BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1035 (Hancock)
Hearing Date: 05/10/2010 Amended: 04/29/2010
Consultant: Jacqueline Wong-HernandezPolicy Vote: Local Gov.
4-1, Judiciary 3-1
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BILL SUMMARY: This bill authorizes a municipal utility district
(MUD) to collect delinquent fees incurred by a commercial or
residential lessee, tenant, or subtenant by charging the
delinquent fees to the property owner's tax roll, as specified.
This bill authorizes MUDs to pursue lien remedies for water and
sewer services.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Increased lien recordation Potentially significant costs;
fully funded by fees Local*
*County Recorders
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STAFF COMMENTS:
There are five MUDs, statewide: East Bay, Lassen, Sacramento,
South Placer, and Southern San Joaquin. MUDs can provide various
utility services, including: electricity, water, sewer, garbage
disposal, transportation, and communications. Currently, only
East Bay MUD and South Placer MUD provide sewer service, and
(only) East Bay MUD also provides water service.
This bill expands the authority of MUDs to pursue remedies
against delinquent account holders. Existing law provides the
lien remedy to MUDs (other than water, sewer, and electric) in
addition to any other remedy provided by law. Existing law also
provides that lien remedies do not apply to municipal utility
districts providing water or sewer services to residential
properties, or electric services. (Pub. Util. Code Sec. 12811.1
(d) (e).) In the absence of a remedy, MUDs must either shut off
water service to buildings with delinquent accounts or subsidize
the cost of continued service by charging more for water
services to other ratepayers. This bill gives MUDs an option to
continue service and seek lien remedies, as they can (and do)
for electricity and other utilities.
Additionally, this bill authorizes a MUD, pursuant to a
resolution or ordinance, to collect delinquent utility fees,
tolls, rates, rentals, and other charges, together with interest
and penalties, including any delinquent fees, tolls, rates,
rentals, or other charges for services rendered to a lessee,
tenant, or subtenant, on the tax roll in the same manner as
property taxes. This bill would also delete the statutory
exemption on delinquent fees or charges for the furnishing of
water or sewer services to residential properties.
This bill specifies the administrative process required to
pursue lien remedies, and the guidelines for recording documents
with the County Recorder. This bill requires that any MUD
recording specified paperwork to pursue lien remedies shall
reimburse the county for the reasonable expenses incurred by the
county under this bill. The remedies
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SB 1035 (Hancock)
allowed in this bill are entirely optional for MUDs and, thus,
do not constitute a local mandate. County Recorders have fee
authority under existing statutes, and currently charge fees for
virtually all recordation services. This bill specifically
allows County Records to charge fees to cover their costs (as
they do for all lien recordation), and does not present a
reimbursable mandate.