BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 184|
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THIRD READING
Bill No: AB 184
Author: Swanson (D)
Amended: As introduced
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 5/18/11
AYES: Wolk, Huff, DeSaulnier, Hancock, Hernandez, Kehoe,
Liu
NO VOTE RECORDED: Fuller, La Malfa
ASSEMBLY FLOOR : 49-10, 4/14/11 - See last page for vote
SUBJECT : Contractual assessment programs: seismic
safety improvements
SOURCE : City of Oakland
DIGEST : This bill adds seismic strengthening
improvements to the types of improvements to private
property that can be financed with voluntary contractual
assessments.
ANALYSIS : A benefit assessment is an involuntary charge
that property owners pay for a public improvement or
service that provides a special benefit to their property.
The amount of the assessment must be directly related to
the amount of the benefit that the property receives.
Benefit assessments can finance public projects like flood
control, street improvement, streetlights, and public
landscaping.
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As an alternative to benefit assessments, and only with the
free and willing
consent of affected property owners, public agencies can
use "voluntary contractual assessments" to finance:
1. Public improvements to developed parcels (SB 837
�McQuorquodale], Chapter 1388, Statutes of 1987).
2. Renewable energy sources or energy efficiency
improvements that are permanently fixed to real property
(AB 811 �Levine], Chapter 159, Statutes of 2008).
3. Water efficiency improvements that are permanently fixed
to real property (AB 474 �Blumenfield], Chapter 444,
Statutes of 2009).
4. Electric vehicle charging infrastructure (SB 1340
�Kehoe], Chapter 649, Statutes of 2010).
To use voluntary contractual assessments, a public agency's
legislative body must adopt a resolution, which:
1. Determines that it would be convenient, advantageous,
and in the public interest to designate an area within
which officials and property owners may enter into
contractual assessments and make related financing
arrangements.
2. Identifies the kinds of public works which may be
financed.
3. Describes the area where contractual assessments may be
used.
4. Describes the proposed financing arrangements, including
criteria for determining the creditworthiness of a
property owner.
5. States the time and place for a public hearing.
6. Directs an official to prepare a detailed report about
the contractual assessment program and consult with the
county auditor and county controller regarding fees.
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The report on the proposed assessment program must contain:
1. A map of the area where contractual assessments will be
offered.
2. A draft contract specifying the terms and conditions.
3. A list of the types of facilities and improvements which
may be financed.
4. The official authorized to enter into contractual
assessments on behalf of the county or city.
5. The maximum aggregate dollar amount of contractual
assessments.
6. A method for prioritizing requests from property owners
for financing.
7. A plan for raising a capital amount required to pay for
work performed pursuant to contractual assessments.
8. Information about the county auditor's and county
controller's fees.
The legislative body must give written notice to all water
or electricity providers within a proposed area where
voluntary contractual assessments will be offered. After
holding a public hearing, the legislative body may adopt a
resolution confirming the program as detailed in the
report, may confirm a modified version of the report, or
may abandon the proceedings.
The legislative body must designate an office to:
1. Prepare the annual roll of assessment obligations on
property subject to a voluntary contractual assessment.
2. Establish procedures for responding to inquiries
concerning estimated voluntary contractual assessment
liabilities.
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The legislative body must provide for documents to be
recorded with the county recorder, providing notice of a
contractual assessment on real property. A property owner
may not participate in a contractual assessment program if
the owner's participation would result in the total amount
of any annual property taxes and assessments exceeding five
percent of the property's market value, as determined at
the time of approval of the owner's contractual assessment.
This bill:
1. Authorizes the use of contractual assessments to finance
the installation of seismic strengthening improvements
that are permanently fixed to residential, commercial,
industrial, agricultural, or other real property.
2. Specifies that, for financing the installation of
seismic strengthening improvements, "public agency"
means a city, county, or city and county.
3. Requires that a resolution of intention adopted by the
legislative body of a public agency to establish a
voluntary contractual assessment program relating to
seismic strengthening improvements must identify the
kinds of seismic strengthening improvements that may be
financed. This bill requires the resolution of
intention to direct an appropriate public agency
official to prepare a report on the proposed assessment
program and requires that report to identify the types
of seismic strengthening improvements that may be
financed through the use of contractual assessments.
4. Authorizes, upon written consent of an authorized public
agency official, the proposed seismic strengthening
financing program to allow a property owner to purchase
seismic strengthening-related equipment and materials
directly and to contract directly for the installation
of seismic strengthening improvements.
This bill contains legislative findings and declarations
regarding the need to finance seismic strengthening
improvements using contractual assessments.
Comments
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This bill builds upon a substantial body of state law that
lets local officials use public financing to help private
property owners pay for seismic improvements. Unreinforced
masonry buildings and "soft story" buildings with large
open spaces on the ground floor are serious earthquake
hazards. The Association of Bay Area Governments says
that 26,000 of Oakland's 163,000 housing units will become
uninhabitable when the Hayward Fault has a major
earthquake. Because commercial loans for earthquake
improvements can be expensive, local officials want to
accelerate retrofit work on vulnerable buildings by loaning
money to private property owners at below-market rates.
This bill provides local officials with another tool to
help property owners pay for structural upgrades that save
lives, protect rescue workers, and reduce economic
disruption after a major earthquake.
Prior Legislation
This bill replicates AB 1755 (Swanson), Session of 2009-10.
Governor Schwarzenegger vetoed that bill, stating that he
did not support expanding contractual assessment programs
to include seismic improvements.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/19/11)
City of Oakland (source)
American Federation of State, County and Municipal
Employees
Apartment Association - California Southern Cities
California Apartment Association
California's Assessors Association
California Association of Realtors
Oakland Mayor Jean Quan
ASSEMBLY FLOOR : 49-10, 4/14/11
AYES: Ammiano, Atkins, Beall, Block, Blumenfield, Bonilla,
Bradford, Brownley, Buchanan, Charles Calderon, Campos,
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Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer,
Fletcher, Fong, Fuentes, Gatto, Gordon, Hall, Hayashi,
Roger Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries,
Lara, Bonnie Lowenthal, Ma, Mitchell, Monning, Nestande,
Pan, Perea, V. Manuel P�rez, Portantino, Skinner, Smyth,
Solorio, Swanson, Torres, Wieckowski, Yamada, John A.
P�rez
NOES: Achadjian, Bill Berryhill, Donnelly, Hagman,
Halderman, Mansoor, Miller, Nielsen, Norby, Silva
NO VOTE RECORDED: Alejo, Allen, Butler, Conway, Cook,
Furutani, Galgiani, Garrick, Gorell, Grove, Harkey,
Jones, Knight, Logue, Mendoza, Morrell, Olsen, Valadao,
Wagner, Williams, Vacancy
AGB:kc 5/19/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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