BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 120|
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                              UNFINISHED BUSINESS


          Bill No:  SB 120
          Author:   Lowenthal (D), et al
          Amended:  8/24/09
          Vote:     21

           
           SENATE JUDICIARY COMMITTEE  :  3-2, 3/31/09
          AYES: Corbett, Florez, Leno
          NOES: Harman, Walters

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           SENATE FLOOR  :  23-14, 4/23/09
          AYES: Alquist, Calderon, Cedillo, Corbett, Correa,  
            DeSaulnier, Florez, Hancock, Kehoe, Leno, Liu, Lowenthal,  
            Negrete McLeod, Oropeza, Padilla, Pavley, Romero,  
            Simitian, Steinberg, Wiggins, Wolk, Wright, Yee
          NOES:  Aanestad, Ashburn, Benoit, Cogdill, Cox, Denham,  
            Dutton, Hollingsworth, Huff, Maldonado, Runner,  
            Strickland, Walters, Wyland
          NO VOTE RECORDED: Ducheny, Harman

           ASSEMBLY FLOOR  :  47-29, 09/01/09 - See last page for vote


           SUBJECT  :    Residential utility service

           SOURCE  :     Western Center on Law and Poverty


           DIGEST  :    This revises existing public utility termination  
          notice provisions, which currently apply only to the  
          multi-unit residential tenancies, to any residential  
                                                           CONTINUED





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          structure, including a single-family dwelling.

           Assembly Amendments  narrowed the scope of the bill.  As it  
          left the Senate, this bill would have clarified that  
          lenders foreclosing on rental properties are responsible  
          for the return of tenant security deposits.  Recent federal  
          legislation (S. 896) signed into law in May now provides  
          that foreclosers assume properties subject to the rights of  
          any bona fide residential tenants.  Thus, under federal  
          law, foreclosers are obligated to maintain properties in a  
          habitable condition, return deposits, and perform all the  
          other obligations required of landlords under state law.   
          Tenants, for their part, are required to pay rent and  
          follow the terms of the existing lease or rental agreement.

          The new federal law pre-empts state law and makes the  
          clarifications contained in this bill unnecessary.   
          Therefore, those sections were removed from the bill with  
          the following amendments:  (1) deleted provisions defining  
          landlord and tenant for purposes of governing tenancies  
          relating to, among other things, mortgage defaults, (2)  
          deleted provisions revising the governing of the transfer  
          or return of any security, (3) deleted definition of  
          "successor owner," (4) add provisions amending the Public  
          Utilities Act relative to individually or master metered  
          residential service in single family and multi-unit  
          facilities, (5) requires notice to tenants in arrears be in  
          English, Spanish, Chinese, Tagalog, Vietnamese, and Korean,  
          and (6) added a coauthor.

           ANALYSIS  :    Existing law:

          1.Requires any corporation, public utility, or district  
            that provides electrical, gas, heat, or water services to  
            residents in a multi-unit residential structure,  
            mobilehome park, or labor camp to make good faith effort  
            to inform residential occupants of any intent to  
            terminate services, as specified depending upon whether  
            the units single- or mastered-units. 

          2.Permits a residential occupant of a multi-unit dwelling  
            to assume responsibility for paying service charges from  
            a public utility, corporation, or district, as specified,  
            and to deduct those charges from any rent owed if the  







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            services are supposed to be included in the rental price.  


          3.Provides that any person engaged in a trade or business,  
            who negotiates primarily in Spanish, Chinese, Tagalog,  
            Vietnamese, or Korean, in the course of entering into a  
            rental or lease agreement, shall deliver to the other  
            party a translation of the agreement in the language in  
            which the agreement was negotiated. 

          4.Provides, under the federal "Protecting Tenants at  
            Foreclosure Act of 2009," signed by President Obama on  
            May 20, 2009, that, in the case of foreclosure on a  
            federally-related mortgage loan, or on any dwelling or  
            residential property after the date of enactment, the  
            successor in interest shall: a) give any bona fide tenant  
            on the affected property at least 90 days notice to  
            vacate; and, b) take the property subject to the rights  
            of any bona fide tenant. 

          5.This provision will sunset on December 31, 2012. 

          This bill: 

          1.Provides that whenever a corporation that furnishes  
            electrical, gas, heat, or water services to any  
            residential occupants, if the owner, manager, or operator  
            of the residential unit is listed by the corporation as  
            the customer of record, the corporation must make every  
            good faith effort to inform the residential occupants, by  
            means of a specified written notice, when the account is  
            in arrears, that service will be terminated at least 10  
            days prior to the termination, except as specified.  The  
            notice shall provide residents with specified information  
            regarding steps that they may take, including a statement  
            of the residents' right to obtain the utility service in  
            their own name and assume responsibility for payment of  
            any subsequent charges. Specifies that notice must be in  
            English, Spanish, Chinese, Tagalog, Vietnamese, and  
            Korean. 

          2.Applies the same provisions described above whenever a  
            public utility or district provides light, heat, water,  
            or power to residential occupants, including a single  







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            family dwelling, if the owner, manager, or operator of  
            the residential unit is listed by the public utility or  
            district as the customer of record. 

          3.Permits a tenant of any residential dwelling to assume  
            responsibility for payment for utility services provided  
            by a corporation, public utility, or district and to  
            deduct utility charges from any periodic rent owed, if  
            the rent amount includes charges for utility services.

           Prior Legislation  

          AB 2586 (Torrico, 2008), would have enacted a substantially  
          similar set of tenant protections.  This bill was vetoed.

          AB 1333 (Hancock, 2008), would have provided that the legal  
          owner of real property must pay the utilities provided to a  
          property or its tenants following a foreclosure under  
          specified circumstances.  This bill was vetoed.

          SB 1137 (Perata, Corbett, Machado), Chapter 69, Statutes of  
          2008, provided, among other things, that tenants of  
          foreclosed properties receive notice that their home is in  
          foreclosure, and receive a 60-day notice to quit, as  
          specified.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Assembly Appropriations Committee, minor  
          absorbable costs to the PUC for enforcement of the bill's  
          requirements with regard to the investor-owned utilities. 

           SUPPORT  :   (Verified  9/2/09)

          Western Center on Law and Poverty (source) 
          Asian Americans for Civil Rights & Equality
          California Alliance for Retired Americans
          California Rural Legal Assistance Foundation
          FamiliesFirst
          StoneSoup
          Tenants Together
          East Bay Municipal Utilities District








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           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          "SB 120 addresses an often overlooked aspect of the current  
          mortgage foreclosure crisis:  an increase in the number of  
          innocent renters who unexpectedly lose their utility  
          services as a result of foreclosure on a rented property.  

          "Landlords of distressed properties are sometimes unable to  
          pay utility bills that they agreed to pay, and shut-offs  
          occur.  Existing law allows tenants in multi-family  
          dwellings to begin service in their own names and deduct  
          payment from the amount of rent owed to the landlord.  This  
          bill would extend the current provisions to tenants living  
          in single-family homes and condominiums, because these are  
          the types of rentals most often affected by foreclosure.   
          The bill also requires that utilities must provide written  
          shut-off notices for tenants in all rental properties, not  
          just multifamily rental property, and it requires that the  
          notices in the six most common languages used in  
          California.  These changes in law will ensure that tenants  
          in a foreclosed property will not unfairly be denied  
          utility services."


           ASSEMBLY FLOOR  :  
          AYES: Arambula, Beall, Block, Blumenfield, Brownley,  
            Caballero, Carter, Chesbro, Coto, Davis, De La Torre, De  
            Leon, Eng, Evans, Feuer, Fong, Fuentes, Furutani,  
            Galgiani, Hall, Hayashi, Hernandez, Hill, Huber, Huffman,  
            Jones, Krekorian, Lieu, Bonnie Lowenthal, Ma, Mendoza,  
            Monning, Nava, John A. Perez, V. Manuel Perez,  
            Portantino, Ruskin, Salas, Saldana, Skinner, Solorio,  
            Swanson, Torlakson, Torres, Torrico, Yamada, Bass
          NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,  
            Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,  
            Fletcher, Fuller, Gaines, Garrick, Gilmore, Hagman,  
            Harkey, Jeffries, Knight, Logue, Miller, Nestande,  
            Niello, Nielsen, Silva, Smyth, Audra Strickland, Tran,  
            Villines
          NO VOTE RECORDED: Ammiano, Buchanan, Charles Calderon 


          RJG:nl  9/2/09   Senate Floor Analyses 








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                         SUPPORT/OPPOSITION:  SEE ABOVE

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