Bill Text: CA SB1128 | 2011-2012 | Regular Session | Chaptered
Bill Title: Energy: alternative energy financing.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2012-09-27 - Chaptered by Secretary of State. Chapter 677, Statutes of 2012. [SB1128 Detail]
Download: California-2011-SB1128-Chaptered.html
BILL NUMBER: SB 1128 CHAPTERED
BILL TEXT
CHAPTER 677
FILED WITH SECRETARY OF STATE SEPTEMBER 27, 2012
APPROVED BY GOVERNOR SEPTEMBER 27, 2012
PASSED THE SENATE AUGUST 29, 2012
PASSED THE ASSEMBLY AUGUST 28, 2012
AMENDED IN ASSEMBLY AUGUST 24, 2012
AMENDED IN ASSEMBLY AUGUST 20, 2012
AMENDED IN ASSEMBLY AUGUST 7, 2012
AMENDED IN ASSEMBLY JUNE 18, 2012
AMENDED IN SENATE MAY 29, 2012
AMENDED IN SENATE MAY 1, 2012
AMENDED IN SENATE APRIL 16, 2012
AMENDED IN SENATE APRIL 9, 2012
INTRODUCED BY Senator Padilla
(Coauthor: Senator Rubio)
FEBRUARY 21, 2012
An act to amend Sections 26001, 26002, 26008, 26009, 26011, 26014,
26015, 26017, 26022, 26023, 26024, 26025, 26030, 26033, 26034, and
26035 of, to amend, repeal, and add Sections 26003 and 26011.8 of, to
add Chapter 4 (commencing with Section 26050) to Division 16 of, to
repeal Sections 26001.5, 26011.5, 26011.6, 26012, 26013, 26016,
26016.5, 26020, 26021, 26026, 26027, and 26081 of, and to repeal
Division 16.2 (commencing with Section 26100) of, the Public
Resources Code, and to amend, repeal, and add Section 6010.8 of the
Revenue and Taxation Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1128, Padilla. Energy: alternative energy financing.
Existing law establishes the California Alternative Energy and
Advanced Transportation Financing Authority and requires the
authority to establish programs to provide financial assistance to
participating parties for projects related to alternative energy
sources and advanced transportation projects. Existing law authorizes
the authority to issue revenue bonds or other securities of up to $1
billion in total outstanding debt as a financing mechanism for
providing financial assistance to those projects.
This bill would revise and recast those provisions to, among other
things, require the authority to establish programs providing
financial assistance to projects for renewable energy generation
facilities, combined heat and power systems, facilities designed for
the production of renewable fuels, distributed generation and energy
storage technologies eligible under the self-generation incentive
program as determined by the Public Utilities Commission, and energy
efficiency devices and technologies. The bill would eliminate the $1
billion limitation on the amount of outstanding indebtedness the
authority may incur to provide the financial assistance.
Existing law authorizes the authority, until January 1, 2021, to
provide financial assistance in the form of a sales and use tax
exclusion for a project to promote California-based manufacturing,
California-based jobs, the reduction of greenhouse gases, or the
reduction in air and water pollution or energy consumption. Existing
law requires the authority, once the sales and use tax exemptions for
projects exceed $100,000,000 for a given year, to provide the
Legislature with a 20-day notice prior to granting additional sales
and use tax exemptions. The sales and use tax exemption applies to
the transfer of title of tangible personal property constituting a
project to the authority by a participating party, or a lease or
transfer of title of tangible personal property constituting a
project by the authority to a participating party.
This bill would additionally authorize the authority, until July
1, 2016, to grant the above financial assistance to projects that
promote the utilization of advanced manufacturing, as defined. The
bill would require the authority, until July 1, 2016, to study the
efficacy and cost benefit of the sales and use tax exemption for
advanced manufacturing projects. The bill would require the
authority, before January 1, 2017, to submit to the Legislature a
report on the study. The bill would require the authority, before
January 1, 2015, to submit to the Legislature an interim report on
the efficacy of granting the sales and use tax exemption for
projects, and recommendations on changes that would increase the
efficacy in creating jobs and whether the exemption should be
expanded or narrowed. The bill would require the Governor's Office of
Business and Economic Development to consult with the Legislative
Analyst's Office, among others, to review and identify efficient and
cost-effective methods for the state to create jobs in advanced
manufacturing. The bill would require the Governor's Office of
Business and Economic Development to report its findings to the
Legislature by January 1, 2017. The bill would require the authority,
until January 1, 2021, to work with the University of California or
the California State University to perform a peer review of the net
benefits test, as described, used to evaluate applicants applying for
the sales and use tax exemption, as specified. The bill would
instead prohibit the authority from granting, on an annual basis, a
sales and use tax exemption for a project exceeding $100,000,000. The
bill would, instead, apply the sales and use tax exemption to the
lease or transfer of title of tangible property constituting a
project to any participating party.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Governor's Office of Business and Economic
Development, established pursuant to Section 12096.2 of the
Government Code, shall review and identify efficient and
cost-effective methods for the state to create jobs in advanced
manufacturing. In undertaking this review, the office shall consult
with the Legislative Analyst's Office and engage other government and
private sector stakeholders who have expertise in manufacturing,
workforce development, education, and economic development. The
Governor's Office of Business and Economic Development shall report
its findings to the Legislature on or before January 1, 2017.
(b) A report submitted pursuant to subdivision (a) shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 2. Section 26001 of the Public Resources Code is amended to
read:
26001. The Legislature hereby finds and declares both of the
following:
(a) It is essential that the state, in cooperation with the
federal government, use all practical and commercially feasible means
to promote the prompt and efficient development of energy sources
which are renewable or which more efficiently utilize and conserve
scarce energy resources.
(b) The promotion of sustainable and renewable energy sources,
implementation of measures that increase the efficiency of the use of
energy, and advanced transportation technologies that reduce the
degradation of the environment and lessen the state's dependence of
fossil fuels, and protect the health, welfare, and safety of the
people of this state are in the public interest and serve a public
purpose.
SEC. 3. Section 26001.5 of the Public Resources Code is repealed.
SEC. 4. Section 26002 of the Public Resources Code is amended to
read:
26002. It is the purpose of this division to advance the state's
goals of reducing the levels of greenhouse gas emissions, increasing
the deployment of sustainable and renewable energy sources,
implementing measures that increase the efficiency of the use of
energy, creating high quality employment opportunities, and lessening
the state's dependence on fossil fuels and to that end to provide an
alternative method of financing in providing and promoting the
establishment of both of the following:
(a) Facilities utilizing alternative methods and sources of
energy.
(b) Facilities needed for the development and commercialization of
advanced transportation technologies.
SEC. 5. Section 26003 of the Public Resources Code is amended to
read:
26003. (a) As used in this division, unless the context otherwise
requires:
(1) (A) "Advanced manufacturing" means manufacturing processes
that improve existing, or create entirely new materials, products,
and processes through the use of science, engineering, or information
technologies, high-precision tools and methods, a high-performance
workforce, and innovative business or organizational models utilizing
any of the following technology areas:
(i) Micro- and nanoelectronics, including semiconductors.
(ii) Advanced materials.
(iii) Integrated computational materials engineering.
(iv) Nanotechnology.
(v) Additive manufacturing.
(vi) Industrial biotechnology.
(B) "Advanced manufacturing" includes all of the following:
(i) Systems that result from substantive advancement, whether
incremental or breakthrough, beyond the current industry standard, in
the production of materials and products. These advancements include
improvements in manufacturing processes and systems that are often
referred to as "smart" or "intelligent" manufacturing systems, which
integrate computational predictability and operational efficiency.
(ii) (I) Sustainable manufacturing systems and manufacturing
technologies that minimize the use of resources while maintaining or
improving cost and performance.
(II) Sustainable manufacturing systems and manufacturing
technologies do not include those required to be undertaken pursuant
to state or federal law or regulations, air district rules or
regulations, memoranda of understanding with a governmental entity,
or legally binding agreements or documents. The State Air Resources
Board shall advise the authority to ensure that the requirements of
this clause are met.
(2) (A) "Advanced transportation technologies" means emerging
commercially competitive transportation-related technologies
identified by the authority as capable of creating long-term, high
value-added jobs for Californians while enhancing the state's
commitment to energy conservation, pollution and greenhouse gas
emissions reduction, and transportation efficiency.
(B) "Advanced transportation technologies" does not include those
projects required to be undertaken pursuant to state or federal law
or regulations, air district rules or regulations, memoranda of
understanding with a governmental entity, or legally binding
agreements or documents. The State Air Resources Board shall advise
the authority regarding projects that are excluded pursuant to this
subparagraph.
(3) (A) "Alternative sources" means devices or technologies used
for a renewable electrical generation facility, as defined in
paragraph (1) of subdivision (a) of Section 25741, a combined heat
and power system, as defined in Section 2840.2 of the Public
Utilities Code, distributed generation and energy storage
technologies eligible under the self-generation incentive program
pursuant to Section 379.6 of the Public Utilities Code, as determined
by the Public Utilities Commission, or a facility designed for the
production of renewable fuels, the efficient use of which reduce the
use of fossil or nuclear fuels, and energy efficiency devices or
technologies that reduce the need for new electric generation and
reduce emissions of toxic and criteria pollutants and greenhouse
gases.
(B) "Alternative sources" does not include a hydroelectric
facility that does not meet state laws pertaining to the control,
appropriation, use, and distribution of water, including, but not
limited to, the obtaining of applicable licenses and permits.
(4) "Authority" means the California Alternative Energy and
Advanced Transportation Financing Authority established pursuant to
Section 26004, and any board, commission, department, or officer
succeeding to the functions of the authority, or to which the powers
conferred upon the authority by this division shall be given.
(5) "Cost" as applied to a project or portion of the project
financed under this division means all or part of the cost of
construction and acquisition of all lands, structures, real or
personal property or an interest in the real or personal property,
rights, rights-of-way, franchises, easements, and interests acquired
or used for a project; the cost of demolishing or removing any
buildings or structures on land so acquired, including the cost of
acquiring any lands to which those buildings or structures may be
moved; the cost of all machinery, equipment, and furnishings,
financing charges, interest prior to, during, and for a period after,
completion of construction as determined by the authority;
provisions for working capital; reserves for principal and interest
and for extensions, enlargements, additions, replacements,
renovations, and improvements; the cost of architectural,
engineering, financial, accounting, auditing and legal services,
plans, specifications, estimates, administrative expenses, and other
expenses necessary or incident to determining the feasibility of
constructing any project or incident to the construction,
acquisition, or financing of a project.
(6) "Financial assistance" includes, but is not limited to, loans,
loan loss reserves, interest rate reductions, proceeds of bonds
issued by the authority, bond insurance, loan guarantees or other
credit enhancements or liquidity facilities, contributions of money,
or a combination thereof, as determined by, and approved by the
resolution of, the board.
(7) (A) "Participating party" means a person, federal or state
agency, department, board, authority, or commission, state or
community college, or university, or a city or county, regional
agency, public district, school district, or other political entity
engaged in the business or operations in the state, whether organized
for profit or not for profit, that applies for financial assistance
from the authority for the purpose of implementing a project.
(B) For the purposes of Section 6010.8 of the Revenue and Taxation
Code, "participating party" means an entity specified in
subparagraph (A) that seeks financial assistance pursuant to Section
26011.8.
(8) (A) "Project" means a land, building, improvement to the land
or building, rehabilitation, work, property, or structure, real or
personal, stationary or mobile, including, but not limited to,
machinery and equipment, whether or not in existence or under
construction, that utilizes, or is designed to utilize, an
alternative source, or that is utilized for the design, technology
transfer, manufacture, production, assembly, distribution, or service
of advanced transportation technologies or alternative source
components.
(B) "Project," for the purposes of Section 26011.8 and Section
6010.8 of the Revenue and Taxation Code, means any tangible personal
property that is utilized for the design, manufacture, production, or
assembly of advanced manufacturing, advanced transportation
technologies, or alternative source products, components, or systems.
(9) "Revenue" means all rents, receipts, purchase payments, loan
repayments, and all other income or receipts derived by the authority
from a project, or the sale, lease, or other disposition of
alternative source or advanced transportation technology facilities,
or the making of loans to finance alternative source or advanced
transportation technology facilities, and any income or revenue
derived from the investment of money in any fund or account of the
authority.
(b) This section shall become inoperative on July 1, 2016, and, as
of January 1, 2017, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2017, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 6. Section 26003 is added to the Public Resources Code, to
read:
26003. (a) As used in this division, unless the context otherwise
requires:
(1) (A) "Advanced transportation technologies" means emerging
commercially competitive transportation-related technologies
identified by the authority as capable of creating long-term, high
value-added jobs for Californians while enhancing the state's
commitment to energy conservation, pollution and greenhouse gas
emissions reduction, and transportation efficiency.
(B) "Advanced transportation technologies" does not include those
projects required to be undertaken pursuant to state or federal law
or regulations, air district rules or regulations, memoranda of
understanding with a governmental entity, or legally binding
agreements or documents. The State Air Resources Board shall advise
the authority regarding projects that are excluded pursuant to this
subparagraph.
(2) (A) "Alternative sources" means devices or technologies used
for a renewable electrical generation facility, as defined in
paragraph (1) of subdivision (a) of Section 25741, a combined heat
and power system, as defined in Section 2840.2 of the Public
Utilities Code, distributed generation and energy storage
technologies eligible under the self-generation incentive program
pursuant to Section 379.6 of the Public Utilities Code, as determined
by the Public Utilities Commission, or a facility designed for the
production of renewable fuels, the efficient use of which reduce the
use of fossil or nuclear fuels, and energy efficiency devices or
technologies that reduce the need for new electric generation and
reduce emissions of toxic and criteria pollutants and greenhouse
gases.
(B) "Alternative sources" does not include a hydroelectric
facility that does not meet state laws pertaining to the control,
appropriation, use, and distribution of water, including, but not
limited to, the obtaining of applicable licenses and permits.
(3) "Authority" means the California Alternative Energy and
Advanced Transportation Financing Authority established pursuant to
Section 26004, and any board, commission, department, or officer
succeeding to the functions of the authority, or to which the powers
conferred upon the authority by this division shall be given.
(4) "Cost" as applied to a project or portion of the project
financed under this division means all or part of the cost of
construction and acquisition of all lands, structures, real or
personal property or an interest in the real or personal property,
rights, rights-of-way, franchises, easements, and interests acquired
or used for a project; the cost of demolishing or removing any
buildings or structures on land so acquired, including the cost of
acquiring any lands to which those buildings or structures may be
moved; the cost of all machinery, equipment, and furnishings,
financing charges, interest prior to, during, and for a period after,
completion of construction as determined by the authority;
provisions for working capital; reserves for principal and interest
and for extensions, enlargements, additions, replacements,
renovations, and improvements; the cost of architectural,
engineering, financial, accounting, auditing and legal services,
plans, specifications, estimates, administrative expenses, and other
expenses necessary or incident to determining the feasibility of
constructing any project or incident to the construction,
acquisition, or financing of a project.
(5) "Financial assistance" includes, but is not limited to, loans,
loan loss reserves, interest rate reductions, proceeds of bonds
issued by the authority, bond insurance, loan guarantees or other
credit enhancements or liquidity facilities, contributions of money,
or a combination thereof, as determined by, and approved by the
resolution of, the board.
(6) (A) "Participating party" means a person, federal or state
agency, department, board, authority, or commission, state or
community college, or university, or a city or county, regional
agency, public district, school district, or other political entity
engaged in the business or operations in the state, whether organized
for profit or not for profit, that applies for financial assistance
from the authority for the purpose of implementing a project.
(B) For the purposes of Section 6010.8 of the Revenue and Taxation
Code, "participating party" means an entity specified in
subparagraph (A) that seeks financial assistance pursuant to Section
26011.8.
(7) (A) "Project" means a land, building, improvement to the land
or building, rehabilitation, work, property, or structure, real or
personal, stationary or mobile, including, but not limited to,
machinery and equipment, whether or not in existence or under
construction, that utilizes, or is designed to utilize, an
alternative source, or that is utilized for the design, technology
transfer, manufacture, production, assembly, distribution, or service
of advanced transportation technologies or alternative source
components.
(B) "Project," for the purposes of Section 26011.8 and Section
6010.8 of the Revenue and Taxation Code, means any tangible personal
property that is utilized for the design, manufacture, production, or
assembly of advanced transportation technologies or alternative
source products, components, or systems.
(8) "Revenue" means all rents, receipts, purchase payments, loan
repayments, and all other income or receipts derived by the authority
from a project, or the sale, lease, or other disposition of
alternative source or advanced transportation technology facilities,
or the making of loans to finance alternative source or advanced
transportation technology facilities, and any income or revenue
derived from the investment of money in any fund or account of the
authority.
(b) This section shall become operative on July 1, 2016.
SEC. 7. Section 26008 of the Public Resources Code is amended to
read:
26008. The authority may employ an executive director and any
other persons as are necessary to enable it properly to perform the
duties imposed upon it by this division. The executive director shall
serve at the pleasure of the authority and shall receive such
compensation as shall be fixed by the authority. The authority may,
by resolution, delegate to its executive director, or any other
employee of the authority, or the Treasurer's designee any powers and
duties that it may deem proper, including, but not limited to, the
power to enter into contracts on behalf of the authority.
SEC. 8. Section 26009 of the Public Resources Code is amended to
read:
26009. The authority may adopt, amend, or repeal all rules and
regulations necessary to carry out this division as emergency
regulations in accordance with the rulemaking provisions 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).
The adoption, amendment, or repeal of the regulations is conclusively
presumed to be necessary for the immediate preservation of the
public peace, health, safety, or general welfare within the meaning
of Section 11346.1 of the Government Code.
SEC. 9. Section 26011 of the Public Resources Code is amended to
read:
26011. The authority is authorized and empowered:
(a) To adopt an official seal.
(b) To sue and be sued in its own name.
(c) To issue bonds, notes, bond anticipation notes, and other
obligations of the authority, including, at the option of the
authority, obligations bearing interest that is taxable for purposes
of federal income taxation, for any of its purposes and to fund or
refund the same, all as provided in this division.
(d) To determine the location and character of a project to be
financed under the provisions of this division, to provide financial
assistance to a participating party, to enter into loan agreements
with a participating party for the financing of a project including
creating a lien or security interest in the property, to construct,
reconstruct, renovate, replace, lease, as lessor or lessee, and
regulate the same, and to enter into contracts for the sale of a
project, including installment sales or sales under conditional sales
contracts.
(e) To fix fees and charges for projects, and interest rates with
respect to loans for projects or for loan of moneys to finance
projects, and to revise from time to time the fees and charges and
interest rates, and to collect rates, rents, fees, loan repayments,
and charges for the use of, and for a facility or service furnished,
or to be furnished, by a project or part of the project and to
contract with a person, partnership, association, corporation, or
public agency with respect to the project, and to fix the terms and
conditions upon which a project may be sold or disposed of, whether
upon installment sales contracts or otherwise.
(f) To employ and fix the compensation of bond counsel, financial
consultants, and advisers as may be necessary in its judgment in
connection with the issuance and sale of any bonds, notes, bond
anticipation notes, or other obligations of the authority; to
contract to advance the purposes of this division.
(g) To purchase, with proceeds of its bonds or its revenue, bonds
issued by a public agency at a public or negotiated sale. Bonds
purchased pursuant to this subdivision may be held by the authority
or sold to public or private purchasers at public or negotiated
sales, in whole or in part, separately or together with other bonds
issued by the authority.
(h) To do all things generally necessary or convenient to carry
out the purposes of this division.
SEC. 10. Section 26011.5 of the Public Resources Code is repealed.
SEC. 11. Section 26011.6 of the Public Resources Code is repealed.
SEC. 12. Section 26011.8 of the Public Resources Code is amended
to read:
26011.8. (a) The purpose of this section is to promote the
creation of California-based manufacturing, California-based jobs,
advanced manufacturing, the reduction of greenhouse gases, or
reductions in air and water pollution or energy consumption. In
furtherance of this purpose, the authority may approve a project for
financial assistance in the form of the sales and use tax exclusion
established in Section 6010.8 of the Revenue and Taxation Code.
(b) For purposes of this section, "project" means a project as
defined in subparagraph (B) of paragraph (8) of subdivision (a) of
Section 26003.
(c) The authority shall publish notice of the availability of
project applications and deadlines for submission of project
applications to the authority.
(d) The authority shall evaluate project applications based upon
all of the following criteria:
(1) The extent to which the project develops manufacturing
facilities, or purchases equipment for manufacturing facilities,
located in California.
(2) The extent to which the anticipated benefit to the state from
the project equals or exceeds the projected benefit to the
participating party from the sales and use tax exclusion.
(3) The extent to which the project will create new, permanent
jobs in California.
(4) To the extent feasible, the extent to which the project, or
the product produced by the project, results in a reduction of
greenhouse gases, a reduction in air or water pollution, an increase
in energy efficiency, or a reduction in energy consumption, beyond
what is required by any federal or state law or regulation.
(5) The extent of unemployment in the area in which the project is
proposed to be located.
(6) Any other factors the authority deems appropriate in
accordance with this section.
(e) At a duly noticed public hearing, the authority shall approve,
by resolution, project applications for financial assistance.
(f) Notwithstanding subdivision (k), and without regard to the
actual date of any transaction between a participating party and the
authority, any project approved by the authority by resolution for
the sales and use tax exclusion pursuant to Section 6010.8 of the
Revenue and Taxation Code prior to March 24, 2010, shall not be
subject to this section.
(g) The Legislative Analyst's Office shall report to the Joint
Legislative Budget Committee on the effectiveness of this program, on
or before January 1, 2019, by evaluating factors, including, but not
limited to, the following:
(1) The number of jobs created by the program in California.
(2) The number of businesses that have remained in California or
relocated to California as a result of this program.
(3) The amount of state and local revenue and economic activity
generated by the program.
(4) The types of advanced manufacturing, as defined in paragraph
(1) of subdivision (a) of Section 26003, utilized.
(5) The amount of reduction in greenhouse gases, air pollution,
water pollution, or energy consumption.
(h) The exclusions granted pursuant to Section 6010.8 of the
Revenue and Taxation Code for projects approved by the authority
pursuant to this section shall not exceed one hundred million dollars
($100,000,000) for each calendar year.
(i) (1) The authority shall study the efficacy and cost benefit of
the sales and use tax exemption as it relates to advanced
manufacturing projects. The study shall include the number of jobs
created, the costs of each job, and the annual salary of each job.
The study shall also consider a dynamic analysis of the economic
output to the state that would occur without the sales and use tax
exemption. Before January 1, 2017, the authority shall submit to the
Legislature, consistent with Section 9795 of the Government Code, the
result of the study.
(2) Before January 1, 2014, and within six months of any
significant change to the net benefits test as described in
subdivision (d), the authority shall work with the University of
California or the California State University to perform a peer
review of the net benefits test currently used to evaluate applicants
applying pursuant to this section.
(3) Before January 1, 2015, the authority shall, consistent with
Section 9795 of the Government Code, submit to the Legislature an
interim report on the efficacy of the program conducted pursuant to
this section. The study shall include recommendations on program
changes that would increase the program's efficacy in creating
permanent and temporary jobs, and whether eligibility for the program
should be extended or narrowed to other manufacturing types. The
authority may work with the Legislative Analyst's Office in preparing
the report and its recommendations.
(j) (1) Except as provided in paragraph (2), this section shall
become inoperative on July 1, 2016, and, as of January 1, 2017, is
repealed, unless a later enacted statute, that becomes operative on
or before January 1, 2017, deletes or extends the dates on which it
becomes inoperative and is repealed. The sale or purchase of tangible
personal property of a project approved prior to June 30, 2016,
shall continue to be excluded from sales and use taxes pursuant to
Section 6010.8 of the Revenue and Taxation Code for the period of
time set forth in the authority's resolution approving the project
pursuant to this section.
(2) Notwithstanding paragraph (1), the authority's obligation to
submit to the Legislature a report pursuant to paragraph (3) of
subdivision (i) shall remain operative until the submission of the
report.
SEC. 13. Section 26011.8 is added to the Public Resources Code, to
read:
26011.8. (a) The purpose of this section is to promote the
creation of California-based manufacturing, California-based jobs,
the reduction of greenhouse gases, or reductions in air and water
pollution or energy consumption. In furtherance of this purpose, the
authority may approve a project for financial assistance in the form
of the sales and use tax exclusion established in Section 6010.8 of
the Revenue and Taxation Code.
(b) For purposes of this section, "project" means a project as
defined in subparagraph (B) of paragraph (7) of subdivision (a) of
Section 26003.
(c) The authority shall publish notice of the availability of
project applications and deadlines for submission of project
applications to the authority.
(d) The authority shall evaluate project applications based upon a
net benefits test that includes all of the following criteria:
(1) The extent to which the project develops manufacturing
facilities, or purchases equipment for manufacturing facilities,
located in California.
(2) The extent to which the anticipated benefit
to the state from the project equals or exceeds the projected
benefit to the participating party from the sales and use tax
exclusion.
(3) The extent to which the project will create new, permanent
jobs in California.
(4) To the extent feasible, the extent to which the project, or
the product produced by the project, results in a reduction of
greenhouse gases, a reduction in air or water pollution, an increase
in energy efficiency, or a reduction in energy consumption, beyond
what is required by any federal or state law or regulation.
(5) The extent of unemployment in the area in which the project is
proposed to be located.
(6) Any other factors the authority deems appropriate in
accordance with this section.
(e) At a duly noticed public hearing, the authority shall approve,
by resolution, project applications for financial assistance.
(f) Notwithstanding subdivision (k), and without regard to the
actual date of any transaction between a participating party and the
authority, any project as defined in paragraph (7) of subdivision (a)
of Section 26003 approved by the authority by resolution for the
sales and use tax exclusion pursuant to Section 6010.8 of the Revenue
and Taxation Code prior to March 24, 2010, shall not be subject to
this section.
(g) The Legislative Analyst's Office shall report to the Joint
Legislative Budget Committee on the effectiveness of this program, on
or before January 1, 2019, by evaluating factors, including, but not
limited to, the following:
(1) The number of jobs created by the program in California.
(2) The number of businesses that have remained in California or
relocated to California as a result of this program.
(3) The amount of state and local revenue and economic activity
generated by the program.
(4) The amount of reduction in greenhouse gases, air pollution,
water pollution, or energy consumption.
(h) The exclusions granted pursuant to Section 6010.8 of the
Revenue and Taxation Code for projects approved by the authority
pursuant to this section shall not exceed one hundred million dollars
($100,000,000) for each calendar year.
(i) The authority shall make every effort to expedite the
operation of this section, and shall adopt regulations for purposes
of implementing the section as emergency regulations in accordance
with Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code. For purposes of that
Chapter 3.5, including Section 11349.6 of the Government Code, the
adoption of the regulations shall be considered by the Office of
Administrative Law to be necessary for the immediate preservation of
the public peace, health and safety, and general welfare.
(j) If any significant changes are made to the net benefits test,
as described in subdivision (d), the authority shall work with the
University of California or the California State University to
perform a peer review of the net benefits test currently used to
evaluate applicants applying pursuant to this section.
(k) This section shall become operative on July 1, 2016, and shall
remain in effect only until January 1, 2021, and as of that date is
repealed. The sale or purchase of tangible personal property of a
project approved prior to January 1, 2021, shall continue to be
excluded from sales and use taxes pursuant to Section 6010.8 of the
Revenue and Taxation Code for the period of time set forth in the
authority's resolution approving the project pursuant to this
section.
SEC. 14. Section 26012 of the Public Resources Code is repealed.
SEC. 15. Section 26013 of the Public Resources Code is repealed.
SEC. 16. Section 26014 of the Public Resources Code is amended to
read:
26014. When the principal of and interest on bonds of the
authority issued to finance or refund the cost of a particular
project for a participating party shall have been fully paid and
retired or when adequate provision shall have been made for the
payment and retirement of the same, and all other conditions of the
resolution, indenture, or agreement authorizing and securing the same
shall have been satisfied and the lien of such resolution,
indenture, or agreement shall have been released in accordance with
the provisions thereof, the authority is authorized, upon such terms
and conditions as may be prescribed by the authority, to execute such
deeds and conveyances as are necessary or required to convey title
to such project to such participating party.
SEC. 17. Section 26015 of the Public Resources Code is amended to
read:
26015. (a) The authority, or the executive director of the
authority, if authorized to do so by resolution of the authority,
shall take official action towards the issuance of bonds with respect
to any participating party at the next meeting of the authority
occurring more than 30 days following receipt of such application or
if by the executive director within 45 days of such receipt. The
executive director may be authorized to take such action in a
resolution of general authority. Official action towards the issuance
of bonds may reserve the right of the authority to further review an
application for financing and to consider the terms thereof prior to
the issuance of bonds therefor.
(b) The authority shall take final action to approve or disapprove
of the issuance of bonds or notes to lend financial assistance to
participating parties within 60 days of the receipt by the authority
of a request from such participating party for such action. Any such
request by a participating party for such final action shall be
accompanied by evidence of fulfillment of any and all conditions to
the issuance of such bonds or notes imposed at the time the first
action towards the issuance thereof was taken by the authority and by
copies of forms of all principal legal documents to be approved by
the authority.
(c) The authority may give final approval for the issuance of such
bonds or notes upon such terms as it reasonably deems necessary or
desirable.
(d) Any action under this section shall be at the sole discretion
of the authority.
SEC. 18. Section 26016 of the Public Resources Code is repealed.
SEC. 19. Section 26016.5 of the Public Resources Code is repealed.
SEC. 20. Section 26017 of the Public Resources Code is amended to
read:
26017. The authority, no later than March 31 of each year, shall
submit to the Legislature a report of its activities for the
preceding calendar year ending December 31. Such report shall include
(a) a listing of the applications received, (b) a listing of the
applications accepted for financing, (c) a specification of bonds
sold, interest rates thereon, and whether bond sales were pursuant to
public bid or were negotiated, (d) a specification of the amount of
bonds authorized but currently unsold, (e) a projection of the
authority's needs and requirements for the coming year, and (f) a
report of revenues and expenditures for the preceding fiscal year.
SEC. 21. Section 26020 of the Public Resources Code is repealed.
SEC. 22. Section 26021 of the Public Resources Code is repealed.
SEC. 23. Section 26022 of the Public Resources Code is amended to
read:
26022. (a) The authority is authorized from time to time to issue
its negotiable bonds, notes, debentures, or other securities
(hereinafter collectively called "bonds") for any of its purposes.
The bonds may be authorized, without limiting the generality of the
foregoing, to finance a single project for a single participating
party, a series of projects for a single participating party, a
single project for several participating parties, or several projects
for several participating parties, or the purchase and sale of
alternative source energy or projects pursuant to subdivision (g) of
Section 26011. The authority 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 three years from the
date of issue of the original note.
(b) Except as may otherwise be expressly provided by the
authority, every issue of its bonds, notes, or other obligations
shall be general obligations of the authority payable from any
revenues or moneys of the authority available for these purposes and
not otherwise pledged, subject only to any agreements with the
holders of particular bonds, notes, or other obligations pledging any
particular revenues or moneys and subject to any agreements with any
participating party. 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) 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 50
years from their respective dates, bear interest at the fixed rate
or rates, or at the variable rates, including multiple methods of
setting rates from time to time while the bonds are outstanding, be
payable at the time or times, be in the denominations, 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 or
tender, as the resolution or resolutions may provide. The bonds or
notes shall be sold by the Treasurer as agent for sale. 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 Treasurer may issue interim
receipts, certificates, or temporary bonds that shall be exchanged
for the definitive bonds. The Treasurer 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 or any credit provider to be
authorized, as to all of the following:
(1) Pledging the full faith and credit of the authority or
pledging all or part of the revenues of a project or a
revenue-producing contract or contracts made by the authority with an
individual, partnership, corporation, or association or other body,
public or private, or other moneys of the authority, 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 rentals, fees, purchase payments, loan repayments, and
other charges to be charged, and the amounts to be raised in each
year by the charges, and the use and disposition of the revenues.
(3) The setting aside of reserves or sinking funds, and the
regulation and disposition of the reserves or sinking funds.
(4) Limitations on the right of the authority or its 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.
(5) 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.
(6) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.
(7) 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.
(8) Limitations on expenditures for operating, administrative, or
other expenses of the authority.
(9) Defining the acts or omissions to act that constitute a
default in the duties of the authority to holders of its obligations
and providing the rights and remedies of the holders in the event of
a default.
(10) The mortgaging of a project and the site of the project for
the purpose of securing the bondholders.
(11) The mortgaging of land, improvements, or other assets owned
by a participating party for the purpose of securing the bondholders.
(12) Provisions for the security of any provider of credit
enhancement supporting payment on the bonds, but only in a manner
subordinate to the right of bondholders.
(e) Neither the members of the authority nor a person executing
the bonds or notes shall 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 without the
cancellation thereof. The authority may hold, pledge, cancel, or
resell those bonds, subject to and in accordance with agreements with
bondholders.
SEC. 24. Section 26023 of the Public Resources Code is amended to
read:
26023. In the discretion of the authority, any bonds issued under
the provisions of this division may be secured by a trust agreement
by and between the authority and a corporate trustee or trustees,
which may be the State Treasurer or any trust company or bank having
the powers of a trust company within or without the state. Such trust
agreement or the resolution providing for the issuance of such bonds
may pledge or assign the revenues to be received or proceeds of any
contract or contracts pledged and may convey or mortgage the project
or projects, or any portion thereof, to be financed out of the
proceeds of such bonds. Such trust agreement or resolution providing
for the issuance of such bonds may contain such provisions for
protecting and enforcing the rights and remedies of the bondholders
or any credit provider as may be reasonable and proper and not in
violation of law, including particularly such provisions as have
hereinabove been specifically authorized to be included in any
resolution or resolutions of the authority 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 or any credit provider. 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 or any credit
provider. Notwithstanding any other provision of law, the State
Treasurer shall not be deemed to have a conflict of interest by
reason of acting as trustee pursuant to this division. All expenses
incurred in carrying out the provisions of such trust agreement or
resolution may be treated as a part of the cost of the operation of a
project.
SEC. 25. Section 26024 of the Public Resources Code is amended to
read:
26024. Bonds issued under the provisions of this division 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, other than the authority, but shall be payable solely
from the funds herein provided therefor. 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 or any local agency is pledged to the payment of the
principal of or interest on this bond."
The issuance of bonds under the provisions of this division 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 nor 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 division.
SEC. 26. Section 26025 of the Public Resources Code is amended to
read:
26025. (a) The authority is hereby authorized to provide for the
issuance of bonds of the authority for the purpose of refunding,
directly or indirectly, any bonds, notes, or other evidence of
indebtedness of the authority or any public agency 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 bonds, and, if deemed
advisable by the authority, for the additional purpose of paying all
or any part of the cost of constructing and acquiring additions,
improvements, extensions, or enlargements of a project or any portion
thereof.
(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 date as may be determined by the
authority.
(c) Pending such use, any such escrowed proceeds may be invested
and reinvested by the State Treasurer or any trustee in instruments
as may be specified in the resolution or indenture governing the
bonds to be refunded, maturing at such 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 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 division. Prior to refunding bonds or
evidence of indebtedness not originally issued by the authority, the
authority shall make findings that the project being refinanced
qualifies as a project as defined in subparagraph (A) of paragraph
(8) of subdivision (a) of Section 26003 until June 30, 2016, and as
of July 1, 2016, as defined in subparagraph (A) of paragraph (7) of
subdivision (a) of Section 26003.
SEC. 27. Section 26026 of the Public Resources Code is repealed.
SEC. 28. Section 26027 of the Public Resources Code is repealed.
SEC. 29. Section 26030 of the Public Resources Code is amended to
read:
26030. The authority may contract with any participating party
for the construction or acquisition of a project by such
participating party. All such contracts for the construction or
acquisition of a project by a participating party shall provide that
the participating party shall be responsible for the architectural
and engineering design and for the construction and completion
thereof, subject to such standards for architectural and engineering
design as may be established, and subject to such supervision as the
authority deems necessary. The authority may agree to pay the cost of
such project constructed or acquired by any participating party and
to advance such costs from time to time in installments or otherwise
as required by the contract for the construction or acquisition
thereof. Title to all such projects may be vested in the authority
subject to the terms of any lease thereof to the participating party
or the rights of a participating party under any contract for the
purchase or acquisition of such project including the payment of the
purchase price under installment sales contracts.
SEC. 30. Section 26033 of the Public Resources Code is amended to
read:
26033. All moneys received pursuant to the provisions of this
division, whether as proceeds from the sale of bonds, notes, or other
evidences of indebtedness or as revenues, or as fees received by the
authority, shall be deemed to be trust funds to be held and applied
solely as provided in this division. Any bank or trust company with
which such moneys shall be deposited shall act as trustee of such
moneys and shall hold and apply the same for the purposes hereof,
subject to such regulations as the resolution authorizing the bonds
of any issue or the trust agreements securing such bonds may provide.
SEC. 31. Section 26034 of the Public Resources Code is amended to
read:
26034. Any holder of bonds, notes, or other obligations issued
under the provisions of this division, and the trustee or trustees
under any trust agreement, except to the extent the rights herein
given may be restricted by any resolution authorizing the issuance
of, or any such trust agreement securing, such bonds, notes, or other
obligations, may, either at law or in equity, by suit, action,
mandamus, or other proceedings, protect and enforce any and all
rights under the laws of the state or granted hereunder or under such
resolution or trust agreements, and may enforce and compel the
performance of all duties required by this division or by such
resolution or trust agreement to be performed by the authority or by
any officer, employee, or agent thereof, including the fixing,
charging, and collecting of the rates, rents, fees, and charges
herein authorized and required by the provisions of such resolution
or trust agreement to be fixed, established, and collected.
SEC. 32. Section 26035 of the Public Resources Code is amended to
read:
26035. The exercise of the powers granted by this division shall
be in all respects for the benefit of the people of this state, for
their health and welfare, and protection of the state's environment.
Any bonds, notes, or other obligations issued under the provisions of
this division, their transfer and the income therefrom, shall at all
times be free from taxation of every kind by the state and by
municipalities and other political subdivisions of the state.
SEC. 33. Chapter 4 (commencing with Section 26050) is added to
Division 16 of the Public Resources Code, to read:
CHAPTER 4. PROPERTY ASSESSED CLEAN ENERGY (PACE) AND CLEAN
ENERGY FINANCING PROGRAM
Article 1. General Provisions and Definitions
26050. (a) The Legislature finds and declares all of the
following:
(1) Property Assessed Clean Energy (PACE) financing has been
pioneered by municipalities and counties in California as a way for
homeowners and small business owners to finance voluntary energy and
water efficiency and clean energy improvements.
(2) PACE financing was pioneered in the City of Berkeley, while
the City and County of San Francisco, City of San Diego, City of Palm
Desert, Sonoma County, and the California Statewide Communities
Development Authority (CSCDA) have already initiated or are working
to launch additional programs.
(3) Seventeen other states, including Colorado and New York, have
also enacted enabling PACE legislation.
(4) The public subsidy provided by the PACE financing is justified
by the benefits received in job creation, lower energy demand, and
spurring new clean industries that will grow the economy.
(b) It is the intent of the Legislature to assist local
jurisdictions in financing the installation of distributed generation
renewable energy sources, electric vehicle charging infrastructure,
or energy or water efficiency improvements that are permanently fixed
to real property through the use of voluntary contractual
assessments.
(c) It is not the intent of the Legislature to create any debt,
liability, or obligation on the part of the state in assisting local
jurisdictions pursuant to this division.
26050.5. The Legislature further finds and declares both of the
following:
(a) Actions by federally chartered home loan entities have
frustrated efforts to accelerate the implementation of the PACE
financing program, creating a need to establish effective alternative
approaches that can be rapidly deployed to advance the purposes of
this division.
(b) Among the most promising alternatives that can be implemented
rapidly are those intended to increase access to capital for projects
that advance the purposes of this division.
26051. Unless the context otherwise requires, the definitions in
this article govern the construction of this chapter.
26052. "Applicant" means, for the purposes of Article 2
(commencing with Section 26060), a public agency as defined in
paragraph (3) of subdivision (c) of Section 5898.20 of the Streets
and Highways Code and, for the purposes of Article 3 (commencing with
Section 26070), a financial institution providing a loan pursuant to
that chapter to finance the installation of distributed generation
renewable energy sources, electric vehicle charging infrastructure,
or energy or water efficiency improvements.
26053. "Clean Energy Upgrade Program" means a statewide energy
and water efficiency and renewable energy generation building
retrofit financing program developed by the State Energy Resources
Conservation and Development Commission and the authority pursuant to
Section 26070.
26054. "Property Assessed Clean Energy bond" or "PACE bond" means
a bond that is secured by any of the following:
(a) A voluntary contractual assessment on property authorized
pursuant to paragraph (2) of subdivision (a) of Section 5898.20 of
the Streets and Highways Code.
(b) A voluntary
contractual assessment or a voluntary special tax on property to
finance the installation of distributed generation renewable energy
sources, electric vehicle charging infrastructure, or energy or water
efficiency improvements that is levied pursuant to a chartered city'
s constitutional authority under Section 5 of Article XI of the
California Constitution.
(c) A special tax on property authorized pursuant to subdivision
(b) of Section 53328.1 of the Government Code.
26055. "PACE program" means a program established by an applicant
that is financed by the PACE bond.
26056. This chapter does not create any liability or obligation
upon the State of California and none shall be incurred by the
authority beyond the extent to which moneys shall have been provided
under this division. The authority shall not create any debt,
liability, or obligation on the part of the State of California
payable from any source whatsoever other than the moneys provided
under this chapter.
Article 2. PACE Reserve Program
26060. The authority shall develop and administer a PACE Reserve
program to reduce overall costs to the property owners of PACE bonds
issued by an applicant by providing a reserve of no more than 10
percent of the initial principal amount of the PACE bond.
26061. To qualify for assistance pursuant to this chapter, the
PACE program shall require all of the following:
(a) The interest rate on the PACE bond does not exceed a
percentage as determined by the authority to be appropriate.
(b) Minimum legal loan structure and credit underwriting criteria
as determined by the authority are met.
(c) Proceeds of the PACE bonds are used to finance qualified
energy and water efficiency, electric vehicle charging
infrastructure, and clean energy improvements.
(d) The improvement financed is for a residential project of three
units or fewer, or a commercial project that costs less than
twenty-five thousand dollars ($25,000) in total.
26062. An applicant shall submit to the authority an application
providing a detailed description of the PACE program, a detailed
description of the transactional activities associated with the PACE
bond issuance, including all transactional costs, and other
information deemed necessary by the authority.
26063. (a) In evaluating eligibility, the authority shall
consider whether the applicant's PACE program includes the following
conditions:
(1) Loan recipients are legal owners of underlying property.
(2) Loan recipients are current on mortgage and property tax
payments.
(3) Loan recipients are not in default or in bankruptcy
proceedings.
(4) Loans are for less than 10 percent of the value of the
property.
(5) The property is within the geographical boundaries of the PACE
program.
(6) The program offers financing for energy efficiency
improvements or electric vehicle charging infrastructure.
(7) Improvements financed by the program follow applicable
standards of energy efficiency retrofit work, including any
guidelines adopted by the State Energy Resources Conservation and
Development Commission.
(b) In evaluating an application, the authority shall consider all
of the following factors:
(1) The use by the PACE program of best practices, adopted by the
authority, to qualify eligible properties for participation in
underwriting the PACE program.
(2) The cost efficiency of the applicant's PACE program, including
bond issuance.
(3) The projected number of jobs created by the PACE program.
(4) The applicant's PACE program requirements for quality
assurance and consumer protection as related to achieving efficiency
and clean energy production.
(5) The mechanisms by which savings produced by this program are
passed on to the property owners.
(6) Any other factors deemed appropriate by the authority.
26064. The authority shall review the applicant's PACE bond
issuance, including, but not limited to, indenture, trust agreement,
and fiscal agent agreement ("the bond documents") and, when the
authority is satisfied that the bond documents are consistent with
the requirements of the PACE Reserve program established pursuant to
this chapter, the authority shall advance to the applicant or the
applicant's bond trustee, at the closing of the applicant's PACE
bonds, the amount made available from the Renewable Resource Trust
Fund and approved by the authority for use in the PACE bond's reserve
fund under the bond documents. Prior to the disbursement of moneys
pursuant to this section into a reserve fund, the authority shall
enter into an agreement with the applicant regarding the creation and
operation of the reserve fund, including the manner in which the
authority will be repaid for any moneys disbursed to the reserve
fund.
Article 3. Clean Energy Upgrade Program
26070. The authority shall administer a Clean Energy Upgrade
Program to reduce overall costs to the property owners of a loan
provided by an applicant to finance the installation of distributed
generation renewable energy sources, electric vehicle charging
infrastructure, or energy or water efficiency improvements that are
permanently fixed to real property by providing a reserve or other
financial assistance at a level to be determined by the State Energy
Resources Conservation and Development Commission and the authority.
Improvements financed pursuant to this program shall be for a
residential project of three units or fewer or a commercial project
that costs less than twenty-five thousand dollars ($25,000) in total.
26071. (a) The authority shall adopt regulations governing the
implementation of this chapter, including quality assurance pursuant
to subdivision (b) of Section 26072, at a publicly noticed meeting.
Notwithstanding any other law, regulations adopted pursuant to this
section may be adopted as emergency regulations pursuant to Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code.
(b) For the purposes of Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code,
including Section 11349.6 of that code, the Office of Administrative
Law shall consider the adoption of the regulations pursuant to
subdivision (a) to be necessary for the immediate preservation of the
public peace, health and safety, and general welfare.
26072. (a) An applicant shall submit to the authority an
application providing a detailed description of the loan program to
finance the installation of distributed generation renewable energy
sources, electric vehicle charging infrastructure, or energy or water
efficiency improvements on real property, a detailed description of
the transactional activities associated with the loan issuance,
including all transactional costs, and other information deemed
necessary by the authority.
(b) The authority shall ensure that all improvements financed by
the program meet quality assurance standards developed by the
authority in consultation with the State Energy Resources
Conservation and Development Commission. The standards shall include
contractor certification and third-party inspection of an appropriate
portion of completed projects to ensure project performance and
consumer protection.
26073. (a) In evaluating eligibility, the authority shall
consider whether the applicant's loan program includes the following
conditions:
(1) Loan recipients are legal owners of underlying property.
(2) Loan recipients are current on mortgage and property tax
payments.
(3) Loan recipients are not in default or in bankruptcy
proceedings.
(4) Loans are for less than 10 percent of the value of the
property.
(5) The program offers financing for energy and water efficiency
improvements.
(6) Improvements financed by the program follow applicable
standards of energy efficiency retrofit work, including any
guidelines adopted by the State Energy Resources Conservation and
Development Commission.
(b) In evaluating an application, the authority shall consider all
of the following factors:
(1) The use by the loan program of best practices, adopted by the
authority, to qualify eligible properties for participation in
underwriting the loan program.
(2) The cost efficiency of the applicant's loan program.
(3) The projected number of jobs created by the loan program.
(4) The applicant's loan program requirements for quality
assurance and consumer protection, as related to achieving efficiency
and clean energy production, in accordance with the standards
developed pursuant to subdivision (b) of Section 26072.
(5) The mechanisms by which savings produced by this program are
passed on to the property owners.
(6) Any other factors deemed appropriate by the authority.
(c) The authority may approve a loan program that offers financing
for electric vehicle charging infrastructure if the electric vehicle
charging infrastructure is part of a project to install energy
efficiency improvements and distributed generation renewable energy
resources and is designed so that the project does not increase peak
energy demand.
26074. (a) The authority shall require certification from a loan
applicant that each loan offered pursuant to the applicant's loan
program is consistent with the requirements of the Clean Energy
Upgrade Program administered pursuant to this chapter.
(b) If the conditions of subdivision (a) are satisfied, the
authority shall allocate to the applicant, at the closing of the
loan, the amount made available from the Renewable Resource Trust
Fund in the form of financial assistance as approved by the State
Energy Resources Conservation and Development Commission and the
authority. Prior to providing financial assistance pursuant to this
section, the authority shall enter into an agreement with the
applicant regarding the financial assistance, including the process
for the possible return of moneys disbursed to or on behalf of the
applicant.
Article 4. Appropriation and Reporting
26080. (a) Until January 1, 2015, an amount of up to fifty
million dollars ($50,000,000) from the Renewable Resource Trust Fund,
established pursuant to Section 25751, is hereby appropriated to the
authority for the purposes of this chapter. The moneys appropriated
shall remain in the Renewable Resource Trust Fund until the funds are
needed by the authority pursuant to this chapter.
(b) Of the moneys appropriated in subdivision (a), up to five
hundred fifty thousand dollars ($550,000) may be expended by the
authority for the initial administrative costs in implementing this
chapter.
(c) All repayments of moneys disbursed pursuant to this chapter
shall be deposited into the Renewable Resource Trust Fund.
26081. (a) On March 31, 2011, and annually thereafter, the
authority shall submit to the Legislature a report pursuant to
Section 9795 of the Government Code on all of the following:
(1) The status of the account.
(2) A summary of the PACE bonds that received assistance pursuant
to Article 2 (commencing with Section 26060) and a summary of the
loans that received assistance pursuant to Article 3 (commencing with
Section 26070).
(3) A summary of the benefits provided by this division, including
reduced interest rates on the PACE bonds or on loans receiving
assistance pursuant to this division.
(4) The number of jobs created by the PACE programs or loans that
received assistance pursuant to this chapter.
(5) Information on energy and water savings resulting from the
PACE programs or loans that received assistance pursuant to this
chapter.
(6) Other information deemed appropriate by the authority.
(b) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
26082. (a) Notwithstanding Section 26080, twenty-five million
dollars ($25,000,000) of the unencumbered balance of the fifty
million dollars ($50,000,000) that was appropriated to the authority
pursuant to Section 26080 and is in the Renewable Resource Trust Fund
is hereby appropriated to the Energy Conservation Assistance Account
established pursuant to Section 25416.
(b) Notwithstanding Section 25421, any unexpended funds
appropriated pursuant to subdivision (a) remaining in the Energy
Conservation Assistance Account on and after January 1, 2013, except
to the extent those funds are encumbered pursuant to Section 25417.5,
shall revert to the Renewable Resource Trust Fund and be available
to the authority for the purposes of this chapter.
SEC. 34. Division 16.2 (commencing with Section 26100) of the
Public Resources Code is repealed.
SEC. 35. Section 6010.8 of the Revenue and Taxation Code is
amended to read:
6010.8. (a) "Sale" and "purchase" do not include any lease or
transfer of title of tangible personal property constituting any
project to any participating party. As used in this section, "project"
has the meaning specified in subparagraph (B) of paragraph (8) of
subdivision (a) of Section 26003 of the Public Resources Code and
"participating party" has the meaning specified in subparagraph (B)
of paragraph (7) of subdivision (a) of Section 26003 of the Public
Resources Code.
(b) This section shall become inoperative on July 1, 2016, and, as
of January 1, 2017, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2017, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 36. Section 6010.8 is added to the Revenue and Taxation Code,
to read:
6010.8. (a) "Sale" and "purchase" do not include any lease or
transfer of title of tangible personal property constituting any
project to any participating party. As used in this section, "project"
has the meaning specified in subparagraph (B) of paragraph (7) of
subdivision (a) of Section 26003 of the Public Resources Code and
"participating party" has the meaning specified in subparagraph (B)
of paragraph (6) of subdivision (a) of Section 26003 of the Public
Resources Code.
(b) This section shall become operative on July 1, 2016.
