BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 188|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                    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:










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          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  








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            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  








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            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


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