BILL ANALYSIS
AB 1873
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1873 (Huffman)
As Amended August 9, 2010
Majority vote
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|ASSEMBLY: |52-24|(June 2, 2010) |SENATE: |24-10|(August 18, |
| | | | | |2010) |
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Original Committee Reference: NAT. RES.
SUMMARY : Authorizes the State Treasurer, the California 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. Adds a new provision to the Joint
Exercise of Powers Act authorizing a joint powers authority
(JPA) to purchase, and a local agency to sell, the right, title,
and interest in an assessment contract pursuant to an agreement
between the JPA and the local agency.
The Senate amendments add a new provision to the Joint Exercise
of Powers Act authorizing a JPA to purchase, and a local agency
to sell, the right, title, and interest in an assessment
contract pursuant to an agreement between the JPA and the local
agency. Senate Floor amendments of 8/9/10 add double-jointing
language to avoid a chaptering-out problem with SB 1407. This
bill will only become operative if both SB 1407 and this bill
become effective on or before January 1, 2011 and if this bill
is enacted after SB 1407.
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
AB 1873
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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
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.
AS PASSED BY THE ASSEMBLY , this bill authorized the Treasurer,
CalPERS, and SCIF to purchase bonds issued to finance the
installation of distributed generation renewable energy sources
or energy or water efficiency improvements through PACE
programs, and makes related findings.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, this bill has
negligible state costs.
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.
This bill authorizes the Treasurer, CalPERS, and SCIF to
purchase local AB 811 bonds, which may lower the interest rates
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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 : Jessica Westbrook / NAT. RES. / (916)
319-2092
FN: 0006261