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CITY CLERK
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AGENDA STATEMENT
CITY COUNCIL MEETING DATE: September 1, 2009
Property Assessed Clean Energy (PACE) Programs and AB 811
Report Prepared by Jordan Figueiredo, Environmental Technician
ATTACHMENTS: 1) AB 811 Enacted In 2008 Amending The State Streets &
Highways Code
2) Proposed SB 279 (Hancock) -Local Government Community
Facilities Districts
RECOMMENDATION: Receive the report and direct Staff to keep abreast of regional PACE
opportunities and programs being developed, which may expand
opportunities to offer energy efficiency retrofits and solar system
financing.
FINANCIAL STATEMENT: The intent of current legislation is to offer property owners an
alternative source of financing for the purchase and installation of
energy efficiency retrofits and solar systems. The concept is
relatively new and regional organizations are still evaluating how
funding can be made available.
DESCRIPTION:
On July 21, 2009, the City Council directed Staff to research California State Assembly Bill (AB) 811,
chapter 159, statutes of 2008 (Attachment 1), which authorizes Property Assessed Clean Energy (PACE)
programs for California joint powers authorities, counties or general law cities. AB 811 was developed
because, according to the bill's author(s) "the upfront cost of making residential, commercial, industrial,
or other real property more energy efficient prevents many property owners from making those
improvements." In order to finance property improvements and promote their installation, the Legislature
authorized a creative option for the financing of energy efficiency retrofits and solar system
improvements. Previous to the adoption of AB 811, only Charter Cities had used their local legislative
powers to establish programs which financed energy systems through property assessments. AB 811,
which amends several statutory provisions in the State Streets and Highways Code, authorizes other
agencies to consider enacting similar programs.
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The charter cities of Palm Desert and Berkeley were the first to develop PACE programs, and they were
influential in the development of the AB 811 legislation. The Palm Desert Energy Independence Program
(EIP) provides residents with access to renewable energy and energy efficiency improvements. The
Berkeley Financing Initiative for Renewable and Solar Technology or Berkeley FIRST provides its
residents with access to solar energy systems. Both programs were able to identify sources of funding to
initiate programs that financed solar panels, or other energy efficient projects. The City of Palm Desert
utilized a combination of loans and assessments placed on the Property Tax roll. The City of Berkeley
identified private funding that would support the installation of approximately 40 systems and would be
repaid from property assessments.
What Exactly is AB 811 ?
The concept behind AB 811 is the creation of land secured financing programs (assessment district),
which authorizes a legislative body to enter into contractual assessments allowing property owners to
finance energy efficiency and renewable energy improvements. Assessment Districts are a financing tool
used for public improvements such as street improvements, utilities, etc. However, traditional
improvement assessment districts have generally been limited to public improvements. The concept
behind AB 811 is to permit assessment districts to be used to finance privately owned improvements.
Under an AB 811 assessment district the capital costs of financing these energy efficiency and renewable
energy projects would be paid through the issuance of a revenue bond or from other capital services such
as private financing. An assessment lien is placed on the property of each participating owner in an
amount sufficient to repay the costs of the project, including administration of the program and financing.
The amount of the assessment is based on the cost including interest spread over several years. The term
is established by the program and typically would not exceed the life of the asset (20 year period or less).
Any program set up under the guidelines of AB 811 is entirely voluntary and assessments are levied only
against those properties that choose to participate. If the owner sells the property, the repayment
obligation remains attached to the property until such time as the assessment is fully repaid.
Challenges in Implementing AB 811
Since the adoption of this legislation there has been considerable interest in the development of the
financing tool. However, actual implementation of new programs has been somewhat limited. The
following are some of the practical issues that interested parties are attempting to address as part of
programs under consideration:
1. Access to funding - In the current economic climate, investor interest in bonds of this nature have
been limited due to the fact that this is a relatively new concept which can cause some investor
uncertainty.
2. Recession Impacting Consumer Large Purchases - In the current recession, consumer spending
on discretionary big-ticket items has decreased. A decision to install a solar system or large energy
efficiency retrofit is a major financial cost for the consumer. They must feel comfortable that the long-
term energy savings will offset the capital outlay.
3. Timing of Making Funds Available - In a traditional improvement assessment district, the
capital costs represent a defined project with an estimated schedule for construction. Under AB 811, it is
difficult to market the financing without knowing in advance the number of participants. Furthermore,
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prospective participants are in the position of having to wait to construct energy efficiency retrofits or
solar systems until there is a critical mass of participants to establish the financing program.
4. Assessment Timing -The assessments can only be added to the tax roll once per year.
Depending on when the system cost is incurred the time frame for the payments to begin can be as much
as one year away.
5. Potential monitoring issues -Some public agencies discussing the concept have grappled with
the potential situation where they would be collecting assessment payments for a system or for retrofits
that are inoperable or missing. (i.e., a scenario where the structure was destroyed and perhaps the owner
did not maintain insurance; or the property was sold and the future owner claimed the system did not
work). In such a situation, the status of the system or the retrofits would not be relevant because once the
improvements are installed and on the property taxes they must be paid. Therefore, the property owner
would still be responsible for future payments on their property taxes including any improvements that
maybe inoperable or missing.
How are Local Governments Utilizing AB 811 and PACE Programs
Due to some of the issues noted above, and because AB 811 was only enacted a year ago, there are only a
few program examples available. However, interest exists among individual cities and regional agencies
to identify opportunities for the program to work. The charter cities of Sacramento, San Diego, San
Francisco and the general law city of Solana Beach are currently in the early stages of developing PACE
programs of their own. Additionally, Sonoma County has developed an "Energy Independence Program"
that, in addition to offering energy efficiency and renewable energy improvements to real property, also
focuses on water conservation. At the regional and state level, Staff is aware of the following three
agencies that are exploring opportunities to offer AB 811 financing programs: California State
Communities Development Authority (CSCDA); Alameda County; and the Association of Bay Area
Governments (ABAG).
1) CSCDA CaliforniaFIIZST
The CSCDA is considering the development of a large PACE program entitled CaliforniaFIRST to
take advantage of greater economies of scale and, thereby, offer greater benefits to participants. This
program is intended to have "no direct cost or risk to participating cities and counties." The CSCDA
is now conducting a market research study to assess the demand for such a program and anticipates
deciding on whether to move forward with the program later this fall.
2) Alameda County
On June 9, 2009, Alameda County passed a resolution of intent to work with the CSCDA to create a
PACE program stating that, "The aggregation of communities into a single county consortium is
specifically encouraged by the DOE [Department of Energy] and the California Energy Commission."
While Alameda County is considering a program with the CSCDA, the county has not ruled out a
stand alone program either. The estimated timeline for the rollout of Alameda County's program is
undetermined at this point.
3) ABAG
ABAG is considering its own Solar Energy Efficiency (SEE) district or PACE program in concert with
PG&E. In order to proceed with its program, ABAG is proposing to wait until additional legislative
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changes (see below for more detail) are enacted. The estimated timeline for the rollout of ABAG's
program is undetermined at this point.
Potential for Additional Legislative Changes
The current financing option offered under AB 811 utilizes the traditional Assessment District laws. As
noted earlier these assessment districts were originally established to address public infrastructure and
there are certain administrative and legal questions associated with financing private improvements.
^ Senator Hancock has introduced legislation entitled SB 279 (Attachment 2), which, if enacted,
would authorize the financing of energy efficiency, water conservation and renewable energy
improvements under the Community Facilities Assessment process commonly referred to as
Mello-Roos. Under current law, Mello-Roos assessments can only be used for financing limited
private property improvements such as seismic retrofits. This legislation would amend the law to
specifically address how a Community Facilities Financing District could be formed to allow for
individual parcels to elect to participate. The proposal also explicitly references the financing of
private improvements for solar power. It is envisioned that this change may make it easier to set
up PACE programs at the regional or state level.
What Will a PACE Program Cost?
Due to the fact that there are different program structures under consideration in the State, it is difficult to
identify the costs the City might be expected to bear if it adopted a PACE program. The costs will
ultimately be impacted by whether the City chooses to join in any regional solution that maybe developed
or if it elects to pursue the development of its own program. Staff would propose that City monitor
progress on regional efforts. In the event that the opportunity to participate in a regional program arises,
Staff would return with a more specific analysis of the costs. The intent of PACE programs is that the
costs would be paid by the program participants, not by an agency making such programs available. The
initial setup costs of a PACE program can be significant and varies depending on the agency
administering the program and the program size and effort. The ongoing administration of a PACE
program, while also significant, is often paid by the program itself through higher interest rates or
application and program fees and would need to be evaluated if and when a program is set up. The
difficulty with AB 811 assessments is that the schedule of costs needs to be identified up-front when the
assessment is levied.
Next Steps
Dublin will continue its current collaboration with the Cities of Pleasanton and Livermore on the Solar
Cities effort to inform residents of solar opportunities and connect them to local vendors. Staff does
recommend that the City monitor progress on regional efforts, such as those in development by the
CSCDA, Alameda County and ABAG, to determine which, if any, are likely to offer the most efficient
opportunity for local agencies to offer PACE programs to their residents. Staff would, if directed, report
back to the City Council on any new regional program(s) which the City may want to consider.
RECOMMENDATION: Staff recommends that the City Council receive the report and direct Staff to
keep abreast of regional PACE opportunities and programs being developed, which may expand
opportunities to offer energy efficiency retrofits and solar system financing.
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Assembly Bill No. 811
CHAPTER 159
An act to amend Sections 5898.12, 5898.20, 5898.22, and 5898.30 of,
and to add Sections 5898.14 and 5898.21 to, the Streets and Highways Code,
relating to contractual assessments, and declaring the urgency thereof, to
take effect immediately.
[Approved by Governor July 21, 2008. Filed with
Secretary of State July 21, 2008.]
LEGISLATIVE COUNSEL'S DIGEST
AB 811, Levine. Contractual assessments: energy efficiency
improvements.
Existing law authorizes the legislative body of any city, as defined, to
determine that it would be convenient and advantageous to designate an
area within which authorized city officials and free and willing property
owners may enter into contractual assessments and make arrangements to
finance public improvements to specified lots or parcels under certain
circumstances. Existing law requires the legislative body to make these
determinations by adopting a resolution indicating its intention to do so and
requires the resolution to include certain information, including, but not
limited to, identification of the kinds of public works that may be financed,
a description of the boundaries of the area within which contractual
assessments may be entered into, and a description of the proposed
arrangements for financing the program. Existing law also directs an
appropriate city official to prepare a report to include, among other things,
the terms and conditions that would be agreed to by a property owner within
the contractual assessment area and the city and identification of the types
of facilities that may be financed through the use of contractual assessments.
This bill would additionally authorize a legislative body of any city, as
defined, to determine that it would be in the public interest to designate an
area within which authorized. city officials and free and willing property
owners may enter into contractual assessments to finance the installation
of distributed generation renewable energy sources or energy efficiency
improvements that are permanently fixed to real property, as specified. The
bill would require the resolution of intention to include, among other things,
the kinds of distributed generation renewable energy sources or energy
efficiency improvements that may be financed as well as a statement
specifying that it is in the public interest to finance those distributed
generation renewable energy sources or energy efficiency improvements.
The bill would further require the report to include, among other things, the
types of distributed generation renewable energy sources or energy efficiency
improvements that may be financed through the use of contractual
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assessments. The bill would authorize a property owner, upon written consent
of an authorized city official, to purchase directly the related equipment and
materials for the installation of distributed generation renewable energy
sources or energy efficiency improvements and to contract directly for the
installation of those sources or improvements. The bill would make findings
and a declaration in this regard.
This bill would declare that it is to take effect immediately as an urgency
statute.
The people of the State of California do enact as follows:
SECTION 1. Section 5898.12 of the Streets and Highways Code is
amended to read:
5898.12. (a) It is the intent of the Legislature that this chapter should
be used to finance public improvements to lots or parcels which are
developed and where the costs and time delays involved in creating an
assessment district pursuant to other provisions of this division or any other
law would be prohibitively large relative to the cost of the public
improvements to be financed.
(b) It is also the intent of the Legislature that this chapter should be used
to finance the installation of distributed generation renewable energy sources
or energy efficiency improvements that are permanently fixed to residential,
commercial, industrial, or other real property.
(c) This chapter shall not be used to finance facilities for parcels which
are undergoing development.
(d) This chapter shall not be used to finance the purchase or installation
of appliances that are not permanently fixed to residential, commercial,
industrial, or other real property.
(e) Assessments may be levied pursuant to this chapter only with the free
and willing consent of the owner of each lot or parcel on which an
assessment is levied at the time the assessment is levied.
SEC. 2. Section 5898.14 is added to the Streets and Highways Code, to
read:
5898.14. (a) The Legislature finds all of the following:
(1) Energy conservation efforts, including the promotion of energy
efficiency improvements to residential, commercial, industrial, or other real
property are necessary to address the issue of global climate change.
(2) The upfront cost of making residential, commercial, industrial, or
other real property more energy efficient prevents many property owners
from making those improvements. To make those improvements more
affordable and to promote the installation of those improvements, it is
necessary to authorize an alternative procedure for authorizing assessments
to finance the cost of energy efficiency improvements.
(b) The Legislature declares that a public purpose will be served by a
contractual assessment program that provides the legislative body of any
city with the authority to finance the installation of distributed generation
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renewable energy sources and energy efficiency improvements that are
permanently fixed to residential, commercial, industrial, or other real
property.
SEC. 3. Section 5898.20 of the Streets and Highways Code is amended
to read:
5898.20. (a) (1) The legislative body of any city may determine that it
would be convenient and advantageous to designate an area within the city,
which may encompass the entire city or a lesser portion, within which
authorized city officials and property owners may enter into contractual
assessments for public improvements and to make financing arrangements
pursuant to this chapter.
(2) The legislative body of any city may also determine that it would be
convenient, advantageous, and in the public interest to designate an area
within the city, which may encompass the entire city or a lesser portion,
within which authorized city officials and property owners may enter into
contractual assessments to finance the installation of distributed generation
renewable energy sources or energy efficiency improvements that are
permanently fixed to real property pursuant to this chapter.
(b) The legislative body shall make these determinations by adopting a
resolution indicating its intention to do so. The resolution of intention shall
include a statement that the city proposes to make contractual assessment
financing available to property owners, shall identify the kinds of public
works, distributed generation renewable energy sources, or energy efficiency
improvements that may be financed, shall describe the boundaries of the
area within which contractual assessments may be entered into, and shall
briefly describe the proposed arrangements for financing the program. The
resolution of intention shall state that it is in the public interest to finance
the installation of distributed generation renewable energy sources or energy
efficiency improvements, or both, pursuant to paragraph (2) of subdivision
(a), if applicable. The resolution shall state that a public hearing should be
held at which interested persons may object to or inquire about the proposed
program or any of its particulars, and shall state the time and place of the
hearing. The resolution shall direct an appropriate city official to prepare a
report pursuant to Section 5898.22 and to enter into consultations with the
county auditor's office or county controller's office in order to reach
agreement on what additional fees, if any, will be charged to the city or
county for incorporating the proposed contractual assessments into the
assessments of the general taxes of the city or county on real property.
(c) As used in this chapter, each of the following terms has the following
meaning:
(1) Notwithstanding Section 5005, "city" means a city, county, or city
and county.
(2) "Legislative body" has the same meaning as defined in Section 5006.
SEC. 4. Section 5898.21 is added to the Streets and Highways Code, to
read:
5898.21. Notwithstanding any other provision of this chapter, upon the
written consent of an authorized city official, the proposed arrangements
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for financing the program pertaining to the installation of distributed
generation renewable energy sources or energy efficiency improvements
that are permanently fixed to real property may authorize the property owner
to purchase directly the related equipment and materials for the installation
of distributed generation renewable energy sources or energy efficiency
improvements and to contract directly for the installation of distributed
generation renewable energy sources or energy efficiency improvements
that are permanently fixed to the property owner's residential, commercial,
industrial, or other real property.
SEC. 5. Section 5898.22 of the Streets and Highways Code is amended
to read:
5898.22. The report shall contain all of the following:
(a) A map showing the boundaries of the territory within which
contractual assessments are proposed to be offered.
(b) A draft contract specifying the terms and conditions that would be
agreed to by a property owner within the contractual assessment area and
the city.
(c) A statement of city policies concerning contractual assessments
including all of the following:
(1) Identification of types of facilities, distributed generation renewable
energy sources, or energy efficiency improvements that may be financed
through the use of contractual assessments.
(2) Identification of a city official authorized to enter into contractual
assessments on behalf of the city.
(3) A maximum aggregate dollar amount of contractual assessments.
(4) A method for setting requests from property owners for financing
through contractual assessments in priority order in the event that requests
appear likely to exceed the authorization amount.
(d) A plan for raising a capital amount required to pay for work performed
pursuant to contractual assessments. The plan may include amounts to be
advanced by the city through funds available to it from any source. The plan
may include the sale of a bond or bonds or other financing relationship
pursuant to Section 5898.28. The plan shall include a statement of or method
for determining the interest rate and time period during which contracting
property owners would pay any assessment. The plan shall provide for any
reserve fund or funds. The plan shall provide for the apportionment of all
or any portion of the costs incidental to financing, administration, and
collection of the contractual assessment program among the consenting
property owners and the city.
(e) A report on the results of the consultations with the county auditor's
office or county controller's office concerning the additional fees, if any,
that will be charged to the city or county for incorporating the proposed
contractual assessments into the assessments of the general taxes of the city
or county on real property, and a plan for financing the payment of those
fees.
SEC. 6. Section 5898.30 of the Streets and Highways Code is amended
to read:
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5898.30. Assessments levied pursuant to this chapter, and the interest
and any penalties thereon shall constitute a lien against the lots and parcels
of land on which they are made, until they are paid. Division 10
(commencing with Section 8500) applies to the levy and collection of
assessments levied pursuant to this chapter, insofar as those provisions are
not in conflict with the provisions of this chapter, including, but not limited
to, the collection of assessments in the same manner and at the same time
as the general taxes of the city on real property are payable and any penalties
and remedies and lien priorities in the event of delinquency and default.
SEC. 7. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the meaning of
Article IV of the Constitution and shall go into immediate effect. The facts
constituting the necessity are:
In order for legislative bodies of cities and free and willing property
owners to enter into contractual assessments to finance the installation of
distributed generation renewable energy sources or energy efficiency
improvements and for the state to begin to experience the effects of these
contractual assessments, such as saving millions of kilowatthours, as early
as this summer when usage is the highest, it is necessary that this act take
effect immediately.
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AMENDED IN ASSEMBLY NLY 6, 2009
AMENDED IN ASSEMBLY JUNE 23, 2009
AMENDED iN ASSEMBLY MAY 27, 2009
AMENDED IN SENATE APRIL 21, 2009
AMENDED IN SENATE APRIL 13, 2009
SENATE BILL No. 279
Introduced by Senator Hancock
(Coauthor: Assembly Member Silva)
February 24, 2009
An act to amend Sections 53313.5 and 53324 of, and to add Sections
53328.1, 53329.6, 53355.5, and 53355.7 to, the Government Code,
relating to local government.
LEGISLATIVE COUNSEL'S DIGEST
SB 279, as amended, Hancock. Local government: community
facilities districts.
(1) The Mello-Roos Community Facilities Act of 1982 authorizes a
community facilities district to finance the purchase, construction,
expansion, improvement, or rehabilitation of certain facilities, including,
among others, child care facilities, undergrounding of water transmission
and distribution facilities, and the cleanup of hazardous materials.
This bill would also authorize a community facilities district to finance
and refinance the acquisition, installation, and improvement of energy
efficiency, water conservation, and renewable energy improvements to
or on real property and in buildings, as specified.
(2) Existing law specifies the requirements for the establishment of
a community facilities district, including, among other things, a petition,
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Attachment 2
SB 279
a hearing, establishment of the boundaries of the community facilities
district, and an election on the question of establishment.
This bill would authorize a separate procedure for establishing a
community facilities district where the district initially consists solely
of territory proposed for annexation to the community facilities district
in the future, as specified, and would provide an alternate procedure
for incurring bonded indebtedness for community facility districts
established in this manner.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. Section 53313.5 of the Government Code is
2 amended to read:
3 53313.5. A community facilities district may also finance the
4 purchase, construction, expansion, improvement, or rehabilitation
5 of any real or other tangible property with an estimated useful life
6 of five years or longer or may finance planning and design work
7 that is directly related to the purchase, construction, expansion, or
8 rehabilitation of any real or tangible property. The facilities need
9 not be physically located within the district. A district may not
10 lease out facilities that it has financed except pursuant to a lease
11 agreement or annexation agreement entered into prior to January
12 1, 1988. A district may only finance the purchase of facilities
13 whose construction has been completed, as determined by the
14 legislative body, before the resolution of formation to establish
15 the district is adopted pursuant to Section 53325.1, except that a
16 district may finance the purchase of facilities completed after the
17 adoption of the resolution of formation if the facility was
18 constructed as if it had been constructed under the direction and
19 supervision, or under the authority of, the local agency that will
20 own or operate the facility. For example, a community facilities
21 district may finance facilities, including, but not limited to, the
22 following:
23 (a) Local park, recreation, parkway, and open-space facilities.
24 (b) .Elementary and secondary schoolsites and structures
25 provided that the facilities meet the building area and cost standards
26 established by the State Allocation Board.
27 (c) Libraries.
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(d) Child care facilities, including costs of insuring the facilities
against loss, liability insurance in connection with the operation
of the facility, and other insurance costs relating to the operation
of the facilities, but excluding all other operational costs. However,
the proceeds of bonds issued pursuant to this chapter shall not be
used to pay these insurance costs.
(e) The district may also finance the construction or
undergrounding of water transmission and distribution facilities,
natural gas pipeline facilities, telephone lines, facilities for the
transmission or distribution of electrical energy, and cable
television lines to provide access to those services to customers
who do .not have access to those services or to mitigate existing
visual blight. The district may enter into an agreement with a public
utility to utilize those facilities to provide a particular service and
for the conveyance of those facilities to the public utility. "Public
utility" shall include all utilities, whether public and regulated by
the Public Utilities Commission, or municipal. If the facilities are
conveyed to the public utility, the agreement shall provide that the
cost or a portion of the cost of the facilities that are the
responsibility of the utility shall be refunded by the public utility
to the district or improvement area thereof, to the extent that
refunds are applicable pursuant to (1) the Public Utilities Code or
rules of the Public Utilities Commission, as to utilities regulated
by the commission, or (2) other laws regulating public utilities.
Any reimbursement made to the district shall be utilized to reduce
or minimize the special tax levied within the district or
improvement area, or to construct or acquire additional facilities
within the district or improvement area, as specified in the
resolution of formation.
(f) The district may also finance the acquisition, improvement,
rehabilitation, or maintenance of any real or other tangible property,
whether privately or publicly owned, for flood and storm protection
services, including, but not limited to, storm drainage and treatment
systems and sandstorm protection systems.
(g) The district may also pay in full all amounts necessary to
eliminate any fixed special assessment liens or to pay, repay, or
defease any obligation to pay or any indebtedness secured by any
tax, fee, charge, or assessment levied within the area of a
community facilities district or may pay debt service on that
indebtedness. When the amount financed by the district is to pay
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1 a tax, fee, charge, or assessment imposed by a public agency other
2 than the one conducting the proceedings, and if the amount
3 provided to the other public agency will not be entirely used to
4 pay off or prepay an assessment lien or special tax obligation
5 pursuant to the property owner's legal right to do so, the written
6 consent of the other public agency is required. In addition, tax
7 revenues of a district may be used to make lease or debt service
8 payments on any lease, lease-purchase contract, or certificate of
9 participation used to finance facilities authorized to be financed
10 by the district.
11 (h) Any other governmental facilities that the legislative body
12 creating the community facilities district is authorized by law to
13 contribute revenue to, or construct, own, or operate. However, the
14 district shall not operate or maintain or, except as otherwise
15 provided in subdivisions (e) and (k), have any ownership interest
16 in any facilities for the transmission or distribution of natural gas,
17 telephone service, or electrical energy.
18 (i) (1) A district may also pay for the following:
19 (A) Work deemed necessary to bring buildings or real property,
20 including privately owned buildings or real property, into
21 compliance with seismic safety standards or regulations. Only
22 work certified as necessary to comply with seismic safety standards
23 or regulations by local building officials may be financed. No
24 project involving the dismantling of an existing building and its
25 replacement by a new building, nor the construction of a new or
26 substantially new building may be financed pursuant to this
27 subparagraph. Work on qualified historical buildings or structures
28 shall be done in accordance with the State Historical Building
29 Code (Part 2.7 (commencing with Section 18950) of Division 13
30 of the Health and Safety Code).
31 (B) In addition, within any county or area designated by the
32 President of the United States or by the Governor as a disaster area
33 or for which the Governor has proclaimed the existence of a state
34 of emergency because of earthquake damage, a district may also
35 pay for any work deemed necessary to repair any damage to real
36 property directly or indirectly caused by the occurrence of an
37 earthquake cited in the President's or the Governor's designation
38 or proclamation, or by aftershocks associated with that earthquake,
39 including work to reconstruct, repair, shore up, or replace any
40 building damaged or destroyed by the earthquake, and specifically
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including, but not limited to, work on any building damaged or
destroyed in the Loma Prieta earthquake that occurred on October
17, 1989, or by its aftershocks. Work may be financed pursuant
to this subparagraph only on property or buildings identified in a
resolution of intention to establish a community facilities district
adopted within seven years of the date on which the county or area
is designated as a disaster area by the President or by the Governor
or on which the Governor proclaims for the area the existence of
a state of emergency.
(2) Work on privately owned property, including reconstruction
or replacement of privately owned buildings pursuant to
subparagraph (B) of paragraph (1), may only be financed by a tax
levy if all of the votes cast on the question of levying the tax, vote
in favor of levying the tax, or with the prior written consent to the
tax of the owners of all property that may be subject to the tax, in
that case the prior written consent shall be deemed to constitute a
vote in favor of the tax and any associated bond issue. Any district
created to finance seismic safety work on privately owned
buildings, including repair, reconstruction, or replacement of
privately owned buildings pursuant to this subdivision, shall consist
only of lots or parcels that the legislative body finds have buildings
that were damaged or destroyed by the earthquake cited pursuant
to subparagraph (B) of paragraph (1) or by the aftershocks of that
earthquake.
(j) A district may also pay for the following:
(1) Work deemed necessary to repair and abate damage caused
to privately owned buildings and structures by soil deterioration.
"Soil deterioration" means a chemical reaction by soils that causes
structural damage or defects in construction materials including
concrete, steel, and ductile or cast iron. Only work certified as
necessary by local building officials may be financed. No project
involving the dismantling of an existing building or structure and
its replacement by a new building or structure, nor the construction
of a new or substantially new building or structure may be financed
pursuant to this paragraph.
(2) Work on privately owned buildings and structures pursuant
to this subdivision, including reconstruction, repair, and abatement
of damage caused by soil deterioration, may only be financed by
a tax levy if all of the votes cast on the question of levying the tax
vote in favor of levying the tax. Any district created to finance the
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work on privately owned buildings or structures, including
reconstruction, repair, and abatement of damage caused by soil
deterioration, shall consist only of lots or parcels on which the
legislative body finds that the buildings or structures to be worked
on pursuant to this subdivision suffer from soil deterioration.
(k) A district may also finance the acquisition, improvement,
rehabilitation, or maintenance of any real or other tangible property,
whether privately or publicly owned, for the purposes of removal
or remedial action for the cleanup of any hazardous substance
released or threatened to be released into the environment. As used
in this subdivision, "remedial action" and "removal" shall have
the meaning set forth in Sections 25322 and 25323, respectively,
of the Health and Safety Code, and "hazardous substance" shall
have the meaning set forth in Section 25281 of the Health and
Safety Code.
(~ A district may also finance and refinance the acquisition,
installation, and improvement of energy efficiency, water
conservation, and renewable energy improvements that are affixed,
as specified in Section 660 of the Civil Code, to or on real property
and in buildings, whether the real property or buildings are
privately or publicly owned. Energy efficiency, water conservation,
and renewable energy improvements financed by a district may
only be installed on a privately owned building and on privately
owned real property with the prior written consent of the owner
or owners of the building or real property. This chapter shall not
be used to finance installation of energy efficiency, water
conservation, and renewable energy improvements on a privately
owned building or on privately owned real property in connection
with the initial construction of a residential building unless the
initial construction is undertaken by the intended owner or
occupant.
(m) Any improvement on private property authorized to be
financed by this section shall constitute a "public facility" for
purposes of this chapter and. a "public improvement" for purposes
of Part 1 (commencing with Section 3100) and Part 2 (commencing
with Section 3110) of Division 4.5 of the Streets and Highways
Code, whether the improvement is owned by a private entity, if
the legislative body has determined that the improvement provides
a public benefit, or the improvement is owned by a public agency.
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SB 279
SEC. 2. Section 53324 of the Government Code is amended
to read:
53324. (a) If 50 percent or more of the registered voters, or
six registered voters, whichever is more, residing within the
territory proposed to be included in the district, or the owners of
one-half or more of the area of the land in the territory proposed
to be included in the district and not exempt from the special tax,
file written protests against the establishment of the district, and
protests are not withdrawn so as to reduce the value of the protests
to less than a majority, no further proceedings to create the
specified community facilities district or to authorize the specified
special tax shall be taken for a period of one year from the date of
the decision of the legislative body.
If the majority protests of the registered voters or of the
landowners are only against the furnishing of a specified type or
types of facilities or services within the district, or against levying
a specified special tax, those types of facilities or services or the
specified special tax shall be eliminated from the resolution of
formation.
(b) This section does not apply to the formation of a district
pursuant to Section 53328.1.
SEC. 3. Section 53328.1 is added to the Government Code, to
read:
53328.1. (a) As an alternate and independent procedure for
forming a community facilities district, the legislative body may
form a community facilities district that initially consists solely
of territory proposed for annexation to the community facilities
district in the future, with the condition that a parcel or parcels
within that territory may be annexed to the community facilities
district and subjected to the special tax only with the unanimous
approval of the owner or owners of the parcel or parcels at the
time that the parcel or parcels are annexed. In that case, the
legislative body shall follow the procedures set forth in this article
for the formation of a community facilities district, with the
following exceptions:
(1) The legislative body shall not be obligated to specify the
rate or rates of special tax in the resolution of intention or the
resolution of formation, provided that~re both of the following
are met:
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(A) The resolution of intention and the resolution of formation
include a statement that the rate shall be established in an amount
required to finance or refinance the authorized improvements and
to pay the district's administrative expenses.
(B) The maximum rate of special tax applicable to a parcel or
parcels shall be specified in the unanimous approval described in
this section relating to the parcel or parcels.
(2) In lieu of approval pursuant to an election held in accordance
with the procedures set forth in Sections 53326, 53327, 53327.5,
and 53328, the appropriations limit for the community facilities
district, the applicable rate of the special tax and the method of
apportionment and manner of collection of that tax, and the
authorization to incur bonded indebtedness for the community
facilities district shall be specified and be approved by the
unanimous approval of the owner or owners of each parcel or
parcels at the time that the parcel or parcels are annexed to the
community facilities district. No additional hearings or procedures
are required, and the unanimous approval shall be deemed to
constitute a unanimous vote in favor of the appropriations limit
for the community facilities district, the authorization to levy the
special tax on the parcel or parcels, and the authorization to incur
bonded indebtedness for the community facilities district.
(3) Notwithstanding Section 53324, this paragraph establishes
the applicable protest provisions in the event a local agency forms
a community facilities district pursuant to the procedures set forth
in this section. If 50 percent or more of the registered voters, or
six registered voters, whichever is more, residing within the
territory proposed to be annexed to the community facilities district
in the future, or if the owners of one-half or more of the area of
land proposed to be annexed in the future and not exempt from
the special tax, file written protests against establishment of the
community facilities district, and protests are not withdrawn so as
to reduce the protests to less than a majority, no further proceedings
to form the community facilities district shall be undertaken for a
period of one year from the date of decision of the legislative body
on the issues discussed at the hearing. If the majority protests of
the registered voters or of the landowners are only against the
furnishing of a specified type or types of facilities or services
within the district, or against levying a specified special tax, those
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1 types of facilities or services or the specified special tax shall be
2 eliminated from the resolution of formation.
3 (4) The legislative body shall not record a notice of special tax
4 lien against any parcel or parcels in the community facilities district
5 until the owner or owners of the parcel or parcels have given their
6 unanimous approval of the parcel or parcels' annexation to the
7 community facilities district, at which time the notice of special
8 tax lien shall be recorded against the parcel or parcels as set forth
9 in Section 53328.3.
10 (b) Notwithstanding the provisions of Section 53340, after
11 adoption of the resolution of formation for a community facilities
12 district described in subdivision (a), the legislative body may, by
13 ordinance, provide for the levy of the special taxes on parcels that
14 will annex to the community facilities district at the rate or rates
15 to be approved unanimously by the owner or owners of each parcel
16 or parcels to be annexed to the community facilities district and
17 for apportionment and collection of the special taxes in the manner
18 specified in the resolution of formation. No further ordinance shall
19 be required even though no parcels may then have annexed to the
20 community facilities district.
21 (c) The local agency may bring an action to determine the
22 validity of any special taxes levied pursuant to this chapter and
23 authorized pursuant to the procedures set forth in this section
24 pursuant to Chapter 9 (commencing with Section 860) of Title 10
25 of Part 2 of the Code of Civil Procedure. Notwithstanding Section
26 53359, if an action is brought by an interested person pursuant to
27 Section 863 of the Code of Civil Procedure to determine the
28 validity of any special taxes levied against a parcel pursuant to
29 this chapter and authorized pursuant to the procedures set forth in
30 this section, the action shall be brought pursuant to Chapter 9
31 (commencing with Section 860) of Title 10 of Part 2 of the Code
32 of Civil Procedure, but shall, notwithstanding the time limits
33 specified in Section 860 of the Code of Civil Procedure, be
34 commenced within 15 days after the date on which the notice of
35 special tax lien is recorded against the parcel. Any appeal from a
36 judgment in any action or proceeding described in this subdivision
37 shall be commenced within 30 days after entry of judgment.
38 (d) A community facilities district formed pursuant to this
39 section may only finance facilities pursuant to subdivision (~ of
40 Section 53313.5.
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1 SEC. 4. Section 53329.6 is added to the Government Code, to
2 read:
3 53329.6. In order to reduce the procedural burdens on local
4 agencies, this chapter establishes certain procedures by which one
5 or more property owners may vote in favor of special taxes, bonded
6 indebtedness, an appropriations limit, and annexation to a district
7 by unanimous approval. The Legislature hereby finds and declares
8 that any unanimous approval constitutes the vote of the qualified
9 elector in favor of the matters addressed in the unanimous approval
10 for purposes of the California Constitution, including, but not
11 limited to, Articles XIII A and XIII C.
12 SEC. 5. Section 53355.5 is added to the Government Code, to
13 read:
14 53355.5. (a) As an alternate and independent procedure for
15 conducting an election on the proposition to authorize bonded
16 indebtedness for a community facilities district formed pursuant
17 to Section 53328.1, and in lieu of the procedure set forth in Sections
18 53353.5, 53354, and 53355, the proposition to authorize bonded
19 indebtedness maybe approved by the owner or owners of a parcel
20 or parcels of property at the time that the parcel or parcels are
21 annexed to the community facilities district pursuant to the
22 unanimous approval described in Section 53328.1. In that event,
23 no additional hearings or procedures shall be required, and
24 unanimous approval shall be deemed to constitute a unanimous
25 vote in favor of the proposition.
26 (b) The local agency may bring an action, pursuant to Chapter
27 9 (commencing with Section 860) of Title 10 of Part 2 of the Code
28 of Civil Procedure, to determine the validity of any bonds issued
29 pursuant to this chapter and authorized pursuant to the procedures
30 set forth in this section. Notwithstanding the provisions of Section
31 53359, if an action is brought by an interested person pursuant to
32 Section 863 of the Code of Civil Procedure to determine the
33 validity of any bonds issued pursuant to this chapter and authorized
34 pursuant to the procedures set forth in this section, the action shall
35 be brought pursuant to Chapter 9 (commencing with Section 860)
36 of Title 10 of Part 2 of the Code of Civil Procedure but shall,
37 notwithstanding the time limits specified in Section 860 of the
38 Code of Civil Procedure, be commenced within 30 days after the
39 effective date of the resolution described in Section 53351. Any
40 appeal from a judgment in any action or proceeding described in
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1 this subdivision shall be commenced within 30 days after entry of
2 judgment.
3 SEC. 6. Section 53355.7 is added to the Government Code, to
4 read:
5 53355.7. The refusal by a person to undertake or cause to be
6 undertaken an act relating to Chapter 2.5 (commencing with
7 Section 53311) of Part 1 of Division 2 of Title 5, including
8 formation of, or annexation to, a community facilities district,
9 voting to levy a special tax, or authorizing another to vote to levy
10 a special tax, shall not be a factor when considering the approval
11 of a legislative or adjudicative act, or both, including, but not
12 limited to, the planning, use, or development of real property or
13 any change in governmental organization or reorganization, as
14 defined by Section 56021 or 56037, if the purpose of the
15 community facilities district is to finance energy efficiency, water
16 conservation, and renewable energy improvements.
17 SEC. 7. The Legislature finds and declares that global warming
18 poses a serious threat to the economic well-being, public health,
19 natural resources, and the environment of the state, and that action
20 taken by the state to reduce emissions of greenhouse gases will
21 have far reaching effects by encouraging other states, the federal
22 government, and other countries to act. California has a tradition
23 of environmental leadership and wishes to be at the forefront of
24 national and international efforts to reduce emissions of greenhouse
25 gases. In furtherance of these efforts to reduce emissions of
26 greenhouse gases, the Legislature declares that a public purpose
27 will be served by providing the legislative body of a local agency
28 with the authority to use special taxes pursuant to the Mello-Roos
29 Community Facilities Act of 1982 to finance the installation of
30 energy efficiency and renewable energy improvements that are
31 affixed, as specified in Section 660 of the Civil Code, to residential,
32 commercial, industrial, or other property.
33 The Legislature further finds and declares that the growing
34 population, climate change, and the need to protect and grow
35 California's economy while protecting and restoring our fish and
36 wildlife habitats make it essential that the state manage its water
37 resources as efficiently as possible. Section 2 of Article X of the
38 California Constitution declares: "It is hereby declared that because
39 of the conditions prevailing in this State the general welfare
40 requires that the water resources of the State be put to beneficial
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1 use to the fullest extent of which they are capable, and that the
2 waste or unreasonable use or unreasonable method of use of water
3 be prevented, and that the conservation of such waters is to be
4 exercised with a view to the reasonable and beneficial use thereof
5 in the interest of the people and for the public welfare." Governor
6 Schwarzenegger, in his Executive Order S-06-08, proclaimed a
7 condition of statewide drought and ,ordered implementation of
8 additional actions to promote water conservation which will
9 contribute to achieving long-term reductions in water use. Governor
10 Schwarzenegger has further called fora 20-percent per capita
11 reduction in urban water use statewide by the year 2020. Reduced
12 water use through conservation provides significant energy and
13 environmental benefits, and can help protect water quality, improve
14 streamflows, and reduce greenhouse gas emissions. There are many
15 water conservation practices that produce significant energy and
16 other resource savings that should be encouraged as a matter of
17 state policy. The Legislature also declares that a public purpose
18 will be served by providing the legislative body of a local agency
19 with the authority to use special taxes pursuant to the Mello-Roos
20 Community Facilities Act of 1982 to finance the installation of
21 water conservation improvements that are attached to residential,
22 commercial, industrial, or other property.
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