Chapter 8. Deferral Of Assessments of California Streets And Highways Code >> Division 12. >> Chapter 8.

Notwithstanding any other law, the legislative body may determine, by resolution, to allow landowners to defer payment of their assessments pursuant to this chapter. This chapter may be used only if 80 percent or more of the area of the assessment district is developed for residential, commercial, or industrial use.

The legislative body may determine criteria that property owners must meet to qualify for deferral, and may determine procedures to ensure that the criteria are satisfied.

No deferral arrangement may restrict, reduce, or eliminate any remedy of a bondholder provided by this division in the event of a default.

Deferral may be provided through a year-to-year agreement between the city and an eligible property owner, which provides that the city will make assessment payments on behalf of the property owner for that year. No agreement shall commit the city to make deferral payments beyond one year. No agreement of this type shall be construed as a debt of the city.

Alternatively, the city may create a deferral fund for the assessment district, and deposit into the deferral fund an amount sufficient to pay the asessments being deferred for a specified period of time. Funds in the deferral fund may be invested as other city funds are invested, or in more restricted ways as determined by the legislative body. Any investment of the funds in the deferral fund shall comply with federal arbitrage rules.

A city may increase the principal amount of bonds issued under this division by an amount sufficient to fund a program pursuant to this chapter. The proceeds of bonds issued for this purpose shall be placed in the deferral fund created pursuant to Section 10704, and may be used for no other purpose than financing deferrals. The proceeds may be invested in interest-bearing securities of the federal government with maturities occurring on or before the maturity of the bonds issued pursuant to this section. Any investment of those bond proceeds shall comply with federal arbitrage rules (26 U.S.C. Sec. 103 and the rules adopted pursuant thereto).

The amount of any deferred assessments, including interest at a rate determined by the legislative body, shall be due and payable whenever the parcel of property upon which the assessment was levied is transferred, or at the time of last maturity of the bonds issued for the improvement pursuant to this division, or at other times as determined by the legislative body.