BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 188| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 188 Author: Hancock (D), et al. Amended: 4/14/15 Vote: 21 SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/8/15 AYES: Hertzberg, Nguyen, Bates, Beall, Hernandez, Lara, Pavley SENATE JUDICIARY COMMITTEE: 6-1, 4/21/15 AYES: Jackson, Moorlach, Hertzberg, Leno, Monning, Wieckowski NOES: Anderson SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/4/15 AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen SUBJECT: Municipal utility district: utility charges: delinquencies SOURCE: Author DIGEST: This bill repeals the January 1, 2016 sunset date in the statute that allows Municipal Utility Districts to impose liens on properties for delinquent water and wastewater service charges, and to collect delinquent charges through county property tax rolls. ANALYSIS: Existing law: SB 188 Page 2 1)Authorizes Municipal Utility Districts (MUDs) to collect delinquent residential water and sewer service charges through a lien or the local property tax roll, in the case of master-metered multi-family residential buildings in which the utility account is in the landlord's name. 2)Prohibits public utilities from recovering unpaid charges from a property owner if the charges are for residential utility service provided to a tenant under an account established by the tenant. 3)Prohibits MUDs from attaching a lien to publicly owned property. 4)Requires a MUD to do the following before collect delinquent charges through a lien or the property tax roll: a) Adopt a relevant resolution or ordinance. b) Prepare a report. c) Provide notice. d) Conduct a public hearing. e) File a final report with the county auditor; and f) Record a certificate in the office of the county recorder. 5)Provides that, as of January 1, 2016, a MUD's lien authority shall not apply to delinquent fees or charges for the SB 188 Page 3 furnishing of water or sewer service to a residential property. This bill: 1)Repeals the sunset date in the statute that allows MUDs to impose liens on properties for delinquent water and wastewater service charges, and to collect delinquent charges through county property tax rolls, extending MUDs' authority to continue its lien program indefinitely, extending MUD's lien authority indefinitely. 2)Makes an uncodified statement of the Legislature's intent not to change existing law regarding the protection provided to a property owner pursuant to Section 12822.6 of the Public Utilities Code, which prohibits a MUD from collecting delinquent charges or penalties from a property owner accrued by a residential tenant in a nonmaster-metered building. Comments 1)Purpose of the bill. The East Bay Municipal Utility District (EBMUD) provides drinking water for 1.3 million customers in Alameda and Contra Costa counties, and wastewater services for 650,000 customers in the East Bay. The lien authority granted by SB 1035 (Hancock, Chapter 485, Statutes of 2010) has given EBMUD an alternative to shutting off tenants' water when their landlords fail to pay the bill. SB 188 allows EBMUD to continue its lien program, granting MUDs the same statutory lien authority that other special districts have under California law. 2)Property owners' concerns. Since 1996, state law has prohibited MUDs from seeking to recover, from a property owner, unpaid charges or penalties for residential services provided to a tenant under an account established by the SB 188 Page 4 tenant (AB 1770, Brewer). Some property owners are concerned that, under a narrow reading of state law, MUDs could at some point use liens and property tax rolls to recover past due water and sewer charges from landlords when tenants fail to pay their utility bills. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee, there is no state fiscal impact. Any costs incurred by county officials related to the recording of liens and collection of delinquent service charges through the tax roll must be paid by the utility district, and are not reimbursable from the state. SUPPORT: (Verified5/5/15) Alameda County Association of California Water Agencies California Special Districts Association East Bay Municipal Utility District OPPOSITION: (Verified5/13/15) None received Prepared by:Toren Lewis / GOV. & F. / (916) 651-4119 5/15/15 10:29:51 **** END **** SB 188 Page 5