Bill Text: CA AB44 | 2009-2010 | Regular Session | Chaptered
Bill Title: Improvement Act of 1911: contractual assessments.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Passed) 2010-09-30 - Chaptered by Secretary of State - Chapter 564, Statutes of 2010. [AB44 Detail]
Download: California-2009-AB44-Chaptered.html
BILL NUMBER: AB 44 CHAPTERED
BILL TEXT
CHAPTER 564
FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2010
APPROVED BY GOVERNOR SEPTEMBER 30, 2010
PASSED THE SENATE AUGUST 26, 2010
PASSED THE ASSEMBLY AUGUST 30, 2010
AMENDED IN SENATE AUGUST 19, 2010
AMENDED IN SENATE AUGUST 2, 2010
AMENDED IN SENATE JUNE 3, 2010
AMENDED IN ASSEMBLY JUNE 1, 2009
AMENDED IN ASSEMBLY MARCH 31, 2009
AMENDED IN ASSEMBLY MARCH 18, 2009
INTRODUCED BY Assembly Member Blakeslee
(Coauthor: Assembly Member Harkey)
(Coauthor: Senator Benoit)
DECEMBER 1, 2008
An act to add Sections 5898.15, 5898.23, and 5899.2 to the Streets
and Highways Code, relating to public improvements.
LEGISLATIVE COUNSEL'S DIGEST
AB 44, Blakeslee. Improvement Act of 1911: contractual
assessments.
Existing law, the Improvement Act of 1911, authorizes the
legislative body of any public agency, as defined, to determine that
it would be convenient, advantageous, and in the public interest to
designate an area within the public agency, as specified, within
which authorized public agency officials and property owners may
enter into voluntary contractual assessments to finance the
installation of distributed generation renewable energy sources or
energy or water efficiency improvements that are permanently fixed to
real property, as specified. Existing law requires the legislative
body to make these determinations by adopting a resolution indicating
its intention to do so and requires that the resolution include
specified information and directs an appropriate public agency
official to prepare a prescribed report.
This bill would define the term "permanently fixed," for purposes
of financing the installation of distributed generation renewable
energy sources, to include systems that are attached to specified
types of real property pursuant to a power purchase agreement or
lease between the owner of the system and the owner of the assessed
property, if the agreement satisfies prescribed criteria.
This bill would prohibit a public agency from permitting a
property owner to participate in a contractual assessment program if
the total amount of the assessments and taxes on the property exceeds
5% of the property's market value, as specified. This bill would
also require the prescribed report to include criteria for
determining the underwriting requirements, as well as safeguards to
be used to limit the total annual property tax and assessments on the
property.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 5898.15 is added to the Streets and Highways
Code, to read:
5898.15. (a) A public agency shall not permit a property owner to
participate in any program established pursuant to this chapter if
the owner's participation would result in the total amount of any
annual property taxes and assessments exceeding 5 percent of the
property's market value, as determined at the time of approval of the
owner's contractual assessment.
(b) Nothing in this chapter shall be construed to void or
otherwise release a property owner from the contractual obligations
incurred by a contractual assessment on a property, particularly in
the event that the total amount of annual property taxes and
assessments exceeds 5 percent of a property's market value after the
property owner has entered into a contractual assessment pursuant to
this chapter.
SEC. 2. Section 5898.23 is added to the Streets and Highways Code,
to read:
5898.23. For purposes of the report required pursuant to Section
5898.22, the statement of public agency policies required pursuant to
subdivision (c) of that section shall also include a brief
description of criteria for determining the underwriting
requirements, as well as safeguards that will be used to ensure that
the total annual property tax and assessments on the property will
not exceed 5 percent of the property's market value, as determined at
the time of approval for the owner's contractual assessment.
SEC. 3. Section 5899.2 is added to the Streets and Highways Code,
to read:
5899.2. For the purpose of financing the installation of
distributed generation renewable energy sources pursuant to this
chapter, "permanently fixed" includes, but is not limited to, systems
attached to a residential, commercial, industrial, agricultural, or
other real property pursuant to a power purchase agreement or lease
between the owner of the system and the owner of the assessed
property, if the power purchase agreement or lease contains all of
the following provisions:
(a) The attached system is an eligible renewable energy resource
pursuant to the California Renewables Portfolio Standard Program
(Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1
of Division 1 of the Public Utilities Code).
(b) The term of the power purchase agreement or lease is at least
as long as the term of the related assessment contract.
(c) The owner of the attached system agrees to install, maintain,
and monitor the system for the entire term of the power purchase
agreement or lease.
(d) The owner of the attached system is not permitted to remove
the system prior to completion of the term of the contractual
assessment lien.
(e) After installation, the power purchase agreement or lease is
paid in full using the funds from the contractual assessment program.
(f) The right to receive the electricity from the system, through
a power purchase agreement or lease or the right to the system
itself, is tied to the ownership of the assessed real property and is
required to be automatically transferred with the title to the real
property whether the title is transferred by voluntary sale, judicial
or nonjudicial foreclosure, or by any other means.
(g) The power purchase agreement or lease identifies the public
agency that is a party to the assessment contract on the real
property as a third-party beneficiary of the power purchase agreement
or lease until the assessment lien on the property has been fully
paid and, only until that time, prohibits amendments to the power
purchase agreement or lease without the consent of the public agency.
(h) Each of the following provisions, in order to ensure that the
property owner is guaranteed the electric power from the system for
the length of the lien:
(1) The system cannot be removed if the owner of the attached
system is not performing its obligations under the contract.
(2) The owner of the attached system must be a bankruptcy remote
special purpose entity that is bankruptcy remote and meets all of the
following conditions:
(A) It does not engage in any business other than owning the
attached systems and entering into electricity contracts with the
homeowner.
(B) It has no material debt.
(C) Its contracts are either entered into with unrelated third
parties or have terms negotiated at arms length.
