BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 474|
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THIRD READING
Bill No: AB 474
Author: Blumenfield (D), et al
Amended: 6/25/09 in Senate
Vote: 27 - Urgency
SENATE LOCAL GOVERNMENT COMMITTEE : 3-1, 7/8/09
AYES: Wiggins, Kehoe, Wolk
NOES: Aanestad
NO VOTE RECORDED: Cox
ASSEMBLY FLOOR : 61-14, 5/21/09 - See last page for vote
SUBJECT : Contractual assessments: water efficiency
improvements
SOURCE : Author
DIGEST : This bill expands the authorization that allows
public agencies to enter into contractual assessments to
finance the installation of specified improvements to now
include water efficiency improvements.
ANALYSIS : Current law authorizes cities and counties to
use "contractual assessments" to finance public
improvements on developed parcels when the costs and time
delays to create an assessment district will be
prohibitively large relative to the cost of the public
improvements to be financed (SB 837 [McQuorqudale], Chapter
1388, Statutes of 1987). Contractual assessments may be
levied only with the free and willing consent of the
CONTINUED
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affected property owners.
To use contractual assessments, a city council or county
board of supervisors must adopt a resolution, which:
1. Determines that it would be convenient, advantageous,
and in the public interest to designate an area within
which officials and property owners may enter into
contractual assessments and make related financing
arrangements.
2. Identifies the kinds of public works which may be
financed.
3. Describes the boundaries of the area within which
contractual assessments may be entered into.
4. Describes the proposed financing arrangements.
5. States the time and place for a public hearing.
6. Directs an official to prepare a detailed report about
the contractual assessment program.
The report on the proposed contractual assessment program
must contain:
1. A map of the area where contractual assessments will be
offered.
2. A draft contract specifying the terms and conditions.
3. A list of the types of facilities which may be financed.
4. The official authorized to enter into contractual
assessments on behalf of the county or city.
5. The maximum aggregate dollar amount of contractual
assessments.
6. A method for prioritizing requests from property owners
for financing.
7. A plan for raising a capital amount required to pay for
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work performed pursuant to contractual assessments.
After holding a public hearing, the legislative body may
adopt a resolution confirming the program as detailed in
the report, may confirm a modified version of the report,
or may abandon the proceedings.
Last year, legislators authorized city and county officials
to use contractual assessments to finance the installation
of distributed generation renewable energy sources or
energy efficiency improvements to residential, commercial,
industrial, or other real property (AB 811 [Levine],
Chapter 159, Statutes of 2008). Local officials also want
to use contractual assessments to finance water efficiency
improvements on private property.
This bill:
1.Authorizes the use of contractual assessments to finance
the installation of water efficiency improvements that
are permanently fixed to residential, commercial,
industrial, agricultural, or other real property.
2.Specifies that, 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 statute.
3.Specifies that, 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.
4.Specifies that, for the purpose of financing other
public improvements, "public agency" means a city as
defined by the Improvement Act of 1911.
5.Requires the resolution of intention to authorize
contractual benefit assessments to include a brief
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description of criteria for determining the
creditworthiness of a property owner.
6.Requires a legislative body to provide written notice,
at least 60 days before adopting a resolution making
contractual benefit assessment financing available to
property owners, to any entity that provides energy or
water within the boundaries of the area within which
contractual assessments may be entered into. The bill
also expresses the intent of the Legislature that a
public agency in the process of establishing an
assessment program should use a good faith effort to
provide advance notice of the proposed program to water
and electric service providers in the relevant service
area to allow the most efficient coordination and
collaboration between the public agency and water and
electric service providers.
7.Requires a legislative body levying a contractual
assessment to designate an office, department, or bureau
of the local agency to be responsible for:
A. Preparing the current roll of assessment
obligations by assessor's parcel number on property
subject to a voluntary contractual assessment.
B. Establishing procedures to promptly respond to
inquiries concerning current and future estimated
liability for a voluntary contractual assessment.
C. Furnishing a Notice of Voluntary Contractual
Assessment to any individual requesting the notice
or any owner of property subject to a voluntary
contractual assessment levied by the local agency
within five working days of receiving a request for
the notice.
8.Disclaims the public agency's liability for any estimate
of future voluntary assessment liability that is
inaccurate, or for any failure of any seller to request
notice or provide notice to a buyer.
9.Prescribes the form and content of the Notice of
Voluntary Contractual Assessment and provides that
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sellers can use the Notice to satisfy statutory notice
requirements. The local agency may charge a fee of up
to $15 for the service of furnishing a Notice of
Voluntary Contractual Assessment.
10.Identifies statutory provisions that apply to the levy
and collection of voluntary contractual assessments,
including provisions related to lien priority.
11.Specifies the form of the notice of the existence and
amount of each voluntary contractual assessment that a
clerk must record with the county recorder of the county
in which a lot or parcel subject to a voluntary
contractual assessment is located.
12.Contains a legislative finding and declaration that
voluntary contractual assessments are not subject to the
provisions of Articles XIIIC and XIIID of the California
Constitution or specified implementing statutes.
13.Replaces the term "contractual assessment" with the term
"voluntary contractual assessment" in numerous statutes.
Comments
Building on the precedent set by last year's Levine bill,
local governments want to offer benefit assessment
financing programs to promote water efficiency. Up-front
installation costs can deter property owners from making
water efficiency improvements. Using contractual benefit
assessments, local agencies can help finance these
investments at low interest rates. Property owners who
voluntarily enter into a contractual assessment agreement
for water efficiency improvements will realize immediate
savings on their water bills while paying off their costs
over time on their property tax bills. By reducing water
consumption, the voluntary contractual benefit assessment
programs authorized by this bill will benefit residents
throughout California.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 7/9/09)
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Association of California Water Agencies
Burbank Water and Power
California Association of Realtors
California Association of Sanitation Agencies
California Business Properties Association
California Chamber of Commerce
California Landscape Contractors Association
California Municipal Utilities Association
California Special Districts Association
California Water Association
Cities of: Canyon Lake, Roseville, and San Diego
Corona Department of Water and Power
East Bay Municipal Utility District
Eastern Municipal Water District
Green Plumbers
Inland Empire Utilities Agency
Irvine Ranch Water District
Los Angeles Business Council
Metropolitan Water District of Southern California
Placer County Water Agency
Planning and Conservation League
PolyTurf Inc.
Regional Council of Rural Counties
Regional Legislative Alliance of Venture and Santa Barbara
Counties
Sacramento Municipal Utility District
Sierra Club, Sonoma County Water Agency
Three Valleys Municipal Water District,
Tree People
Valley Industry and Commerce Association
Water Reuse Association
Western Riverside Council of Governments
World Recycling Surfacing Group
ARGUMENTS IN SUPPORT : According to the author's office,
this bill addresses our serious water shortage. Across the
state we are facing: (1) record low rainfalls; (2) a
possible third consecutive year of drought; (3) reservoirs
at 50 percent of normal capacity; and (4) mandatory water
rationing and restrictions in some communities. This bill
is one approach that can be taken to incentivize more
people to conserve water in their homes and businesses. It
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is a very simple concept. It authorizes public agencies
and water districts to provide upfront financing for the
installation of water use efficiency improvements, such as
cisterns, purple pipes for recycled water, or drip
irrigation. A property owner would agree to be assessed
over time to pay back the loan, and in the meantime reap
the savings on their water bill. This bill expands on a
bill enacted last year that established a similar program
for financing energy improvements, and builds on that
existing framework to include water conservation. It is a
voluntary approach on all fronts, voluntary for the public
agencies to offer the financing; voluntary for property
owners to participate. It is supported by numerous
Chambers of Commerce and business interests, and many water
agencies and environmental organizations.
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Bill Berryhill, Tom
Berryhill, Block, Blumenfield, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Chesbro, Conway,
Cook, Coto, Davis, De La Torre, De Leon, Emmerson, Eng,
Evans, Feuer, Fletcher, Fong, Fuentes, Furutani,
Galgiani, Gilmore, Hall, Hayashi, Hernandez, Hill, Huber,
Huffman, Jones, Krekorian, Lieu, Bonnie Lowenthal, Ma,
Mendoza, Monning, Nava, Nestande, John A. Perez, V.
Manuel Perez, Portantino, Price, Ruskin, Salas, Skinner,
Smyth, Solorio, Audra Strickland, Swanson, Torlakson,
Torres, Torrico, Tran, Yamada, Bass
NOES: Adams, Anderson, Blakeslee, DeVore, Hagman, Harkey,
Jeffries, Knight, Logue, Miller, Niello, Nielsen, Silva,
Villines
NO VOTE RECORDED: Duvall, Fuller, Gaines, Garrick, Saldana
AGB:do 7/9/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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