BILL NUMBER: AB 44 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 2, 2010
AMENDED IN SENATE JUNE 3, 2010
AMENDED IN ASSEMBLY JUNE 1, 2009
AMENDED IN ASSEMBLY MARCH 31, 2009
AMENDED IN ASSEMBLY MARCH 18, 2009
INTRODUCED BY Assembly Member Blakeslee
(Coauthor: Assembly Member Harkey)
(Coauthor: Senator Benoit)
DECEMBER 1, 2008
An act to amend Section 5898.20 Sections
5898.12, 5898.20, and 5898.22 of the Streets and Highways Code,
relating to public improvements.
LEGISLATIVE COUNSEL'S DIGEST
AB 44, as amended, Blakeslee. Improvement Act of 1911: contractual
assessments.
Existing law, the Improvement Act of 1911, authorizes the
legislative body of any public agency, as defined, to determine that
it would be convenient, advantageous, and in the public interest to
designate an area within the public agency, as specified, within
which authorized public agency officials and property owners may
enter into voluntary contractual assessments to finance the
installation of distributed generation renewable energy sources or
energy or water efficiency improvements that are permanently fixed to
real property, as specified. Existing law requires the legislative
body to make these determinations by adopting a resolution indicating
its intention to do so and requires that the resolution include
specified information and directs an appropriate public agency
official to prepare a prescribed report.
This bill would declare the intent of the Legislature in
regard to the total amount of assessments and taxes on a property as
a result of participation in the contractual assessment program. The
bill would define the term "permanently fixed," for purposes of
financing the installation of distributed generation renewable
energy sources, to include systems that are attached to specified
types of real property pursuant to an electricity purchase agreement
between the owner of the system and the owner of the assessed
property, if the agreement satisfies prescribed criteria.
This bill would also require the legislative body of a
public agency to establish criteria to ensure that a real property
owner is guaranteed the electricity from a distributed generation
renewable energy source in the event that the owner of the system
files for bankruptcy, as specified. The bill would also require the
legislative body of the public agency to make a finding that an
electricity purchase agreement funded with a contractual assessment
is structured to provide protections to the property owner in the
event of a bankruptcy of the owner of the system, as specified.
prescribed report to include criteria for determining
the creditworthiness of a property owner, as well as safeguards to be
used to limit the total annual property tax and assessments on the
property.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 5898.12 of the
Streets and Highways Code is amended to read:
5898.12. (a) It is the intent of the Legislature that this
chapter should be used to finance public improvements to lots or
parcels which are developed and where the costs and time delays
involved in creating an assessment district pursuant to other
provisions of this division or any other law would be prohibitively
large relative to the cost of the public improvements to be financed.
(b) It is also the intent of the Legislature that this chapter
should be used to finance the installation of distributed generation
renewable energy sources or energy efficiency improvements that are
permanently fixed to residential, commercial, industrial,
agricultural, or other real property.
(c) It is also the intent of the Legislature to address chronic
water needs throughout California by permitting voluntary individual
efforts to improve water efficiency. The Legislature further intends
that this chapter should be used to finance the installation of water
efficiency improvements that are permanently fixed to residential,
commercial, industrial, agricultural, or other real property,
including, but not limited to, recycled water connections, synthetic
turf, cisterns for stormwater recovery, and permeable pavement.
(d) It is also the intent of the Legislature that a public agency
in the process of establishing an assessment program, to the extent
feasible, use a good faith effort to provide advance notice of the
proposed program to water and electric service providers in the
relevant service area, as set forth in Section 5898.24, to allow the
most efficient coordination and collaboration between the public
agency and water and electric service providers.
(e) This chapter shall not be used to finance facilities for
parcels which are undergoing development.
(f) It is the intent of the Legislature that participation in an
assessment program will not result in a property owner being unable
to pay the property taxes and assessments on the property. The
Legislature further intends that a property owner should not be able
to participate in any program established pursuant to this chapter if
participation would result in the total amount of any annual
property taxes and assessments exceeding 5 percent of the property's
appraised market value.
(f)
(g) This chapter shall not be used to finance the
purchase or installation of appliances that are not permanently fixed
to residential, commercial, industrial, agricultural, or other real
property.
(g)
(h) Assessments may be levied pursuant to this chapter
only with the free and willing consent of the owner of each lot or
parcel on which an assessment is levied at the time the assessment is
levied.
SECTION 1. SEC. 2. Section 5898.20
of the Streets and Highways Code is amended to read:
5898.20. (a) (1) The legislative body of any public agency may
determine that it would be convenient and advantageous to designate
an area within the public agency, which may encompass the entire
public agency or a lesser portion, within which authorized public
agency officials and property owners may enter into voluntary
contractual assessments for public improvements and to make financing
arrangements pursuant to this chapter.
(2) The legislative body of any public agency may also determine
that it would be convenient, advantageous, and in the public interest
to designate an area within the public agency, which may encompass
the entire public agency or a lesser portion, within which authorized
public agency officials and property owners may enter into voluntary
contractual assessments to finance the installation of distributed
generation renewable energy sources or energy or water efficiency
improvements that are permanently fixed to real property pursuant to
this chapter.
(b) The legislative body shall make these determinations by
adopting a resolution indicating its intention to do so. The
resolution of intention shall include a statement that the public
agency proposes to make voluntary contractual assessment financing
available to property owners, shall identify the kinds of public
works, distributed generation renewable energy sources, or energy or
water efficiency improvements that may be financed, shall describe
the boundaries of the area within which voluntary contractual
assessments may be entered into, and shall briefly describe the
proposed arrangements for financing the program, including a brief
description of criteria for determining the creditworthiness of a
property owner. The resolution of intention shall state that it is in
the public interest to finance the installation of distributed
generation renewable energy sources or energy or water efficiency
improvements, or both, pursuant to paragraph (2) of subdivision (a),
if applicable. The resolution shall state that a public hearing
should be held at which interested persons may object to or inquire
about the proposed program or any of its particulars, and shall state
the time and place of the hearing. The resolution shall direct an
appropriate public agency official to prepare a report pursuant to
Section 5898.22 and to enter into consultations with the county
auditor's office or county controller's office in order to reach
agreement on what additional fees, if any, will be charged to the
city or county for incorporating the proposed voluntary contractual
assessments into the assessments of the general taxes of the city or
county on real property.
(c) As used in this chapter, each of the following terms shall
have the following meaning:
(1) "Efficiency improvements" means permanent improvements fixed
to residential, commercial, industrial, agricultural, or other real
property.
(2) "Legislative body" means the governing body of a public
agency.
(3) (A) For the purpose of financing the installation of water
efficiency improvements, "public agency" means a city, county, city
and county, municipal utility district, community services district,
sanitary district, sanitation district, or water district, as defined
in Section 20200 of the Water Code. The definition of "city" in
Section 5005 shall not apply to this subparagraph.
(B) For the purpose of financing the installation of distributed
generation renewable energy sources or energy efficiency
improvements, "public agency" means a county, city, city and county,
or a municipal utility district, an irrigation district, or public
utility district that owns and operates an electric distribution
system. The definition of "city" in Section 5005 shall not apply to
this subparagraph.
(C) For the purpose of financing the public improvements, "public
agency" means a city as defined in Section 5005.
(4) For the purpose of financing the installation of distributed
generation renewable energy sources, "permanently fixed" includes,
but is not limited to, systems attached to a residential, commercial,
industrial, agricultural, or other real property pursuant to an
electricity purchase agreement between the owner of the system and
the owner of the assessed property, if the electricity purchase
agreement contains all of the following provisions:
(A) The attached system is an eligible renewable energy resource
pursuant to the California Renewables Portfolio Standard Program
(Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1
of Division 1 of the Public Utilities Code).
(B) The term of the electricity purchase agreement is at least as
long as the term of the related assessment contract.
(C) The owner of the attached system agrees to install, maintain,
and monitor the system for the entire term of the electricity
purchase agreement.
(D) The owner of the attached system is not permitted to remove
the system prior to completion of the term of the contractual
assessment lien.
(E) After installation, the electricity is purchased by a single
payment using the funds from the contractual assessment program.
(F) The right to receive the electricity from the system is tied
to the ownership of the assessed real property and is required to be
automatically transferred with the title to the real property whether
the title is transferred by voluntary sale or
sale, judicial or nonjudicial foreclosure , or
by any other means.
(G) The system shall provide electricity to the assessed property
and to no other property or location.
(H) The property owner, and all successors in interest to the real
property, shall not use the electricity generated from the system
for any location other than the assessed property.
(I)
(G) The electricity purchase agreement identifies the
public agency that is a party to the assessment contract on the real
property as a third-party beneficiary of the electricity purchase
agreement until the assessment lien on the property has been fully
paid and, only until that time, prohibits amendments to the
electricity purchase agreement without the consent of the public
agency.
(J) The property owner is guaranteed, pursuant to criteria adopted
by the legislative body of a public agency as required by
subdivision (d), the electric power from the system.
(d) The legislative body of the public agency shall establish
criteria to ensure that a real property owner is guaranteed the
electricity from a distributed generation renewable energy source in
the event that the owner of the system files for bankruptcy, to the
extent permitted by federal law, prior to authorizing public agency
officials and property owners to enter into voluntary contractual
assessments for financing the installation of distributed generation
renewable energy sources attached to a residential, commercial,
industrial, agricultural, or other real property pursuant to a
contract that meets the provisions of paragraph (4) of subdivision
(c).
(e) The legislative body of the public agency shall make a finding
that any electricity purchase agreement funded with a contractual
assessment under this chapter is structured, to the extent permitted
by federal law, to provide protections to the property owner in the
event of a bankruptcy of the owner of the system. The protections may
include, but need not be limited to, the use of a special purpose
entity or other adequate security as required by the legislative
body.
SEC. 3. Section 5898.22 of the Streets
and Highways Code is amended to read:
5898.22. The report shall contain all of the following:
(a) A map showing the boundaries of the territory within which
voluntary contractual assessments are proposed to be offered.
(b) A draft contract specifying the terms and conditions that
would be agreed to by a property owner within the voluntary
contractual assessment area and the public agency.
(c) A statement of public agency policies concerning voluntary
contractual assessments including all of the following:
(1) Identification of types of facilities, distributed generation
renewable energy sources, or energy or water efficiency improvements
that may be financed through the use of contractual assessments.
(2) Identification of a public agency official authorized to enter
into voluntary contractual assessments on behalf of the public
agency.
(3) A maximum aggregate dollar amount of voluntary contractual
assessments.
(4) A method for setting requests from property owners for
financing through voluntary contractual assessments in priority order
in the event that requests appear likely to exceed the authorization
amount.
(5) A brief description of criteria for determining the
creditworthiness of a property owner, as well as safeguards that will
be used to ensure that the total annual property tax and assessments
on the property will not exceed 5 percent of the market value of the
property.
(d) A plan for raising a capital amount required to pay for work
performed pursuant to voluntary contractual assessments. The plan may
include amounts to be advanced by the public agency through funds
available to it from any source. The plan may include the sale of a
bond or bonds or other financing relationship pursuant to Section
5898.28. The plan shall include a statement of or method for
determining the interest rate and time period during which
contracting property owners would pay any assessment. The plan shall
provide for any reserve fund or funds. The plan shall provide for the
apportionment of all or any portion of the costs incidental to
financing, administration, and collection of the voluntary
contractual assessment program among the consenting property owners
and the public agency.
(e) A report on the results of the consultations with the county
auditor's office or county controller's office concerning the
additional fees, if any, that will be charged to the city or county
for incorporating the proposed voluntary contractual assessments into
the assessments of the general taxes of the city or county on real
property, and a plan for financing the payment of those fees.
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CORRECTIONS Text--Page 6.
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