold pursuant to this section at a lesser price than the minimum price shall be reduced by the difference between the minimum price and the sale price. (e) The court shall permit participation by the bondholders in its consideration of the petition as necessary to its determinations. (f) Neither the property owner nor the holder of a security interest in the property, nor any other defendant in the foreclosure action, nor any agent thereof, may purchase the property at the foreclosure sale for less than the minimum price determined pursuant to Section 8832. Each purchaser at less than the minimum price shall certify in writing to the levying officer at the sale the purchaser's compliance with the requirements of this subdivision. (g) The court may make provisions for the payment of attorney fees and costs incurred in proceedings pursuant to this section as the court deems proper, and need not require that the fees and costs be paid out of the proceeds of any sale authorized pursuant to this section.


8837. This section applies if delinquent assessment installments, together with any penalties, interest, and costs, are collected through the sale of the property by the tax collector pursuant to Chapter 7 (commencing with Section 3691) of Part 6 of Division 1 of the Revenue and Tax Code. (a) If the property is sold for at least the total amount necessary to redeem plus costs, as defined in Section 3698.5 of the Revenue and Taxation Code, the sale of the property shall extinguish the delinquent assessment installments, interest, penalties, and costs included in the sale price. (b) If the property is sold for less than the total amount necessary to redeem plus costs, as defined in Section 3698.5 of the Revenue and Taxation Code, the following applies: (1) The portion of the sales price paid by the tax collector to the local agency on account of the delinquent assessment installments shall be credited by the local agency first to delinquent interest and redemption penalties, and then to delinquent principal. (2) The remainder of the delinquent assessment installments and redemption penalties, if any, shall remain due and owing. (3) Redemption penalties shall continue to accrue on remaining unpaid delinquent assessment installments. (4) The remaining unpaid amount, with penalties, may be added as postjudgment delinquencies to any existing unsatisfied foreclosure judgment against the property, or may be collected in a new foreclosure action filed pursuant to this chapter.


Part 14.5. Title Taken By Purchaser

Ca Codes (shc:8840) Streets And Highways Code Section 8840



8840. Except as otherwise provided in Section 8836 and notwithstanding any other provision of law, the purchaser of property subject to delinquent installments of principal or interest on an assessment or reassessment at the tax collector's sale pursuant to Part 13 (commencing with Section 8800), or at a foreclosure sale by order of court pursuant to Part 14 (commencing with Section 8830), shall take the property subject to all future installments of principal and interest on any assessment or reassessment which are not due and payable at the time of the tax collector's sale pursuant to Part 13 (commencing with Section 8800), or at the time of the judgment pursuant to Part 14 (commencing with Section 8830), without regard to the priority of the lien thereof.


Part 15. Miscellaneous Provisions

Ca Codes (shc:8850-8851) Streets And Highways Code Section 8850-8851



8850. No bond, assessment, or installment thereof or of the interest or penalties thereon, or declaration of default or deed shall be held invalid for any error in the computation of the proper amount due on the same, if the error is found to be comparatively negligible, or is found to be in favor of the owner of the real property affected thereby.


8851. Upon the application of the legislative body or of any holder or other interested party, the Commissioner of Financial Institutions shall examine into the regularity of the issuance of bonds under this division and the sufficiency of the security provided for the payment thereof and if satisfied therewith he or she may certify the same as suitable for investment by savings banks and trustees whereupon the bonds may be used for investment of savings deposits and trust funds. The cost of any such examination may on approval of the legislative body be paid out of any surplus money in the redemption fund not required for the payment of the interest or principal of the bonds.


Part 16. Special Security Fund

Ca Codes (shc:8880-8887) Streets And Highways Code Section 8880-8887



8880. In any proceedings leading to the issuance of bonds pursuant to this division, the legislative body may include, as an incidental expense of the proceedings, an amount to create a special reserve fund for the bonds. The amount so provided shall not exceed 10 percent of the total amount of assessments to be levied under the proceedings.


8881. Where a special reserve fund is created for a bond issue, the assessment levied on any parcel for the payment of the bond issue shall be reduced upon the payment, in whole or in part, of the assessment pursuant to provisions for either (1) cash payments of assessments prior to the issuance of the bonds or (2) advance payment of assessments following the issuance of the bonds. The proportional reduction on the assessment shall equal the ratio of the total amount initially provided for the special reserve fund to the total amount originally assessed in the proceedings for the bond issue.

8882. Upon receipt of the bond sale proceeds, the amount so provided for the special reserve fund pursuant to Section 8880 shall be transferred to the fund. The special reserve fund shall be identified by the name of the proceedings under which the bonds are issued and shall constitute a trust fund for the benefit of the bondholders, subject to and to be administered in accordance with the provisions of this part.


8883. The money in the special reserve fund shall be available for transfer into the redemption fund for the bonds pursuant to Part 13 (commencing with Section 8800). The amount so advanced shall be reimbursed from the proceeds of redemption or sale of the parcel for which payment of delinquent installments was made from the special reserve fund.


8884. Whenever an assessment is paid off following the issuance of bonds, there shall be transferred, from the special reserve fund to the redemption fund, an amount equal to the reduction in the assessment determined pursuant to Section 8881.


8885. Whenever the balance in the special reserve fund is sufficient to retire all remaining outstanding bonds in the issue, whether by advance retirement or otherwise, collection of the principal and interest on the assessments shall be discontinued and the special reserve fund shall be liquidated in retirement of the bonds. In the event that the balance in the fund at the time of liquidation exceeds the amount required to retire all outstanding bonds in the issue, the excess shall be apportioned to each parcel upon which the individual assessment remained unpaid at the time the balance in the reserve fund was sufficient to retire all outstanding bonds in the issue. The payments shall be made in cash to the respective owners of the parcels except that, if the excess is not greater than one thousand dollars ($1,000), the excess may be transferred to the general fund of the entity conducting the proceedings.

8886. Money in the special reserve fund may be temporarily invested in any authorized investments pursuant to Article 1 (commencing with Section 53600) of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code, or in any authorized investments pursuant to law in the case of money resulting from assessments levied for bonds authorized to be issued after the effective date of the amendments to this section enacted during the 1981-82 Regular Session of the Legislature, provided that the maturities thereof shall not be later than the date on which the money may be required for the redemption fund pursuant to this part. Any income realized from such investments shall be credited to the special reserve fund, and any loss or expense resulting from such investment shall be charged to that fund.


8887. Notwithstanding any other provision in this part, for the purposes of (1) assuring that the bonds to be issued will not become arbitrage bonds as defined in the Internal Revenue Code of 1954 (Title 26 of the United States Code) and regulations promulgated thereunder by the Department of Treasury, and (2) providing for reduction of the amount of money in the special reserve fund during the term of the bonds, the legislative body may, by resolution adopted prior to the issuance of bonds under this division, provide that money in the special reserve fund, including investment income, shall be used, in the amounts and at the times as the legislative body may determine, for either or both of the following: (a) Credit upon the assessment in the manner provided in Section 10427.1. (b) Transfer to the redemption fund for advance retirement of the bonds pursuant to this division. The resolution may specify the terms and conditions, as the legislative body may determine to be reasonable, with respect to its authorization of either or both of the uses.


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