BILL ANALYSIS Ó
SB 1233
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Date of Hearing: August 10, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1233
(McGuire) - As Amended August 2, 2016
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|Policy |Local Government |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill establishes the Water Bill Savings Act.
Specifically, this bill:
1)Authorizes joint powers authorities (JPAs) to provide funding
to customers of a local agency or its publicly owned utility
for water efficiency improvements on the customer's private
property.
2)Creates the process for establishing a financing program which
would allow a JPA to provide the customer of a local agency or
its publicly owned utility up front financing for a water
efficiency improvement that the customer would then be
required to repay by an efficiency charge on the customer's
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water bill.
3)Authorizes JPAs to pool revenues generated by water efficiency
charges paid by participating customers to issue bonds,
pursuant to the Marks-Roos Act.
4)Requires the Department of Water Resources (DWR) to provide
ongoing oversight of activities associated with the bill's
provisions, including monitoring an authority's administration
of an efficiency improvement financing program.
FISCAL EFFECT:
1)One-time costs to DWR of up to $400,000 (GF) to analyze the
existing CalConserve Program, create a list of acceptable
efficiency projects, and establish reporting requirements.
Actual costs will depend on the level of public input required
(public meetings, stakeholder workshops) and whether
regulations are required.
2)Ongoing annual costs to DWR in the range of $50,000 to $80,000
(GF) to review annual reports and maintain oversight.
COMMENTS:
1)Purpose. According to the author, "This bill will create a
broad scale regional response to California's water supply
issues by extending existing Marks Roos Local Bond Pooling Act
authority used by JPAs to fund utility projects to voluntary
customer water efficiency projects installed on private
property and paid for by participants."
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Supporters contend that this bill will create another tool for
local governments to respond to drought that is regionally
efficient, financially sustainable, and available to all
municipal utilities, large and small. Additionally, they
assert this bill will help people save money on water, while
reducing wasted water, and provide a voluntary tool to meet
state conservation mandate.
2)Background. Modeled after a financing program in the City of
Berkeley, in 2008, the Legislature granted the statutory
authority to cities and counties to provide up-front financing
to property owners to install renewable energy sources or
energy efficiency improvements that are permanently fixed to
their properties, which is repaid through the property tax
bill. The Legislature has expanded PACE (Property Assessed
Clean Energy) for residential and commercial property owners
as an option to pay for renewable energy upgrades, energy and
water efficiency retrofits, water efficiency improvements, and
other specified improvements for their homes or buildings.
Local agencies create PACE assessment districts or establish a
Community Facilities District (CFD), allowing the local agency
to issue bonds to finance the up-front costs of improvements.
In turn, property owners enter into a voluntary contractual
assessment agreement with the local agency or agree to annex
their property into a CFD to re-pay the bonds via an
assessment or special tax, secured by a priority lien, on
their property tax bill. The intent of the program is that
the assessment or parcel tax remains with the property, even
if it is sold or transferred, and the improvements must be
permanently fixed to the property.
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In California, there are several models available to local
governments in administering a PACE program. Only the
counties of Sonoma and Placer administer their own PACE
programs. The majority of local governments contract with a
private third-party or join a JPA, which contracts with a
private third-party to carry out their PACE programs.
Additionally, AB 2636 (Gatto), Chapter 825, Statutes of 2014,
created the CalConserve Water Use Efficiency Revolving Fund,
administered by DWR, to be a sustainable funding source for
water use efficiency projects. The Legislature allocated $10
million to provide loans to local agencies to provide water
efficiency updates to eligible residents at no upfront costs,
and for local agencies to implement water use efficiency loan
programs through on-bill financing.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081
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