Bill Text: CA SB1233 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Joint powers authorities: Water Bill Savings Act.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Failed) 2016-11-30 - From Assembly without further action. [SB1233 Detail]

Download: California-2015-SB1233-Introduced.html

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BILL NUMBER: SB 1233	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator McGuire
   (Coauthor: Senator Wolk)
   (Coauthors: Assembly Members Levine and Wood)

                        FEBRUARY 18, 2016

   An act to amend Section 6586.7 of, and to add Section 6588.8 to,
the Government Code, relating to water.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1233, as introduced, McGuire. Joint powers authorities: Water
Bill Savings Act.
   Existing law, the Marks-Roos Local Bond Pooling Act of 1985,
authorizes joint powers authorities, among other powers, to issue
bonds and loan the proceeds to local agencies to finance specified
types of projects and programs.
   This bill would enact the Water Bill Savings Act, which would
authorize a joint powers authority to provide funding for a customer
of a local agency or its publicly owned utility to acquire, install,
or repair a water efficiency improvement on the customer's property
served by the local agency or its publicly owned utility. The bill
would require the customer to repay the authority through an
efficiency charge on the customer's water bill to be imposed and
collected by the local agency or its publicly owned utility on behalf
of the authority pursuant to a servicing agreement. The bill would
authorize the authority to issue bonds to fund the program.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Water conservation efforts are indispensable to combating the
current and continuing drought conditions faced by the state and
advancing the state's greenhouse gas emission reduction goals.
   (b) The up-front cost of acquiring, installing, and repairing
water efficiency improvements is often prohibitive and may prevent
customers from using them on residential, commercial, industrial,
agricultural, or other real property.
   (c) Increasing customer water efficiency is a core component of
the provision of water utility service.
  SEC. 2.  (a) It is the intent of the Legislature to make water
efficiency improvements more affordable and promote the acquisition,
installation, and repair of those improvements by allowing local
agencies to establish a mechanism by which they may help their water
customers to acquire, install, and repair water efficiency
improvements on privately owned customer properties.
   (b) It is the intent of the Legislature that this act authorize
the development of a program to be established by a joint powers
authority that would provide a water customer with an alternative and
voluntary means to acquire, install, or repair water efficiency
improvements. It is further the intent of the Legislature that the
cost of this voluntarily acquired, installed, or repaired water
efficiency improvement be repaid through an efficiency charge added
to the water bill associated with the customer property upon which
the water efficiency improvement is located.
  SEC. 3.  Section 6586.7 of the Government Code, as added by Section
4 of Chapter 723 of the Statutes of 2000, is amended to read:
   6586.7.  (a) A copy of the resolution adopted by an authority
authorizing bonds or any issuance of bonds, or accepting the benefit
of any bonds or proceeds of bonds, except bonds issued or authorized
pursuant to Article 1 (commencing with Section 6500), or bonds issued
for the purposes specified in subdivision (c) of Section 6586.5,
shall be sent by certified mail to the Attorney General and the
California Debt and Investment Advisory Commission not later than
five days after adoption by the authority.
   (b) This section does not apply to bonds:
   (1) Specified in subdivision (c) of Section 6586.5.
   (2) Issued pursuant to the Community Redevelopment Law, Part 1
(commencing with Section 33000) of Division 24 of the Health and
Safety Code.
   (3) To finance transportation facilities and vehicles.
   (4) To finance a facility that is located within the boundaries of
an authority, provided that the authority that issues those bonds
consists of any of the following:
   (A) Local agencies with overlapping boundaries.
   (B) A county and a local agency or local agencies located entirely
within that county.
   (C) A city and a local agency or local agencies located entirely
within that city.
   (5) To finance a facility for which an authority has received an
allocation from the California Debt Limit Allocation Committee.
   (6) Of an authority that consists of no less than 250 local
agencies and the agreement that established that authority requires
the governing body of the local agency that is a member of the
authority in whose jurisdiction the facility will be located to
approve the facility and the issuance of the bonds. 
   (7) Issued pursuant to Section 6588.8. 
  SEC. 4.  Section 6588.8 is added to the Government Code, to read:
   6588.8.  (a) This section shall be known and may be cited as the
Water Bill Savings Act.
   (b) For purposes of this section, the following terms have the
following meanings:
   (1) "Customer" means a person or entity that purchases water from
a local agency or its publicly owned utility and is billed for the
water by the local agency or its publicly owned utility.
   (2) "Customer property" means residential, commercial, industrial,
agricultural, or other real property owned by the customer.
   (3) "Efficiency charge" means a charge on a customer's water bill
that is paid by the customer directly to the local agency or its
publicly owned utility in order to pay for an efficiency improvement
pursuant to this section.
   (4) "Efficiency improvement" means a water efficiency improvement,
as defined by the authority.
   (5) "Financing costs" mean all of the following:
   (A) An interest and redemption premium payable on a bond.
   (B) The cost of retiring the principal of a bond, whether at
maturity, including acceleration of maturity upon an event of
default, or upon redemption, including sinking fund redemption.
   (C) A cost related to issuing or servicing bonds, including, but
not limited to, a servicing fee, trustee fee, legal fee,
administrative fee, bond counsel fee, bond placement or underwriting
fee, remarketing fee, broker dealer fee, independent manager fee,
municipal adviser fee, accounting report fee, engineering report fee,
rating agency fee, and payment made under an interest rate swap
agreement.
   (D) A payment or expense associated with a bond insurance policy,
financial guaranty, or a contract, agreement, or other credit
enhancement for bonds or a contract, agreement, or other financial
agreement entered into in connection with a bond.
   (E) The funding of one or more reserve accounts related to a bond.

   (6) "Local agency" means a "local government" as defined in
subdivision (b) of Section 1 of Article XIII C of the California
Constitution.
   (7) "Publicly owned utility" means a utility furnishing water
service to customers that is owned and operated by a local agency or
a department or other subdivision of a local agency and includes any
successor to the powers and functions of the department or other
subdivision.
   (8) "Servicing agreement" means an agreement between a local
agency or its publicly owned utility and the authority for the
collection of the efficiency charge, pursuant to which the local
agency or its publicly owned utility acts as a servicing agent for
purposes of collecting the efficiency charge for the authority.
   (c) (1) Notwithstanding any other law, if the requirements of
paragraphs (2) and (3) are met, an authority may provide funding for
a customer of a local agency or its publicly owned utility to
acquire, install, or repair an efficiency improvement on a customer
property served by the local agency or its publicly owned utility.
   (2) (A) The authority, by resolution, establishes or extends a
program to provide funding for a customer of a local agency or its
publicly owned utility to acquire, install, or repair an efficiency
improvement on a customer property served by the local agency or its
publicly owned utility. The resolution shall do all of the following:

   (i) Identify the geographic area in the state in which the
authority intends to operate the program.
   (ii) Approve a standardized servicing agreement.
   (iii) Authorize one or more designated officials of the authority
to execute and deliver the servicing agreement on behalf of the
authority.
   (B) The authority acknowledges receipt of the resolution described
in paragraph (3).
    (C) The authority may determine that all proceedings were valid
and in conformity with the requirements of this paragraph and that
finding shall be final and conclusive.
   (3) The legislative body of the local agency requests the
authority to provide funding for its customers through a program
established by the authority pursuant to this section by doing all of
the following:
   (A) The legislative body adopts a resolution declaring its
intention to request the authority to establish or extend a program
to a customer represented by the legislative body, calling for a
public hearing that shall be held at least 30 days later and
directing the clerk or secretary of the legislative body to publish a
notice of the hearing at least five days before the hearing in a
newspaper of general circulation in the boundaries of the local
agency. If the local agency wishes to pledge its water enterprise
revenue as security for the payment of the principal of, and interest
and redemption premium on, bonds issued by the authority in the
event that efficiency charges are insufficient for those purposes
pursuant to paragraph (4) of subdivision (f), the legislative body
shall declare that intention in the resolution.
   (B) The legislative body conducts the noticed public hearing and,
after considering the testimony of any interested person, concludes
that the program and the proposed pledge of water enterprise revenue,
if applicable, would provide significant public benefits in
accordance with the criteria specified in Section 6586.
   (C) The legislative body adopts a resolution that does all of the
following:
   (i) Authorizes the authority to establish or extend a program
pursuant to this section within the boundaries of the local agency.
   (ii) Declares that the operation of the program by the authority
in the local agency's geographic boundaries would provide significant
public benefits in accordance with the criteria specified in Section
6586.
   (iii) Approves the standardized servicing agreement and authorizes
one or more designated officials of the local agency to execute and
deliver the servicing agreement with the authority.
   (iv) If applicable, approves the pledge of water enterprise
revenue as security for the payment of the principal of, and interest
and redemption premium on, bonds issued by the authority in the
event that efficiency charges are insufficient for those purposes.
   (v) If applicable, authorizes execution and delivery of one or
more pledge agreements to evidence a pledge.
   (vi) In the resolution, the legislative body may determine that
all proceedings were valid and in conformity with the requirements of
this section and that finding shall be final and conclusive.
   (d) (1) Subject to the requirements of Article XIII C or Article
XIII D of the California Constitution, a customer shall repay the
authority through an efficiency charge on the customer's water bill
that is imposed and collected by the local agency or its publicly
owned utility. The imposition of the efficiency charge shall be made
and evidenced by a written agreement between the customer, the
authority, and the local agency or its publicly owned utility. The
use of the proceeds of the efficiency charge to repay the costs of
the efficiency improvement constitutes a "water" service, as defined
in subdivision (m) of Section 53750.
   (2) The written agreement shall include all of the following:
   (A) An agreement by the customer to pay an efficiency charge for
the period and in the amount specified in the agreement unless the
efficiency charge is prepaid in the manner set forth in the
agreement. The period designated for repayment shall not exceed the
estimated useful life of the funded efficiency improvements.
   (B) A description of the financial calculation, formula, or other
method that the authority used to determine the efficiency charge.
The efficiency charge may include a component for reasonable
administrative expenses incurred by the local agency or its publicly
owned utility and the authority in connection with the program and
the funding.
   (C) A description of the efficiency improvement funded with the
efficiency charge. A determination in the agreement that an
improvement is an efficiency improvement shall be final and
conclusive.
   (D) A representation by the customer that the customer intends to
acquire, install, or repair and use the efficiency improvement on the
customer's property for the useful life of the efficiency
improvement. Any failure by the customer to acquire, install, or
repair and use the efficiency improvement on the customer's property
for the useful life of the efficiency improvement shall not affect
the customer's obligation to pay the efficiency charge as set forth
in the agreement.
   (3) Notwithstanding any other provision of this section, an
efficiency charge shall not exceed the maximum rate permitted under
Article XIII D of the California Constitution.
   (4) The timely and complete payment of an efficiency charge by a
customer that has agreed to pay an efficiency charge may be a
condition of receiving water service from the local agency or its
publicly owned utility, and a local agency and its publicly owned
utility are authorized to use their established collection policies
and all rights and remedies provided by law to enforce payment and
collection of the efficiency charge. A person liable for an
efficiency charge shall not be entitled or authorized to withhold
payment, in whole or in part, of the efficiency charge for any
reason.
   (5) A customer's obligation to pay the efficiency charge shall run
with title to the customer property on which the efficiency
improvement is located until repaid in full. A local agency or its
publicly owned utility may record notice of an efficiency charge in
the records of the county recorder of the county in which the
customer's property is located and that notice shall impart notice of
the efficiency charge to all persons. Any failure by the local
agency or its publicly owned utility to record that notice shall not
excuse an owner of the customer property, on which the funded
improvement is located, from the obligation to pay the efficiency
charge.
   (6) Because the efficiency charge is a voluntary charge that will
be made pursuant to a written agreement between the customer, the
authority, and the local agency or its publicly owned utility, the
Legislature finds and declares that voluntary efficiency charges
under this section are not taxes, assessments, fees, or charges for
the purposes of Articles XIII C and XIII D of the California
Constitution and therefore the provisions of Articles XIII C and XIII
D and Article 4.6 (commencing with Section 53750) of Chapter 4 of
Part 1 of Division 2 of Title 5 of the Government Code are not
applicable to voluntary efficiency charges levied pursuant to this
section. Furthermore, a program established pursuant to this section
provides a "water" service, as defined in subdivision (m) of Section
53750.
   (e) (1) The authority and a local agency or its publicly owned
utility shall enter into a servicing agreement for the collection of
one or more efficiency charges and the local agency or its publicly
owned utility shall act as a servicing agent for purposes of
collecting the efficiency charge.
   (2) Moneys collected as an efficiency charge by the local agency
or its publicly owned utility, acting as a servicing agent on behalf
of the authority, shall be held in trust for the exclusive benefit of
the persons entitled to the financing costs to be paid, directly or
indirectly, from the efficiency charge and shall not lose their
character as revenues of the authority because the local agency or
its publicly owned utility possesses them.
   (3) In the servicing agreement, the local agency or its publicly
owned utility shall contract with the authority that the local agency
or its publicly owned utility will continue to operate its publicly
owned utility system to provide service to its customers, will, as
servicer, collect the efficiency charge for the benefit and account
of the authority and, if applicable, the beneficiaries of the pledge
of the efficiency charge, and will account for and remit these
amounts to, or for the account of, the authority.
   (4) The servicing agreement shall provide that the obligation to
pay the efficiency charge shall run with title to the customer
property on which the efficiency improvement is located until the
authority is fully repaid. When the property is not owner occupied,
the servicing agreement shall provide that the obligation to pay the
efficiency charge appear in the terms through which the customer
leases or licenses the property for occupancy.
   (5) In the servicing agreement, the local agency or its publicly
owned utility may agree that the timely and complete payment of all
efficiency charges by a customer that has agreed to pay an efficiency
charge shall be a condition of receiving service from the publicly
owned utility, and the local agency or its publicly owned utility
shall use their established collection policies and all rights and
remedies provided by law to enforce payment and collection of the
efficiency charge.
   (6) In the servicing agreement, the local agency or its publicly
owned utility shall agree that in the event of default by the local
agency or its publicly owned utility in payment of revenues arising
with respect to the efficiency charge, the authority, upon the
application by the beneficiaries of the authority's pledge described
in this section, and without limiting any other remedies available to
the beneficiaries by reason of the default, shall order the
sequestration and payment to the beneficiaries of revenues arising
with respect to the efficiency charge.
   (f) (1) The authority may issue one or more bonds for the purpose
of providing funds for the acquisition, installation, and repair of
an efficiency improvement on customer property pursuant to this
section.
   (2) An authority issuing a bond shall include in its preliminary
notice and final report for the bonds submitted to the California
Debt and Investment Advisory Commission pursuant to Section 8855 a
statement that the bond is being issued pursuant to this section.
   (3) (A) The authority may, pursuant to Section 5451, pledge one or
more efficiency charges as security for the bonds issued pursuant to
this section. Revenue from an efficiency charge shall be deemed
special revenue of the authority and shall not constitute revenue of
the local agency or its publicly owned utility for any purpose,
including without limitation any dedication, commitment, or pledge of
revenue, receipts, or other income that the local agency or its
publicly owned utility has made or will make for the security of any
of its obligations.
   (B) The validity and relative priority of a pledge created or
authorized under this section is not defeated or adversely affected
by the commingling of efficiency charge revenue with other moneys
collected by a local agency or its publicly owned utility.
   (4) Subject to the requirements of Article XIII C or Article XIII
D of the California Constitution, a local agency may pledge water
enterprise revenue as security for the payment of the principal of,
and interest and redemption premium on, bonds issued by the authority
in the event that efficiency charges are insufficient for those
purposes, and may execute one or more pledge agreements, which shall
be made pursuant to Section 5451, for the benefit of the authority or
for the exclusive benefit of the persons entitled to the financing
costs to be paid from the efficiency charges.
   (g) If a local agency for which bonds have been issued and remain
outstanding ceases to operate a water utility, either directly or
through its publicly owned utility, references in this section to the
local agency or to its publicly owned utility shall be deemed to
refer to the entity providing water utility services in lieu of the
local agency and that entity shall assume and perform all obligations
of the local agency or its publicly owned utility required by this
section and the servicing agreement with the authority while the
bonds remains outstanding.
   (h) If the local agency, its publicly owned utility, and the
authority have complied with the procedures set forth in this
section, they shall not be required to comply with Section 6586.5.
   (i) The provisions of this section are severable. If any provision
of this section or its application is held invalid, that invalidity
shall not affect other provisions or applications that can be given
effect without the invalid provision or application.