BILL ANALYSIS
AB 1873
Page 1
ASSEMBLY THIRD READING
AB 1873 (Huffman)
As Amended May 28, 2010
Majority vote
NATURAL RESOURCES 6-3 APPROPRIATIONS 12-0
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|Ayes:|Chesbro, Brownley, De |Ayes:|Fuentes, Ammiano, |
| |Leon, Hill, Huffman, | |Bradford, |
| |Skinner | |Charles Calderon, Coto, |
| | | |Davis, Monning, Ruskin, |
| | | |Skinner, Solorio, |
| | | |Torlakson, Torrico |
| | | | |
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SUMMARY : Authorizes the State Treasurer, the Public Employees
Retirement System Board (CalPERS), and the State Compensation
Insurance Fund (SCIF) to purchase bonds issued to finance the
installation of distributed generation renewable energy sources
or energy or water efficiency improvements through local
property assessed clean energy (PACE) programs, and makes
related findings.
EXISTING LAW :
1)Authorizes cities, counties and other public agencies to
designate areas within which legislative bodies and willing
property owners may enter into contractual assessments to
finance the installation of distributed generation renewable
energy sources or energy or water efficiency improvements.
2)States legislative intent that the authorization listed above
should be used to finance the installation of distributed
generation renewable energy sources and energy or water
efficiency improvements that are fixed to residential,
commercial, industrial, agricultural, and other real property.
Prohibits the authorization from being used to finance the
purchase of appliances or installations not fixed to real
property.
3)Makes findings and declarations concerning the need for energy
and water efficiency improvements in order to address global
climate change, the deterrent effect of high up-front costs on
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making those improvements, and the need to authorize an
alternative procedure for authorizing assessments to finance
the cost of energy efficiency improvements in order to make
them more affordable and promote their installation.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor absorbable administrative costs, to the extent
CalPERS, the SCIF and the Treasurer's Office choose to invest in
PACE bonds as authorized by the bill.
COMMENTS : Under PACE programs, the property owner or owners
within a designated area choose to assess themselves for the
cost of energy efficiency improvements or distributed renewable
energy, such as solar. The local government then provides the
up-front funds for the project, and the property owners pay an
annual assessment until those funds, plus interest, are repaid.
The underlying purpose is to create a means by which a project
that provides both a public benefit and an incidental benefit to
particular property owners can be financed without imposing the
cost on property owners in other parts of the city who derive no
benefit.
Chartered cities have broad authority to create special
assessment districts. Berkeley was the first city in the nation
to launch a PACE program and used a special assessment district
to establish a financing mechanism in which individual property
owners can voluntarily participate and repay improvements
through a special property tax assessment.
AB 811 (Levine), Chapter 159, Statutes of 2008, authorizes
general law cities to provide up-front financing to property
owners to install solar or other renewable energy-generating
devices or make specified energy efficiency improvements to
their properties through a system of contractual assessments.
Prior to AB 811, contractual assessments were only authorized
for certain types of public works projects (e.g., under
grounding of power lines or installation of streetlights).
AB 474 (Blumenfield), Chapter 444, Statutes of 2009, adds water
efficiency improvements to the list of improvements that can be
paid for through a contractual assessment between a willing
property owner and a public agency.
This bill authorizes the Treasurer, CalPERS, and SCIF to
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purchase local AB 811 bonds, which may lower the interest rates
that local governments must charge homeowners, while
simultaneously creating a new, secure income stream for the
state of California. CalPERS' general authority already permits
investment in this type of bond, as long as they find the
investment consistent with their fiduciary duty.
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092
FN: 0004700