Bill Text: CA AB122 | 2013-2014 | Regular Session | Amended
Bill Title: Energy improvements: financing.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB122 Detail]
Download: California-2013-AB122-Amended.html
BILL NUMBER: AB 122 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 6, 2014
AMENDED IN ASSEMBLY APRIL 23, 2013
AMENDED IN ASSEMBLY APRIL 1, 2013
AMENDED IN ASSEMBLY MARCH 19, 2013
INTRODUCED BY Assembly Member Rendon
JANUARY 14, 2013
An act to add Chapter 13 (commencing with Section 25987.1) to
Division 15 of the Public Resources Code, relating to energy, and
making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 122, as amended, Rendon. Energy: energy assessment:
nonresidential buildings: Energy improvements:
financing.
Existing law requires the State Energy Resources Conservation and
Development Commission to implement a program to provide financial
assistance for energy efficiency projects.
This bill would enact the Nonresidential Building
Real Property Energy Retrofit Financing Act of
2013 2014 and would require the
commission to establish the Nonresidential Building
Real Property Energy Retrofit Financing
Program and to develop a request for proposal for a 3rd-party
administrator by July 1, 2014, to develop and operate the
Program. The program to would
provide financial assistance, through authorizing the issuance
of, among other things, revenue bonds, to owners of eligible
nonresidential buildings real properties, as defined,
for implementing energy improvements for their properties. The
bill would require that the bonds be secured by the recording of an
energy remittance repayment agreement lien, as defined, on the
deed of the property eligible real property
for which the improvements are performed. The bill would
require the State Board of Equalization a
loan servicer to collect installment payments from owners of
eligible real properties whose applications have been
approved by the commission. The bill would require the
commission, within 6 months after the first 2 years of implementation
of the program or after the expenditure of the first $250,000,000 of
the proceeds derived by issuance of the revenue bonds, whichever is
earlier, to prepare and make publicly available a report on the
efficacy of the program in achieving the purposes of the program and
recommendations that would enhance the ability of the program to
achieve those purposes. The bill would prohibit the commission from
additional expenditure of the proceeds until the commission holds at
least one public hearing and take public comments on the report.
The bill would require the State Board of Equalization
to collect repayment installments that are delinquent.
The bill would require the commission to meet for the
purpose of approving applicants to participate in the program.
The bill would authorize the California Alternative Energy
and Advanced Transportation Financing Authority, on behalf of the
commission, to issue and renew the negotiable revenue bonds to
generate moneys to finance energy improvements for approved
applicants.
The bill would establish the Nonresidential Building
Real Property Energy Retrofit Debt Servicing
Fund in the State Treasury and the Loan Loss Reserve Account and
Administration Account within the fund. The bill would require the
State Board of Equalization commission
to deposit the installment payment received from the owners of
eligible buildings real properties into
the fund and certain fees collected into the specified accounts. The
bill would continuously appropriate the moneys in the fund and the
accounts to repay the principal and interest on the bonds, and to
cover the administrative costs incurred by the authority, the
commission, and the State Board of Equalization, thereby making an
appropriation.
The bill would require the Director of Finance to transfer, as a
loan, up to $1,000,000, to the authority, and up to $7,000,000, to
the commission, from the General Fund for the purposes of
implementing the program. The bill would require the loans to be
repaid on or before January 1, 2024.
Existing law establishes incentives in the form of grants and
loans to low-income residents, small businesses, and residential
property owners for constructing and retrofitting buildings to be
more energy efficient.
The bill would require the State Energy Resources Conservation and
Development Commission, to the extent it determines necessary to
effectively complete it duties under the act, to analyze and evaluate
specified standards developed for nonresidential energy building
retrofits.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 13 (commencing with Section 25987.1) is added
to Division 15 of the Public Resources Code, to read:
CHAPTER 13. NONRESIDENTIAL BUILDING ASSESSMENT
REAL PROPERTY ENERGY RETROFIT FINANCING
Article 1. General Provisions and Definitions
25987.1. This act shall be known, and may be cited, as the
Nonresidential Building Real Property
Energy Retrofit Financing Act of 2013. 2014.
25987.2. The purpose of this chapter is to facilitate private
financing to enable private nonresidential
building real property owners
and eligible public entities to invest in clean energy
improvements, renewable energy, and conservation; to incentivize
private equity managers to invest in clean energy improvements,
integrate the smart energy economy, and stimulate the state economy
by directly creating jobs for contractors and other persons who
complete new energy improvements; and to reinforce the leadership
role of the state in the new energy economy, thereby attracting
energy manufacturing facilities and related jobs to the state.
25987.3. The Legislature finds and declares all of the following:
(a) Nonresidential buildings real
properties represent a huge opportunity to significantly
increase energy efficiency and reduce greenhouse gas emissions. To do
this, California needs to address the design, construction, and
operation of these buildings.
(b) Investment in building performance upgrades is an intelligent
business decision. Building performance upgrades lower operating
costs, improve occupant comfort, hedge against utility price
increases, demonstrate commitment to tenant well-being, reduce
exposure to regulation, help the environment, and ultimately boost
property values.
(c) It is in the best interest of the state and its citizens to
enable and encourage the owners of eligible nonresidential real
property to invest in new energy improvements, including
building energy efficiency improvements that qualify for
investor-owned utility or publicly owned utility programs, water
efficiency improvements, and renewable energy improvements, by
enacting this division to establish, develop, finance, implement, and
administer a new energy improvement program that provides for both
building energy efficiency improvements and renewable energy
improvements and to assist those owners who choose to participate in
the program to complete new energy improvements to their properties
because of the following:
(1) New energy improvements, including building energy efficiency
improvements and renewable energy improvements, can provide positive
cashflow when the costs of the improvements are spread out over a
long enough time that a building's cumulative utility bill cost
savings exceed the amount of the liens recorded on the eligible
building to ensure payment for the improvements.
(2) Many owners of eligible nonresidential buildings
real properties are unable to fund a new energy
improvement because the owners do not have sufficient liquid assets
to directly fund the improvement or are unable or unwilling to incur
the negative net cashflow likely to result if the owner uses a
typical existing loan program to fund the improvement.
(d) Reduction in the amount of emissions of greenhouse gases and
environmental pollutants, resulting from increased efficiencies and
the resulting decreased use of traditional nonrenewable fuels, will
improve air quality and may help to mitigate climate change.
(e) The nonresidential building owners of
nonresidential real properties who participate in the program
established pursuant to this division to assist them in
completing new energy improvements, including building energy
efficiency improvements and renewable energy improvements, to the
building shall do so voluntarily.
25987.4. Unless the context otherwise requires, for the purposes
of this chapter, the following terms have the following meanings:
(a) (1) "Alternative sources of energy" or "alternative
"Alternative energy sources" means energy from
renewable cogeneration or gas-fired cogeneration technology that
meets the greenhouse gas emissions and efficiency standards
applicable to the Self-Generation Incentive Program in effect at the
time of the application, energy storage technologies, or energy from
solar, biomass, wind, or geothermal systems, or fuel cells, the
efficient use of which will reduce the use of conventional energy
fuels.
(2) The system shall be sized appropriately to offset part or all
of the applicant's own energy demand for the permanent fixtures that
consume energy, as if all cost-effective energy efficiency measures
have been installed, and shall be located on the same property where
the applicant's own energy demand eligible
real property is located.
(b) "Applicant" means a person, or an entity or group of entities,
engaged in business or operations in the state, whether organized
for profit or not for profit that owns a nonresidential
building real property and applies for financial
assistance from the commission for the purpose of implementing a
project in a manner prescribed by the commission.
(c) "Authority" means the California Alternative Energy and
Advanced Transportation Financing Authority established pursuant to
Section 26004.
(d) "Board" means the State Board of Equalization.
(e) "Building energy efficiency improvement" means one or more
installations or modifications that are permanently affixed to the
building or located on the premises of the building site, for which a
building permit is issued after January 1, 2014,
2015, to an eligible building that either qualifies for an
investor-owned utility or publicly owned utility energy efficiency
program or is designed to reduce the energy consumption of the
building, and that may include, but is not limited to, all of the
following to the extent they qualify:
(1) High-efficiency mechanical equipment.
(2) High-efficiency electrical equipment.
(3) Capturing or reducing heat gain or solar shading, including
the roof and south and west walls, and not just glazing.
(4) High-efficiency water heating.
(5) Insulation in walls, roofs, floors, and foundations and in
heating and cooling distribution systems.
(6) Fenestration and door replacements, and door modifications
that reduce energy consumption.
(7) Automatic energy control systems.
(8) Heating, ventilating, or air conditioning and distribution
system modifications or replacements.
(9) Caulking and weather stripping.
(10) Replacement or modification of luminaries to increase the
energy efficiency of the system, or additional lighting controls to
reduce electric lighting during periods of vacancy.
(11) Energy recovery systems.
(12) Daylighting systems and associated lighting controls for
daylight harvesting.
(13) Building commissioning or retrocommissioning.
(f) "Conventional energy fuel" means any of the following:
(1) A fuel derived from petroleum deposits, including, but not
limited to, oil, heating oil, gasoline, and fuel oil.
(2) Natural gas, including liquefied natural gas , other than
that used in cogeneration gas-fired technology .
(3) Nuclear fissionable materials.
(4) Coal.
(g) "Delinquent repayment installment" means a due and payable
repayment installation that was not paid within the time specified in
the schedule for repayment.
(g)
(h) "Demand response" means reductions or shifts in
electricity consumption by customers in response to either economic
or reliability signals.
(i) "Due and payable" means the date as specified in the schedule
for repayment for each repayment installment.
(h)
(j) "Eligible building" real
property " means a nonresidential building that
completed construction on or before January 1, 2014,
2015, and is located within the boundaries of
the state.
(i)
(k) "Energy remittance repayment agreement" means a
contractual agreement between an eligible building
owner of an eligible real property and the commission,
secured by a lien, as described in Section 25987.21, recorded in the
county where the property is situated and on an eligible
building real property specially benefited by
a new energy improvement the project
for which the commission will make reimbursement or a direct payment
to the party financing the energy improvements
project , and "contractual energy remittance" means that
reimbursement or direct payment. The amount to be repaid pursuant to
the energy remittance repayment agreement shall include the costs
necessary to finance the building energy efficiency
improvements project less any rebates, grants,
and other direct financial assistance received by the owner pursuant
to other law and law, a loan loss
reserve fee , in an amount to be established by the
third-party administrator in consultation with the commission and
the any warehouse financier under
contract entered into pursuant to paragraph (8)
(3) of subdivision (a) of Section 25987.25 , to
insure against nonperformance of the loan and other losses of the
program, and a program administrative cost fee.
(j)
(l) "Energy efficiency specialist" means an individual
or business authorized or certified by rules of the commission to
analyze, evaluate, or install a renewable energy source,
building energy efficiency improvement, or water efficiency
improvement for eligible property project .
(k)
(m) "Financial assistance" means either of the
following:
(1) Loans, loan loss reserves, interest rate reductions, secondary
loan purchase, insurance, guarantees or other credit enhancements or
liquidity facilities, contributions of money, property, labor, or
other items of value, or any combination thereof, as determined and
approved by the commission.
(2) Other types of assistance the commission determines are
appropriate.
(l)
(n) "Loan balance" means the outstanding principal
balance of loans secured by a mortgage or deed of trust with a first
or second lien on eligible real property.
(m)
(o) "Loan loss reserve fee" means a fee that serves as
collateral in the event of a loan default.
(n)
(p) "Nonresidential Building
Real Property Energy Retrofit Bond" means a bond issued
pursuant to Section 25987.31 that is secured by an energy remittance
repayment agreement lien on real property
and is entered into voluntarily to finance the
installation of renewable energy sources, building energy efficiency
improvement or retrofits, or water efficiency improvements
project .
(o)
(q) "Participant" means a person, or an entity or group
of entities, engaged in business or operations in the state, whether
organized for profit or not for profit, that, as a qualified
applicant , is approved for financial assistance pursuant
to Article 2 (commencing with Section 25987.5) and has entered into
an energy remittance repayment agreement with the commission for the
purpose of implementing a project in a manner prescribed by the
commission. "Participant" includes a subsequent owner taking
title to real property subject to an energy remittance repayment
agreement lien.
(p)
(r) "Portfolio" means an aggregation of approved
applications.
(q)
(s) "Program" means the Nonresidential
Building Real Property Energy Retrofit Financing
Program established by the commission in accordance with Section
25987.7.
(r)
(t) "Program administration cost fee" means a fee
imposed for the costs incurred by the commission, the authority, and
the State Board of Equalization to administer the program.
(s)
(u) "Project" means an improvement to an eligible
building real property that constitutes
a water efficiency improvement, alternative source of
energy, renewable energy improvement, or
building energy efficiency improvement.
(t)
(v) "Qualified applicant" means a person or business
entity who does all of the following:
(1) Owns an eligible building real
property that has a ratio of loan balance to its appraised
value not to exceed 85 percent and percent,
which is subject to adjustment by the program administrator at
the time the person's program application is approved, as shown in
the records of the county assessor, unless the holder of the deed of
trust or mortgage recorded against the eligible real
property that has priority over all other deeds of trust or mortgages
recorded against the eligible real property has consented
in writing to the recording of an energy remittance repayment
agreement lien pursuant to this division against the
eligible real property.
(2) Timely submits to the commission a complete application, which
notes the existence of any priority mortgage or deed of trust on the
eligible property and the identity of the holder of the mortgage or
deed of trust, to join the program and consents to the levying of a
special assessment lien in the amount of the
energy remittance repayment agreement on the real
property pursuant to this chapter.
(3) Meets standard of credit worthiness that the commission may
establish.
(u)
(w) "Renewable energy" means heat, processed heat,
space heating, water heating, steam, space cooling, refrigeration,
mechanical energy, electricity, fuel cells, or energy in any form
convertible to these uses, and including energy storage technologies,
that does not expend or use conventional energy fuels, and that uses
any of the following electrical generation technologies:
(1) Biomass.
(2) Solar thermal.
(3) Photovoltaic.
(4) Wind.
(5) Geothermal.
(v)
(x) "Renewable energy improvement" means one or more
fixtures, products, systems, or devices, or an interacting group of
fixtures, products, systems, or devices, that use an alternative
source of energy energy source , are
permanently affixed to to, or located on,
the building or located on the premises of the
building site, real property, and directly
benefit an eligible building real property
or that are installed on the customer side of a meter of an
eligible building real property and
that produce renewable energy from renewable resources,
including, but not limited to, photovoltaic, solar thermal, small
wind, biomass, fuel cells, or geothermal systems such as ground
source heat pumps, as may be approved by the commission .
(y) "Repayment installation" means the monthly amount specified
pursuant to the agreed schedule for repayment approved by the
commission.
(w)
(z) "Third-party administrator" means an entity
selected by the commission through a request for a
proposal to manage project applications and make recommendations to
the commission as to an individual project's compliance
with this chapter.
(x)
(aa) "Warehouse financier" means a financial entity,
bank, or pension fund, chosen by the commission through a request for
proposal to provide an ongoing and revolving source of financing for
projects applications approved
pursuant to Section 25987.20.
Article 2. Nonresidential Building
Real Property Energy Retrofit Financing Program
25987.5. The purpose of the Nonresidential Building
Real Property Energy Retrofit Financing Program
is to help provide the special benefits of water efficiency
improvements, alternative energy, renewable
energy improvements, and building energy efficiency
improvements to owners of eligible buildings
real properties who voluntarily participate in the program by
establishing, developing, financing, and administering a program to
assist those owners in completing improvements.
25987.6. The commission shall have and exercise all rights and
powers necessary or incidental to or implied from the specific powers
granted to the commission by this chapter. Those specific powers
shall not be considered as a limitation upon any power necessary or
appropriate to carry out the purposes and intent of this chapter.
25987.7. (a) The commission shall establish, develop, finance,
and administer, pursuant to consistent with
Section 25987.9, the Nonresidential Building Energy
Real Property Retrofit Financing Program. The
commission shall provide general direction and oversight to the
authority and board as they complete duties specified in this
chapter. The program shall be designed to provide financial
assistance for an owner of an eligible building
real property to use one or more energy efficiency
specialists to retrofit or benefit the property with one
or more alternative energy sources or renewable
energy improvements, building energy efficiency improvements, or
water efficiency improvements, by applying to the commission for
inclusion of the owner's project in a portfolio that will be financed
through the use of the revenue bonds issued pursuant to this
chapter. These bonds shall be secured by revenues generated through
energy remittance repayment agreements
agreement liens recorded on the buildings
against the real properties benefited by the projects in
the portfolio.
(b) The program shall provide financial assistance for
improvements when the total energy and water cost savings realized by
the real property owner, and any successor or successors
to the real property owner, during the useful life of the
improvements, as determined by an analysis required pursuant to
subdivision (i) of Section 25987.13 are expected to equal or exceed
the total costs incurred by the owner pursuant to the program.
(c) In developing rules to certify an energy efficiency
specialist, the commission shall consult with the Public Utilities
Commission, the investor-owned utilities, the contractor community,
and other entities the commission deems appropriate and consider
existing trade certifications or licensing requirements applicable to
occupations that perform work contemplated pursuant to this chapter.
(d) (1) Within six months after the first two years of
implementation of the program established pursuant to subdivision (a)
or after the expenditure of the first two hundred fifty million
dollars ($250,000,000) of proceeds authorized pursuant to Section
25987.29, whichever occurs earlier, the commission shall prepare and
make publicly available a report on the efficacy of the program in
achieving the purposes of the program as specified in Section 25987.5
and recommendations that would enhance the ability of the program to
achieve those purposes.
(2) The commission shall post the report on its Internet Web site.
(3) Prior to the additional expenditure of the proceeds authorized
pursuant to Section 25987.29, the commission shall hold at least
a one public hearing and take public
comments on the report.
25987.8. To receive financial assistance pursuant to this
chapter, a qualified applicant shall contractually agree to the
recording of an energy remittance repayment agreement lien
on the eligible building real property
that is being retrofitted or benefited .
25987.9. By July 1, 2014, 2015, the
commission shall develop a request for proposal to develop the
program by a third-party administrator. The third-party administrator
shall administer the program and establish an automated, asset-based
underwriting system for all eligible buildings
real properties in the state. The third-party
administrator shall provide consultation to the commission in
developing guidelines for the program. The third-party administrator
shall provide an independent energy advisor to assist
building owners of real properties in evaluating
proposals for energy efficiency and renewable energy
improvements projects . The third-party
administrator shall provide a loan servicer to service the loans.
The party selected as the third-party administrator shall only
be selected if the program proposal submitted by the party requires
all costs, including startup costs of the program, to be covered by
the loan recipients, the administrator, the bond purchasers, or some
combination thereof. The program selected shall not include General
Fund costs or liabilities, with the exception of loans from
the General Fund pursuant to Section 25987.41 utilized for startup
costs. liabilities.
25987.10. The third-party administrator shall establish
underwriting guidelines that consider an applicant's qualifications,
and other appropriate factors, including, but not limited to, credit
reports and loan-to-value ratios, consistent with good and customary
lending practices, necessary for the authority to obtain a bond
rating for bonds issued pursuant to Article 3 (commencing with
Section 25987.29) for a successful bond sale.
25987.11. The third-party administrator shall disclose to an
owner of a nonresidential building an
eligible real property all fees imposed pursuant to this
chapter, including the loan loss reserve fee, the program
administration cost fee, and the interest rate charged, prior to the
submission of an application by the building
owner.
25987.12. (a) An owner of an eligible building
real property who wishes to undertake an improvement
shall submit to the third-party administrator an application to
participate in the program.
(b) The submission of an application is deemed to be a voluntary
agreement by the owner for the commission to record the energy
remittance repayment agreement on the deed of
lien against the eligible building
real property upon the approval of the application.
(c) The application form developed by the third-party
administrator shall include a statement in no less than 12-point type
stating the following:
SUBMISSION OF THIS APPLICATION CONSTITUTES THE VOLUNTARY CONSENT
OF THE APPLICANT FOR THE RECORDATION OF THE ENERGY REMITTANCE
REPAYMENT AGREEMENT ON THE DEED OF LIEN
AGAINST THE ELIGIBLE REAL PROPERTY. UPON THE
APPROVAL BY THE COMMISSION OF THE APPLICATION AND THE RECORDATION OF
THE ENERGY REMITTANCE REPAYMENT AGREEMENT,
AGREEMENT LIEN, A LIEN IN THE AMOUNT SPECIFIED IN THE ENERGY
REMITTANCE REPAYMENT AGREEMENT SHALL BE SECURED BY
RECORDED ON THE PROPERTY TO SECURE THE AGREEMENT
.
25987.13. The owner of an eligible building
real property shall include all of the following
information in the application:
(a) The name, business address, and email address of the owners of
the eligible building. real property.
(b) The names of all entities that hold a secured lien on the
eligible building real property and
their contact information.
(c) The total dollar amount of liens that have been recorded
on against the eligible
building. real property.
(d) An appraisal of the value of the eligible building
real property that has been conducted within the
past six months or during an appropriate timeframe consistent with
industry practices for underwriting of nonresidential buildings.
(e) A detailed description of the alternative sources of
energy, and building energy efficiency and renewable energy
improvements being project to be funded.
(f) The name of the financial institution providing interim
financing for the improvements project
or the warehouse line of credit developed pursuant to Section
25987.26.
(g) The structure of the loan financing the alternative
sources of energy, and building energy efficiency and renewable
energy improvements project .
(h) Any information that the commission or third-party
administrator requires to verify that the owner will complete the
project.
(i) An analysis performed by an energy efficiency and
renewable energy specialist to quantify the costs of
the alternative sources of energy, and building energy
efficiency, renewable energy, and water efficiency improvements,
the project, and total energy and water cost
savings realized by the owner, owner or
his or her successor during the effective useful life of, and
estimated carbon impacts of, the improvements,
project, including an annual cashflow analysis.
(j) Copies of an application that have been made for energy
efficiency incentives identified pursuant to subdivision (d) of
Section 25987.19 for any applicable retrofits.
(k) Other information deemed necessary by the commission or the
third-party administrator.
(l) The total amount of the loan requested showing any and all
adjustments to reduce the loan amount after all federal, state,
local, and ratepayer-funded incentives have been applied.
25987.14. (a) In addition
to the information required under Section 25987.13, an applicant
shall provide in the application a detailed description of all of the
following:
(1)
(a) The eligible building. real
property.
(2)
(b) The transactional activities associated with the
eligible improvements, including the transactional costs.
(3)
(c) Other information deemed necessary by the
commission or the third-party administrator.
(b) An applicant shall agree in the application to remit repayment
installments due by an electronic funds transfer under procedures
prescribed by the board.
25987.15. (a) The third-party administrator shall make
recommendations to the commission regarding the approval or
disapproval of an application.
(b) The commission may approve and accept an applicant into the
program if both of the following conditions are met:
(1) The applicant is a qualified applicant.
(2) Prior to receiving funding for renewable energy improvement
or alternative energy sources , the applicant
shall show both of the following:
(A) Evidence of intent to make feasible energy efficiency upgrades
recommended by the analysis required pursuant to subdivision (i) of
Section 25987.13.
(B) Evidence of intent to enroll in eligible demand response
programs, if appropriate.
(c) The commission shall determine appropriate guarantees
necessary to ensure cost neutrality of the improvements that may
include the requirement that the owner of the eligible building
obtain insurance issued by an A.M. Best "A" or better rated insurance
carrier or a similar product as
approved by the commission.
25987.16. (a) Upon the mutual agreement of the participant and
the third-party administrator, the third-party administrator shall
establish an annualized schedule for the repayment with monthly
repayment installments required by the energy remittance
repayment agreement, including the interest charged, administrative
cost fee, and loan loss reserve fee.
(b) The board shall collect the repayment installments that become
due and payable.
(c)
(b) (1) The period for repayment of the energy
remittance repayment agreement shall not exceed the effective useful
life of the improvements or 20 years, whichever is shorter.
(2) The calculated effective useful life of the
alternative source of electricity, and building energy
efficiency and renewable energy improvements , shall be
calculated using methodologies adopted by the commission, in
consultation with the Public Utilities Commission.
(A) The commission shall hold at least one public hearing on the
useful life of the improvement to take public and industry comments
on the commission's determinations.
(B) The commission shall update the useful life of improvements as
new information becomes available and when new technologies become
available and shall make this information publicly available on its
Internet Web site.
(C) The commission shall remove any improvements from its
information on improvements if the improvement is no longer available
or if the commission determines that manufacturer defects disqualify
the improvement from loan eligibility.
(d) Upon the failure of the participant to pay any installment
toward the repayment of the energy remittance repayment agreement
when the installment becomes due and owing pursuant to the schedule
for repayment, the board shall assess a penalty on the delinquent
payment of 10 percent of the unpaid installment.
(e) Within 60 days of a failure to pay the scheduled energy
remittance payment, the board shall issue a demand letter to the
participant with notice provided to the commission and provide the
participant with 30 days to cure the default.
(f) (1) If the participant fails to cure the default within the
time allotted, the board may declare the entire outstanding energy
remittance repayment agreement balance, including any interest due,
penalties assessed, and costs of collection incurred, immediately due
and owing and foreclose on the energy remittance repayment agreement
by either judicial or nonjudicial foreclosure.
(2) Revenue generated from the sale of the eligible building shall
be distributed to satisfy liens on the eligible building in
accordance with the priority of the liens as provided by law.
(g) Upon the full repayment of the balance of the energy
remittance repayment agreement, and interest and penalties that had
accrued, the board shall notify the commission of that repayment.
Within 30 days of the receipt of the notice, the board shall record
with the county in which the eligible building is located a release
of the energy remittance repayment agreement.
(c) The loan servicer shall collect the repayment installments
that become due and payable. Funds collected shall be remitted to the
commission. A repayment installment is delinquent upon the failure
of the participant to pay any installment due and payable pursuant to
the schedule for repayment. The loan servicer shall notify the board
of the delinquency.
(d) (1) The board shall collect the repayment installments that
are delinquent. Funds collected shall be remitted to the commission.
The collection provisions contained in the Fee Collection Procedures
Law (Chapter 4 (commencing with Section 55121) of Part 30 of Division
2 of the Revenue and Taxation Code), to the extent feasible or
practical, shall apply to the collection of the delinquent repayment
installments. For the purposes of chapter, reference in the Fee
Collection Procedures Law to "fee" shall include the repayment
installment imposed by this chapter and references to the "fee payer"
shall include a participant required to pay the repayment
installment imposed pursuant to this chapter. For the purposes of
collection, a delinquent repayment installment is a final liability
of the participant.
(2) The board shall assess liquidated damages on the delinquent
repayment installment of 10 percent of the unpaid installment. Within
60 days of a failure to pay the delinquent repayment installment,
the board shall issue a demand letter to the participant, with
written notice provided to the commission, and provide the
participant with 30 days from the date of the demand letter to cure
the delinquency before the board commences further action to collect
a delinquent repayment installment.
(3) The board may periodically consult with the commission on the
status of the energy remittance agreements with outstanding
delinquent repayment installments. If the board deems that available
remedies to collect the delinquent repayment installments on an
energy remittance repayment agreement have been exhausted, to the
extent feasible or practical, and the delinquency cannot be cured,
the board shall inform the commission in writing. At a business
meeting, the commission may declare the entire outstanding energy
remittance repayment agreement balance, including any interest due,
liquidated damages assessed, and costs of collection incurred,
immediately due and payable and direct the board to take action to
satisfy the energy remittance repayment agreement lien. The board may
contract with a foreclosure service provider to carry out the
foreclosure on behalf of the commission.
(4) Revenues generated from the sale of the eligible real property
shall be distributed to satisfy liens on the eligible buildings in
accordance with the priority of the liens as provided by law.
(5) The board shall perform the collection of delinquent repayment
installments and the foreclosure duties imposed by this chapter as a
ministerial function on behalf of the commission.
(6) The board may prescribe, adopt, and enforce guidelines
relating to the collection of the delinquent repayment installments.
The guidelines adopted pursuant to this section shall be exempt from
the Administrative Procedures Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code).
(e) Upon the full repayment of the balance of the energy
remittance repayment agreement lien, accrued interest, and liquidated
damages, the commission shall record with the county in which the
eligible real property is located a release of the energy remittance
repayment agreement lien.
25987.17. (a) A participant shall remit repayment installments
due by an electronic funds transfer to the board under procedures
prescribed by the board.
(b) Any participant remitting amounts due pursuant to subdivision
(a) shall perform electronic funds transfers in compliance with the
due dates prescribed in the schedule for repayment. Payment is deemed
complete on the date the electronic funds transfer is initiated if
settlement to the state's demand account occurs on or before the
banking day following the date the transfer is initiated. If
settlement to the state's demand account does not occur on or before
the banking day following the date the transfer is initiated, payment
is deemed to occur on the date settlement occurs.
(c) Any participant who remits a repayment installment by means
other than appropriate electronic funds transfer shall pay a penalty
of 10 percent of the repayment installment incorrectly remitted.
(d) The board may prescribe, adopt, and enforce guidelines
relating to the collection of the energy remittance repayment
installments. The guidelines adopted pursuant to this section shall
be exempt from the requirements of the Administrative Procedure Act
(Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code).
25987.18. (a) Prior to approving an application for inclusion
into a loan portfolio and the recordation of the energy remittance
repayment agreement, agreement lien, or
a modification of an approved application, the commission shall
conduct a public meeting on the proposed application or modification.
(b) The commission shall post a notice of the hearing on the
commission's Internet Web site and provide the notice, in writing, to
all lienholders of the eligible building no later than 30 days prior
to the public meeting.
(c) The notice shall specify all of the following:
(1) The name of the qualified applicant.
(2) The address of the eligible meeting.
real property.
(3) The amount required to be repaid secured by the
energy remittance repayment agreement lien proposed to be
recorded on against the eligible
building. real property.
(4) The date and place of the public meeting.
(5) The schedule for repayment of the contractual energy
remittance and associated costs as agreed upon between the qualified
applicant and the commission.
(6) The interest rate assessed pursuant to the energy remittance
repayment agreement.
(7) A detailed description of the proposed modification, if
applicable.
(d) The notice shall inform the lienholder that any complaints or
objections to either the approval of the application and the
recordation of the energy remittance repayment agreement lien
on the eligible building real property
or the modification of an approved application shall be
submitted, in writing, to the commission not less than 10 days prior
to the public meeting.
25987.19. In evaluating the eligibility of an applicant, the
commission shall consider the creditworthiness of the applicant and
the effectiveness of the improvements applying the following
criteria, which may include, but not be limited to, all of the
following:
(a) Whether applicants are legal owners of the underlying
real property.
(b) Whether applicants are current on any outstanding mortgage and
property tax payments.
(c) Whether applicants are in default or in bankruptcy
proceedings.
(d) Whether applicants have applied for incentives, if they are
available , through the energy efficiency programs offered
by an electrical or gas corporation or a publicly owned utility.
(e) Whether improvements financed by the program follow applicable
standards including any guidelines adopted by the commission.
25987.20. (a) The commission shall approve an application at a
business meeting. Upon approval of an application, the commission
shall authorize a recording of record
the energy remittance repayment agreement on the deed of
lien against the eligible building.
real property.
(b) The commission shall specify the amount required to be paid
to the board pursuant to the energy remittance
repayment agreement, agreement lien,
the schedule of repayment that details the monthly repay
ment installment amount and due date , and the interest
rate charged.
(c) The commission shall approve a modification of an approved
application at a business meeting.
25987.21. (a) The energy remittance repayment agreement
lien that is secured by a lien recorded pursuant to this
section, section shall have a prominent
header on the document that reads "Energy Remittance Repayment
Agreement Lien" in 14-point type and contains all of the following
information related to the affected real property:
(1) The assessor's parcel number.
(2) The owners of record.
(3) The legal description.
(4) The street address.
(b) Except as otherwise required by law, the energy remittance
repayment agreement shall be superior in priority to all subsequent
liens recorded on the deed of the eligible building except where the
first mortgage is refinanced, in which case the energy remittance
repayment agreement shall remain secondary to the primary mortgage.
(c) The sale of the eligible building to enforce the payment of
general ad valorem taxes shall not extinguish the energy remittance
repayment agreement recorded on the eligible building.
(d) In the event of foreclosure, the energy remittance repayment
agreement installments shall not be due and owing during such time
when the building is owned by a financial institution taking title by
way of foreclosure. The installments owing pursuant to the energy
remittance repayment agreement shall, however, continue to accrue and
shall become due 60 days after a new, nonfinancial owner takes
title.
(e) Notwithstanding any other law, in the event of a foreclosure
of the property, the energy remittance repayment agreement shall not
be extinguished, unless the outstanding balance of the energy
remittance repayment agreement, including the interest accrued and
all penalties and fees assessed prior to the foreclosure, is fully
paid through the foreclosure proceeding.
(5) The amount of the lien.
(b) The energy remittance agreement lien shall have the force,
effect, and priority of a judgment lien from the time of recording in
the county where the real property is located.
25987.22. (a) No later than 30 days after the approval of an
application, the commission or the third-party administrator
shall forward the agreement and any other information
necessary to collect the installment repayments to the board which
shall record with the county in which the eligible
building real property is located the energy
remittance repayment agreement on the deed of the eligible
building. lien. The board
third-party administrator shall notify the commission upon
the recordation of the energy remittance repayment
agreement. agreement lien.
(b) Within 60 days of the notice of recording of the energy
remittance repayment agreement, agreement
lien, the commission shall include the approved application in
a portfolio posted on the commission's Internet Web site.
25987.23. (a) The board commission
shall deposit into the Nonresidential Building
Real Property Energy Retrofit Debt Servicing Fund
established pursuant to Section 25987.38 , or the accounts
within the fund, any moneys collected pursuant to this chapter.
(b) The board may charge a program administration cost fee on the
owner of an eligible building to cover its costs as well as the
authority's and the commission's costs in implementing this chapter.
(c) Nothing in this
(b) This chapter shall not
be construed to require investor-owned utilities or municipal
utilities to serve in the role as a third-party private guarantor or
loan servicer or otherwise provide credit support for the loan
program.
25987.24. (a) A local government that has issued revenue bonds
pursuant to a program providing financial assistance to owners of
nonresidential buildings undertaking a renewable energy, water
efficiency, or energy efficiency retrofit improvement on the
buildings real properties may apply to the
commission for participation in the program.
(b) Upon the approval of an application submitted by the local
government, the authority may purchase all those outstanding revenue
bonds issued by the local government.
(c) Upon the purchase of the revenue bonds issued by the local
government by the authority, the authority succeeds to all rights
conferred upon the bondholder by those revenue bonds and the local
government shall remit revenue that is used to secure those revenue
bonds to the board commission .
25987.25. (a) To the extent that the commission determines
necessary to effectively complete the duties specified by this
chapter, the commission shall do all of the following:
(1) (A) Analyze and evaluate standards for nonresidential energy
building retrofits previously developed by various national and
international organizations to provide uniformity and transparency
for financial institutions evaluating loan proposals for energy
improvements to nonresidential buildings. To the extent that the
commission determines necessary, this evaluation shall be completed
not later than January 1, 2015. 2016.
(B) The evaluation shall review existing protocols or a
combination of elements of existing measurement protocols and shall
be made available in an electronic format to financial institutions
and local governments initiating loans pursuant to this chapter.
(2) Develop, in consultation with the Department of Real Estate
and representatives from the commercial real estate industry, a model
energy aligned lease provision that modifies, upon the agreement
between the owner and tenants of an eligible
building, real property, a commercial
lease agreement allowing the owners to recover the costs of the
renewable energy, water efficiency, or energy efficiency retrofit
improvements that result in operational savings based on the useful
life of the retrofit while protecting tenants from underperformance
of the building energy efficiency improvements.
(3) Develop a request for proposal to contract with one or more
financial institutions to secure a short-term, revolving credit
facility (warehouse line of credit) for the purpose of creating an
interim financing mechanism for the loans that would be aggregated
for the purposes of issuance of a revenue bond pursuant to Section
25987.29. The warehouse line of credit shall be drawn by the
third-party administrator for origination of direct loans to
qualified applicants.
(b) In implementing this chapter, the commission shall do all of
the following:
(1) Consult with the Public Utilities Commission, representatives
from the investor-owned and publicly owned utilities, local
governments, real estate licensees, commercial builders, commercial
property owners, small businesses, financial institutions, commercial
property appraisers, energy rating organizations, and other entities
the commission deems appropriate.
(2) Hold at least one public hearing.
(3) Adopt guidelines and standards for the purposes of
implementing this chapter at a publicly noticed meeting offering all
interested parties an opportunity to comment. For the initial
adoption of the guidelines and standards, the commission shall
provide a written public notice at least 30 days prior to the
meeting. For the adoption of any substantive change to the guidelines
and standards, the commission shall provide a written public notice
at least 10 days prior to the meeting. Notwithstanding any other law,
guidelines or standards adopted pursuant to this section shall be
exempt from the requirements of Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code.
In implementing the requirements of this chapter, in the
interest of promoting consistency across the demand-side management
programs statewide, the commission shall seek to harmonize these
requirements, to the greatest extent practicable, with the
rules and requirements of the Public Utilities Commission for its
nonresidential energy efficiency, distributed generation, demand
response, and other demand-side management programs.
(4) Establish loan limits for each type of eligible improvements
for commercial or public buildings.
(5) Establish standard metrics for estimating performance of
eligible improvements for different building types and
different profits of energy consumption to be used in
underwriting loans made pursuant to the program.
(6) Establish standard assumptions to be used for estimating the
energy benefits of improvements that shall include a reasonable
assumption for the cost of kilowatthours and therms and a reasonable
assumption of future expectations of the rate these costs will
increase.
(7) Establish those standards, guidelines, and procedures, through
regulation, including, but not limited to, standards of
creditworthiness for qualification of program applicants, that are
necessary to ensure the financial stability of the program and
otherwise prevent fraud and abuse.
(8) Establish those measurement and verification standards
necessary to ensure that the building energy efficiency improvements
financed pursuant to this chapter are realized at a level specified
by the commission.
(9) Consider reliance on existing trade certifications or
licensing requirements applicable to occupations that perform the
work contemplated under this chapter.
(10) Establish qualifications for the certification of contractors
to construct or install building energy efficiency improvements.
(11) Contract with a party, public or private, to do any of the
following:
(A) Ensure that appropriate and reasonable steps are taken to
monitor and verify the quality and longevity of building energy
efficiency improvements financed pursuant to this division
program and measure the total energy savings
achieved by the program.
(B) Determine the average amount, in aggregate, paid to
contractors and financial institutions pursuant to
median, average, and aggregate amount financed by an applicant for
eligible improvements to different building types under the
program. Make data on program participation publicly available in a
timely manner and in an aggregate format that would not provide
identifying information about individual customers of the electrical
and gas corporations and include, at a minimum, the types of energy
efficiency measures installed, the location of each customer
receiving ratepayer-funded energy efficiency assistance, the amount
of funds expended at each site, the expected annual energy savings
and reduced energy usage expected in kilowatthours or therms. Unless
the affected person, customer, or entity consents, the information,
data, and reports required to be provided pursuant to this section
shall not include any of the following:
(i) Personal information as defined in subdivision (e) of Section
1798.80 of the Civil Code.
(ii) A customer's electrical or gas consumption data as defined in
subdivision (a) of Section 8380.
(iii) Other information excluded from public disclosure pursuant
to the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code).
(12) Adopt a standard notice and disclosure form for the purposes
of Section 25987.27.
25987.26. Credit issued under the warehouse line of credit shall
not be deemed to constitute a debt or liability of the state or of
any political subdivision thereof, or a pledge of the full faith and
credit of the state or of any political subdivision, but shall be
payable solely from the funds provided therefor. All credit
instruments shall contain a statement to the following effect:
"Neither the faith and credit nor the taxing power of the State of
California is pledged to the payment of principal and interest on
this credit instrument."
25987.27. (a) From the date upon which financial assistance is
approved by the commission pursuant to Section 25987.20 and for all
subsequent transactions entered into pursuant to this chapter, a
seller of real property subject to an energy remittance repayment
agreement shall deliver to the buyer an energy remittance repayment
agreement notice and disclosure as adopted by the commission pursuant
to paragraph (9) (12) of subdivision
(a) (b) of Section 25987.25.
(b) (1) Upon the delivery of the completed notice and disclosure
form to the buyer of real property, the seller and his or her agent
is not required to provide additional information relative to the
energy remittance repayment agreement.
(2) The information in the notice and disclosure form is deemed
sufficient to provide notice to the buyer of the existence of the
energy improvements, improvements and of
the energy remittance repayment agreement, and the
repayment obligation that will be assigned to, and assumed by, the
buyer upon taking title agreement lien .
(3) The commission or the third-party administrator shall report
periodically, but no less often than once annually, on the number and
amount of loans that are made available in areas of the state where
climate conditions are more extreme and in disadvantaged communities.
25987.28. No later than June 30, 2015,
2016, and no later than June 30 of every fifth year thereafter,
the California State Auditor shall conduct, or cause to
be conducted, a performance audit of the program. The
Notwithstanding Section 10231.5 of the Government
Code, the California State Auditor shall prepare a
report and recommendations on each audit conducted and present the
report and recommendations to the President pro Tempore of the Senate
and the Speaker of the Assembly.
Article 3. Nonresidential Building
Real Property Energy Retrofit Bond
25987.29. The authority, on behalf of the commission, may incur
indebtedness and issue and renew negotiable bonds, notes, debentures,
or other securities of any kind or class. All indebtedness, however
evidenced, shall be payable solely from moneys received pursuant to
this chapter and the proceeds of its negotiable bonds, notes,
debentures, or other securities and shall not exceed the sum of two
billion dollars ($2,000,000,000).
25987.30. The Legislature may, by
statute, authorize the authority to issue bonds , as defined
in Section 25987.31 in excess of the amount provided in
Section 25987.29.
25987.31. (a) On a semiannual basis, the authority shall conduct
a meeting for the purpose of to adopt a
resolution authorizing the issuance of , by the
adoption of a resolution, negotiable bonds, notes,
debentures, or other securities (collectively called "bonds") for the
purposes of generating sufficient moneys to fund the approved
applications in the portfolio at the time of the meeting or to repay
an outstanding balance of the participant on whose behalf the
commission has provided funds through the warehouse line of credit.
In anticipation of the sale of bonds as authorized by Section
25987.29, or as may be authorized pursuant to Section 25987.30, the
authority, on behalf of the commission, may issue negotiable bond
anticipation notes and may renew the notes from time to time. The
bond anticipation notes may be paid from the proceeds of sale of the
bonds of the authority in anticipation of which they were issued.
Notes and agreements relating to the notes and bond anticipation
notes (collectively called "notes") and the resolution or resolutions
authorizing the notes may contain any provisions, conditions, or
limitations that a bond, agreement relating to the bond, and bond
resolution of the authority may contain. However, a note or renewal
of the note shall mature at a time not exceeding two years from the
date of issue of the original note.
(b) Every issue of its bonds, notes, or other obligations shall be
general obligations of the authority payable from revenues or moneys
received pursuant to this chapter. Notwithstanding that the bonds,
notes, or other obligations may be payable from a special fund, they
are for all purposes negotiable instruments, subject only to the
provisions of the bonds, notes, or other obligations for
registration.
(c) Subject to the limitations in Sections 25987.29 and 25987.30,
the bonds may be issued as serial bonds or as term bonds, or the
authority, in its discretion, may issue bonds of both types. The
bonds shall be authorized by resolution of the authority and shall
bear the date or dates, mature at the time or times, not exceeding 30
years from their respective dates, bear interest at the rate or
rates, be payable at the time or times, be in the denominations, be
in the form, either coupon or registered, carry the registration
privileges, be executed in a manner, be payable in lawful money of
the United States of America at a place or places, and be subject to
terms of redemption, as the resolution or resolutions may provide.
The sales may be a public or private sale, and for the price or
prices and on the terms and conditions, as the authority shall
determine after giving due consideration to the recommendations of
any participating party to be assisted from the proceeds of the bonds
or notes. Pending preparation of the definitive bonds, the authority
may issue interim receipts, certificates, or temporary bonds that
shall be exchanged for the definitive bonds. The authority may sell
bonds, notes, or other evidence of indebtedness at a price below
their par value. However, the discount on a security sold pursuant to
this section shall not exceed 6 percent of the par value.
(d) A resolution or resolutions authorizing bonds or an issue of
bonds may contain provisions that shall be a part of the contract
with the holders of the bonds to be authorized, as to all of the
following:
(1) Pledging the moneys collected pursuant to this chapter from
the portfolio of approved applications that are funded by the bonds,
to secure the payment of the bonds or of any particular issue of
bonds, subject to the agreements with bondholders as may then exist.
(2) The setting aside of reserves or sinking funds, and the
regulation and disposition of the reserves or sinking funds.
(3) Limitations on the right of the authority or the commission or
their agent to restrict and regulate the use of the project or
projects to be financed out of the proceeds of the bonds or any
particular issue of bonds.
(4) Limitations on the purpose to which the proceeds of sale of an
issue of bonds then or thereafter to be issued may be applied and
pledging those proceeds to secure the payment of the bonds or the
issue of the bonds.
(5) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.
(6) The procedure, if any, by which the terms of a contract with
bondholders may be amended or abrogated, the amount of bonds the
holders of which must consent to the amendment or abrogation, and the
manner in which that consent may be given.
(7) Limitations on expenditures for operating, administrative, or
other expenses of the authority or commission.
(8) Defining the acts or omissions to act that constitute a
default in the duties of the authority or commission to holders of
its obligations and providing the rights and remedies of the holders
in the event of a default.
(e) The authority, the commission, and any person executing the
bonds or notes shall not be liable personally on the bonds or notes
or be subject to personal liability or accountability by reason of
the issuance of the bond or note.
(f) The authority shall have power out of any funds available for
these purposes to purchase its bonds or notes. The authority may
hold, pledge, cancel, or resell those bonds, subject to and in
accordance with agreements with bondholders.
(g) The commission, the authority, and the board may enter into a
memorandum of understanding providing for the transfer of energy
remittance payments between the three agencies in furtherance of this
chapter.
(h) Should there be If there is
insufficient project valuation or insufficient demand for the
revenue bonds authorized by this chapter, the board
loan servicer shall continue to collect the
energy remittance installment payments that become
due and payable and service the loans , and the board
shall continue to collect delinquent repayment installments .
Failure to sell the revenue bonds shall not create any liability for
the state.
25987.32. In the discretion of the authority, any bonds issued
under the provisions of this article may be secured by a trust
agreement by and between the authority and a corporate trustee or
trustees, which may be the authority or any trust company or bank
having the powers of a trust company within or without the state.
Such The trust agreement or the
resolution providing for the issuance of such
the bonds may pledge or assign the revenues to be received
pursuant to this chapter, to be financed out of the proceeds of
such the bonds. Such
The trust agreement or resolution providing for the
issuance of such the bonds may contain
such provisions for protecting and enforcing the
rights and remedies of the bondholders as may be reasonable and
proper and not in violation of law, including particularly
such provisions as have herein above been
specifically authorized by this chapter to be
included in any resolution or resolutions of the commission
authorizing bonds thereof . Any bank or trust
company doing business under the laws of this state which may act as
depositary of the proceeds of bonds or of revenues or other moneys
may furnish such indemnifying bonds or pledge
such securities as may be required by the
authority. Any such trust agreement may set forth
the rights and remedies of the bondholders and of the trustee or
trustees, and may restrict the individual right of action by
bondholders. In addition to the foregoing, any such
trust agreement or resolution may contain such
other provisions as the authority may deem reasonable and
proper for the security of the bondholders. Notwithstanding any other
law, the authority shall not be deemed to have a conflict of
interest by reason of acting as trustee pursuant to this chapter.
25987.33. Bonds issued under the provisions of this article shall
not be deemed to constitute a debt or liability of the state or of
any political subdivision thereof, other than the authority, or a
pledge of the faith and credit of the state or of any such
political subdivision, but shall be payable solely from the
funds herein provided therefor provided by
this chapter . All such bonds shall contain
on the face thereof a statement to the following effect: "Neither the
faith and credit nor the taxing power of the State of California is
pledged to the payment of the principal of or interest on this bond."
The issuance of bonds under the provisions of this article shall not
directly or indirectly or contingently obligate the state or any
political subdivision thereof to levy or to pledge any form of
taxation whatever therefor or to make any
appropriation for their payment. Nothing contained in this section
shall prevent or be construed to prevent the authority from pledging
its full faith and credit to the payment of bonds or issue of bonds
authorized pursuant to this chapter.
25987.34. (a) The authority is hereby authorized to provide for
the issuance of bonds of the authority for the purpose of refunding
any bonds, notes, or other securities of the authority then
outstanding, including the payment of any redemption premium
thereon and any interest accrued or to accrue to the
earliest or subsequent date of redemption, purchase, or maturity of
such the bonds.
(b) The proceeds of any such bonds issued for
the purpose of refunding outstanding bonds, notes, or other
securities may, in the discretion of the authority, be applied to the
purchase or retirement at maturity or redemption of such
outstanding bonds either on their earliest or any
subsequent redemption date or upon the purchase or retirement at the
maturity thereof and may, pending such
application, be placed in escrow to be applied to such
purchase or retirement at maturity or redemption on
such a date as may be determined by the
authority.
(c) Pending such use, any such
escrowed proceeds may be invested and reinvested by the
authority in obligations of, or guaranteed by, the United States of
America, or in certificates of deposit or time deposits secured by
obligations of, or guaranteed by, the United States of America,
maturing at such the time or times as
shall be appropriate to ensure the prompt payment, as to principal,
interest, and redemption premium, if any, of the outstanding bonds to
be so refunded. The interest, income, and profits, if any, earned or
realized on any such investment may also be
applied to the payment of the outstanding bonds to be so refunded.
After the terms of the escrow have been fully satisfied and carried
out, any balance of such proceeds and interest,
income, and profits, if any, earned or realized on the investments
thereof may be returned to the authority for use
by it in any lawful manner.
(d) All such These bonds
shall be subject to the provisions of this division in the same
manner and to the same extent as other bonds issued pursuant to this
chapter.
25987.35. Bonds issued by the authority are legal investments for
all trust funds, the funds of all insurance companies, banks, both
commercial and savings, trust companies, savings and loan
associations, and investment companies, for executors,
administrators, trustees, and other fiduciaries, for state school
funds, and for any funds which may be invested in county, municipal,
or school district bonds, and such the
bonds are securities which may properly and legally be deposited
with, and received by, any state or municipal officer or agency or
political subdivision of the state for any purpose for which the
deposit of bonds or obligations of the state, is now, or may
hereafter be, authorized by law, including deposits to secure public
funds if, and only to the extent that, evidence of indebtedness or
debt securities of the participating party receiving financing
through the issuance of such bonds qualify or are
eligible for such those purposes and
uses.
25987.36. The state hereby pledges and agrees with the holders of
the bonds and with a participant with an approved application that
the state will not limit, alter, restrict, or impair the rights
vested in the authority or the commission or the rights or
obligations of a person or entity with which the commission contracts
to fulfill the terms of an agreement made pursuant to this chapter.
The state further agrees that it will not in any way impair the
rights or remedies of the holder of the bonds until the bonds have
been paid or until adequate provision for payment has been made. The
authority may include this provision and undertaking for the
authority in its bonds.
25987.37. (a) Bonds issued pursuant to this division shall be
exempt from all taxation and assessment imposed pursuant to state
law.
(b) No later than February 1, 2014, 2015,
the commission shall apply to the United States Department of
the Treasury under the Energy Tax Incentives Act of 2005 (Title XIII
of Public Law 109-58) for the authority to issue tax advantage bonds
under the federal Clean Renewable Energy Bonds program or any other
applicable programs.
Article 4. Nonresidential Building
Real Property Energy Retrofit Debt Servicing Fund
25987.38. (a) The Nonresidential Building
Real Property Energy Retrofit Debt Servicing Fund is hereby
established in the State Treasury. Notwithstanding Section 13340 of
the Government Code, the moneys in the fund are hereby continuously
appropriated to the authority without regard to fiscal year
years for the purposes of paying the principal
and interest on bonds issued by the authority pursuant to Section
25987.29, servicing the warehouse line of credit, and defraying any
direct and indirect costs incurred by the Treasurer in executing
duties required by this chapter.
(b) All interest and income derived from the deposit and
investment of moneys in the fund shall be credited to the fund, and
all unexpended and unencumbered moneys in the fund at the end of any
fiscal year shall remain in the fund.
25987.39. The Loan Loss Reserve Account is hereby established in
the Nonresidential Building Real Property
Energy Retrofit Debt Servicing Fund. The board
commission shall deposit the portion of the
contractual energy remittance repayment
installation that is the loan loss reserve fee into the
account. Notwithstanding Section 13340 of the Government Code, the
moneys in the account are hereby continuously appropriated to the
authority without regard to fiscal year years
for the purposes of paying outstanding balances due under an
energy remittance repayment agreement on a building that has been
foreclosed upon if the proceeds generated from the foreclosure
proceedings are insufficient to pay any past due payments
past due under the energy remittance repayment agreement,
including accrued interest, penalties,
liquidated damages, and fees. All interest and income derived
from the deposit and investment of moneys in the account shall be
credited to the account, and all unexpended and unencumbered moneys
in the account at the end of any fiscal year shall remain in the
account.
25987.40. The Administration Account is hereby established in the
Nonresidential Building Real Property
Energy Retrofit Debt Servicing Fund. The authority
commission shall deposit into the account the program
administration fee collected pursuant to subdivision (b) of
Section 25987.23 and penalties collected pursuant to Section 25987.16
and liquidated damages collected pursuant to this
chapter . Notwithstanding Section 13340 of the Government Code,
moneys in the account shall be continuously appropriated
without regard to fiscal years to the authority, the
commission, and the board for the costs of implementing this
chapter.
25987.41. (a) The Director of Finance shall transfer, as a loan,
up to one million dollars ($1,000,000) from the General Fund to the
board to implement this chapter.
(b) The Director of Finance shall transfer, as a loan, up to seven
million dollars ($7,000,000) from the General Fund to the commission
to implement this chapter.
(c) Any loan made pursuant to this section shall be repaid on or
before January 1, 2024, with interest at the pooled money investment
rate, from energy remittance repayment collected pursuant to this
chapter.
(d) If the fees authorized for collection pursuant to subdivision
(b) of Section 25987.23 are not sufficient to support the loans made
pursuant to this section, the Director of Finance shall discuss
alternative repayment terms with the borrowing agencies.
25987.42. (a) The commission, the board, and the authority shall
be authorized to promulgate necessary regulations to implement and
administer this chapter.
(b) Guidelines for the purposes of implementing this chapter shall
be adopted by the commission, board, or authority at a publicly
noticed meeting offering all interested parties an opportunity to
comment. For the initial adoption of the guidelines and standards,
the commission, board, or authority shall provide a written public
notice at least 30 days prior to the meeting. For the adoption of any
substantive change to the guidelines and standards, the commission,
board, or authority shall provide a written public notice at least 10
days prior to the meeting. Notwithstanding any other law, guidelines
or standards adopted pursuant to this section shall be exempt from
the requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
