BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 120|
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UNFINISHED BUSINESS
Bill No: SB 120
Author: Lowenthal (D), et al
Amended: 8/24/09
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-2, 3/31/09
AYES: Corbett, Florez, Leno
NOES: Harman, Walters
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 23-14, 4/23/09
AYES: Alquist, Calderon, Cedillo, Corbett, Correa,
DeSaulnier, Florez, Hancock, Kehoe, Leno, Liu, Lowenthal,
Negrete McLeod, Oropeza, Padilla, Pavley, Romero,
Simitian, Steinberg, Wiggins, Wolk, Wright, Yee
NOES: Aanestad, Ashburn, Benoit, Cogdill, Cox, Denham,
Dutton, Hollingsworth, Huff, Maldonado, Runner,
Strickland, Walters, Wyland
NO VOTE RECORDED: Ducheny, Harman
ASSEMBLY FLOOR : 47-29, 09/01/09 - See last page for vote
SUBJECT : Residential utility service
SOURCE : Western Center on Law and Poverty
DIGEST : This revises existing public utility termination
notice provisions, which currently apply only to the
multi-unit residential tenancies, to any residential
CONTINUED
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structure, including a single-family dwelling.
Assembly Amendments narrowed the scope of the bill. As it
left the Senate, this bill would have clarified that
lenders foreclosing on rental properties are responsible
for the return of tenant security deposits. Recent federal
legislation (S. 896) signed into law in May now provides
that foreclosers assume properties subject to the rights of
any bona fide residential tenants. Thus, under federal
law, foreclosers are obligated to maintain properties in a
habitable condition, return deposits, and perform all the
other obligations required of landlords under state law.
Tenants, for their part, are required to pay rent and
follow the terms of the existing lease or rental agreement.
The new federal law pre-empts state law and makes the
clarifications contained in this bill unnecessary.
Therefore, those sections were removed from the bill with
the following amendments: (1) deleted provisions defining
landlord and tenant for purposes of governing tenancies
relating to, among other things, mortgage defaults, (2)
deleted provisions revising the governing of the transfer
or return of any security, (3) deleted definition of
"successor owner," (4) add provisions amending the Public
Utilities Act relative to individually or master metered
residential service in single family and multi-unit
facilities, (5) requires notice to tenants in arrears be in
English, Spanish, Chinese, Tagalog, Vietnamese, and Korean,
and (6) added a coauthor.
ANALYSIS : Existing law:
1.Requires any corporation, public utility, or district
that provides electrical, gas, heat, or water services to
residents in a multi-unit residential structure,
mobilehome park, or labor camp to make good faith effort
to inform residential occupants of any intent to
terminate services, as specified depending upon whether
the units single- or mastered-units.
2.Permits a residential occupant of a multi-unit dwelling
to assume responsibility for paying service charges from
a public utility, corporation, or district, as specified,
and to deduct those charges from any rent owed if the
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services are supposed to be included in the rental price.
3.Provides that any person engaged in a trade or business,
who negotiates primarily in Spanish, Chinese, Tagalog,
Vietnamese, or Korean, in the course of entering into a
rental or lease agreement, shall deliver to the other
party a translation of the agreement in the language in
which the agreement was negotiated.
4.Provides, under the federal "Protecting Tenants at
Foreclosure Act of 2009," signed by President Obama on
May 20, 2009, that, in the case of foreclosure on a
federally-related mortgage loan, or on any dwelling or
residential property after the date of enactment, the
successor in interest shall: a) give any bona fide tenant
on the affected property at least 90 days notice to
vacate; and, b) take the property subject to the rights
of any bona fide tenant.
5.This provision will sunset on December 31, 2012.
This bill:
1.Provides that whenever a corporation that furnishes
electrical, gas, heat, or water services to any
residential occupants, if the owner, manager, or operator
of the residential unit is listed by the corporation as
the customer of record, the corporation must make every
good faith effort to inform the residential occupants, by
means of a specified written notice, when the account is
in arrears, that service will be terminated at least 10
days prior to the termination, except as specified. The
notice shall provide residents with specified information
regarding steps that they may take, including a statement
of the residents' right to obtain the utility service in
their own name and assume responsibility for payment of
any subsequent charges. Specifies that notice must be in
English, Spanish, Chinese, Tagalog, Vietnamese, and
Korean.
2.Applies the same provisions described above whenever a
public utility or district provides light, heat, water,
or power to residential occupants, including a single
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family dwelling, if the owner, manager, or operator of
the residential unit is listed by the public utility or
district as the customer of record.
3.Permits a tenant of any residential dwelling to assume
responsibility for payment for utility services provided
by a corporation, public utility, or district and to
deduct utility charges from any periodic rent owed, if
the rent amount includes charges for utility services.
Prior Legislation
AB 2586 (Torrico, 2008), would have enacted a substantially
similar set of tenant protections. This bill was vetoed.
AB 1333 (Hancock, 2008), would have provided that the legal
owner of real property must pay the utilities provided to a
property or its tenants following a foreclosure under
specified circumstances. This bill was vetoed.
SB 1137 (Perata, Corbett, Machado), Chapter 69, Statutes of
2008, provided, among other things, that tenants of
foreclosed properties receive notice that their home is in
foreclosure, and receive a 60-day notice to quit, as
specified.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee, minor
absorbable costs to the PUC for enforcement of the bill's
requirements with regard to the investor-owned utilities.
SUPPORT : (Verified 9/2/09)
Western Center on Law and Poverty (source)
Asian Americans for Civil Rights & Equality
California Alliance for Retired Americans
California Rural Legal Assistance Foundation
FamiliesFirst
StoneSoup
Tenants Together
East Bay Municipal Utilities District
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ARGUMENTS IN SUPPORT : According to the author's office,
"SB 120 addresses an often overlooked aspect of the current
mortgage foreclosure crisis: an increase in the number of
innocent renters who unexpectedly lose their utility
services as a result of foreclosure on a rented property.
"Landlords of distressed properties are sometimes unable to
pay utility bills that they agreed to pay, and shut-offs
occur. Existing law allows tenants in multi-family
dwellings to begin service in their own names and deduct
payment from the amount of rent owed to the landlord. This
bill would extend the current provisions to tenants living
in single-family homes and condominiums, because these are
the types of rentals most often affected by foreclosure.
The bill also requires that utilities must provide written
shut-off notices for tenants in all rental properties, not
just multifamily rental property, and it requires that the
notices in the six most common languages used in
California. These changes in law will ensure that tenants
in a foreclosed property will not unfairly be denied
utility services."
ASSEMBLY FLOOR :
AYES: Arambula, Beall, Block, Blumenfield, Brownley,
Caballero, Carter, Chesbro, Coto, Davis, De La Torre, De
Leon, Eng, Evans, Feuer, Fong, Fuentes, Furutani,
Galgiani, Hall, Hayashi, Hernandez, Hill, Huber, Huffman,
Jones, Krekorian, Lieu, Bonnie Lowenthal, Ma, Mendoza,
Monning, Nava, John A. Perez, V. Manuel Perez,
Portantino, Ruskin, Salas, Saldana, Skinner, Solorio,
Swanson, Torlakson, Torres, Torrico, Yamada, Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,
Fletcher, Fuller, Gaines, Garrick, Gilmore, Hagman,
Harkey, Jeffries, Knight, Logue, Miller, Nestande,
Niello, Nielsen, Silva, Smyth, Audra Strickland, Tran,
Villines
NO VOTE RECORDED: Ammiano, Buchanan, Charles Calderon
RJG:nl 9/2/09 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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