BILL NUMBER: SBX1 31 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 7, 2001
AMENDED IN ASSEMBLY MAY 7, 2001
AMENDED IN ASSEMBLY APRIL 5, 2001
INTRODUCED BY Senator Burton
FEBRUARY 5, 2001
An act to amend Section 1731 of, and to add Section 1768 to, the
Public Utilities Code, and to amend Sections 80106, 80130, 80132, and
80200 of, and to repeal Section 80114 of, the Water Code, and to
amend and repeal Section 6 of Chapter 4 of the Statutes of 2001 of
the First Extraordinary Session, relating to energy, and
making an appropriation therefor , and declaring the urgency
thereof, to take effect immediately .
LEGISLATIVE COUNSEL'S DIGEST
SB 31, as amended, Burton. Electric power.
(1) Under existing law, after any order or decision has been made
by the Public Utilities Commission, any party to the action or
proceeding, or any stockholder or bondholder or other party
pecuniarily interested in the public utility affected, may apply for
a rehearing in respect to any matters determined in the action or
proceeding and specified in the application for rehearing.
This bill would prohibit a cause of action arising out of any
order or decision of the commission construing, applying, or
implementing the provisions of Chapter 4 of the Statutes of 2001-02
First Extraordinary Session (AB 1) from accruing in any court to any
corporation or person unless the corporation or person has filed an
application to the commission for a rehearing within 10 days after
the date of issuance, and the commission would be required to issue
its decision and order on rehearing within 20 days after the filing
of that application.
This bill would also set forth a specific procedure with regard to
judicial review of an order or decision of the commission
interpreting, implementing, or applying the provisions of the above
referenced Chapter 4.
(2) Existing law authorizes the Department of Water Resources to
contract with an electrical corporation to transmit or provide for
the transmission of, and distribute the power and provide billing,
collection, and other related services, as the agent of the
department, on terms and conditions that reasonably compensate the
electrical corporation for its services, and requires the commission,
at the request of the department, to order such actions. Under
existing law, upon the delivery of power to them, the retail end-use
customers are deemed to have purchased that power from the
department.
This bill would modify the existing transmission, distribution,
and related service provisions to authorize the department to
contract with an electrical corporation to transmit or provide for
the transmission of, and distribute all power made available by the
department, and provide, as the agent of the department, billing,
collection, and other related services on terms and conditions that
reasonably compensate the electrical corporation for its services and
adequately secure payment to the department, and would make
corresponding changes to the commission's requirement to order that
service at the request of the department.
(3) Existing law authorizes the department to enter into contracts
for the purchase of electric power and to sell power to retail
end-use customers and to local publicly owned electric utilities.
Existing law requires the commission to take necessary action to
ensure that all, or a portion of, the component rates that are
available to electrical corporations for the purchase of their net
short position of electricity are used to recover the revenue
requirements for the purchase and sale functions described in this
paragraph.
This bill would repeal that commission requirement.
(4) Existing law authorizes the department to issue revenue bonds
for purposes described in (3) not to exceed a certain amount,
containing specified terms and conditions, upon authorization by
written determination of the department and with the approval of the
Director of Finance and the Treasurer.
This bill would, instead, authorize the issuance of the bonds in
an aggregate amount up to the greater of $13,423,000,000 or the
amount calculated by multiplying by a factor of 4 the annual revenues
generated by the California Procurement Adjustment. By increasing
the amount of proceeds from the issuance of revenue bonds that may be
expended from a continuously appropriated special fund, the bill
would make an appropriation.
(5) This bill would make other related clarifying and technical
changes.
(6) The bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3 majority .
Appropriation: yes. Fiscal committee: yes. State-mandated local
program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1731 of the Public Utilities Code is amended to
read:
1731. (a) The commission shall set an effective date when issuing
an order or decision. The commission may set the effective date of
an order or decision prior to the date of issuance of the order or
decision.
(b) After any order or decision has been made by the commission,
any party to the action or proceeding, or any stockholder or
bondholder or other party pecuniarily interested in the public
utility affected, may apply for a rehearing in respect to any matters
determined in the action or proceeding and specified in the
application for rehearing. The commission may grant and hold a
rehearing on those matters, if in its judgment sufficient reason is
made to appear. No cause of action arising out of any order or
decision of the commission shall accrue in any court to any
corporation or person unless the corporation or person has filed an
application to the commission for a rehearing within 30 days after
the date of issuance or within 10 days after the date of issuance in
the case of an order issued pursuant to either Article 5 (commencing
with Section 816) or Article 6 (commencing with Section 851) of
Chapter 4 relating to security transactions and the transfer or
encumbrance of utility property. For purposes of this article, "date
of issuance" means the date when the commission mails the order or
decision to the parties to the action or proceeding.
(c) No cause of action arising out of any order or decision of the
commission construing, applying, or implementing the provisions of
Chapter 4 of the Statutes of 2001-02 First Extraordinary Session
shall accrue in any court to any corporation or person unless the
corporation or person has filed an application to the commission for
a rehearing within 10 days after the date of issuance of the order or
decision. The commission shall issue its decision and order on
rehearing within 20 days after the filing of that application.
SEC. 2. Section 1768 is added to the Public Utilities Code, to
read:
1768. The following procedures shall apply to judicial review of
an order or decision of the commission interpreting, implementing, or
applying the provisions of Chapter 4 of the Statutes of 2001-02
First Extraordinary Session:
(a) Within 30 days after the commission issues its order or
decision denying the application for a rehearing, or, if the
application is granted, then within 30 days after the commission
issues its decision on rehearing, any aggrieved party may petition
for a writ of review in the California Supreme Court for the purpose
of determining the lawfulness of the original order or decision or of
the order or decision on rehearing. If the writ issues, it shall be
made returnable at a time and place specified by court order and
shall direct the commission to certify its record in the case to the
court within the time specified. No order of the commission
interpreting, implementing, or applying the provisions of Chapter 4
of the Statutes of 2001-02 First Extraordinary Session shall be
subject to review in the courts of appeal.
(b) The petition for review shall be served upon the executive
director of the commission either personally or by service at the
office of the commission.
(c) For purposes of this section, the issuance of a decision or
the granting of an application shall be construed to have occurred on
the date when the commission mails the decision or grant to the
parties to the action or proceeding.
(d) All actions and proceedings under this section and all actions
or proceedings to which the commission or the people of the State of
California are parties in which any question arises under this
section, or under or concerning any order or decision of the
commission under this section, shall be preferred over, and shall be
heard and determined in preference to, all other civil business
except election causes, irrespective of position on the calendar.
(e) The provisions of this article apply to actions under this
section to the extent that those provisions are not in conflict with
this section.
SEC. 3. Section 80106 of the Water Code is amended to read:
80106. (a) The department may contract with the related
electrical corporation or its successor in the performance of related
service, for the electrical corporation or its successor in the
performance of related service, to transmit or provide for the
transmission of, and distribute all power made available by the
department, and, as agent of the department, provide billing,
collection, and other related services on terms and conditions that
reasonably compensate the electrical corporation for its services,
and adequately secure payment to the department.
(b) At the request of the department, the commission shall order
the related electrical corporation or its successor in the
performance of related service, to transmit or provide for the
transmission of, and distribute all power made available by the
department, and, as agent of the department, provide billing,
collection, and other related services on terms and conditions that
reasonably compensate the electrical corporation for its services,
and adequately secure payment to the department.
SEC. 4. Section 80114 of the Water Code, as added by Chapter 4 of
the Statutes of 2001, is repealed.
SEC. 5. Section 80130 of the Water Code is amended to read:
80130. The department may incur indebtedness and issue bonds as
evidence thereof, provided that bonds may not be issued in an amount
the debt service on which, to the extent payable from the fund, is
estimated by the department to exceed the amounts estimated to be
available in the fund for their payment. The department may
authorize the issuance of bonds (excluding notes issued in
anticipation of the issuance of bonds and retired from the proceeds
of those bonds) in an aggregate amount up to the greater of thirteen
billion four hundred twenty-three million dollars ($13,423,000,000)
or the amount calculated by multiplying by a factor of four the
annual revenues generated by the California Procurement Adjustment,
as determined by the commission pursuant to Section 360.5 of the
Public Utilities Code; provided, such aggregate amount shall not
exceed thirteen billion four hundred twenty-three million dollars
($13,423,000,000). Nothing in this section shall prohibit the
department from issuing bonds prior to the effective date of this
bill based upon the authorization granted to the department by the
provisions of Chapter 4 of the Statutes of 2001-02 First
Extraordinary Session. Refunding of bonds to obtain a lower interest
rate shall not be included in the calculation of the aggregate
amount. In addition, before the issuance of bonds in a public
offering, the department shall establish a mechanism to ensure that
the bonds will be sold at investment grade ratings and repaid on a
timely basis from pledged revenues. This mechanism may include, but
is not limited to, an agreement between the department and the
commission as described in Section 80110.
SEC. 6. Section 80132 of the Water Code is amended to read:
80132. (a) Bonds may be issued by the department upon
authorization by written determination of the director of the
department with the approval of the Director of Finance and the State
Treasurer. The Department of Finance shall notify the Chairperson
of the Joint Legislative Budget Committee and the chairperson of the
committee in each house that considers appropriations of its written
determination. The bonds shall be sold at such prices and in such
manner, and on such terms and conditions, as shall be specified in
such determination, and such determination may contain or authorize
any other provision, condition, or limitation not inconsistent
herewith and such provisions as may be deemed reasonable and proper
for the security of the bondholders. Bonds may mature at such time
or times, and bear interest at such rate or rates, which may be fixed
or variable and be determined by reference to an index or such other
method, as shall be specified in such determination. Neither the
person executing the determination to issue bonds nor any person
executing bonds shall be personally liable therefor or be subject to
any personal liability or accountability by reason of the issuance
thereof.
(b) In the discretion of the department, any bonds may be secured
by a trust agreement by and between the department and a corporate
trustee, which may be any trust company or bank having trust powers
within or without the state, or the State Treasurer. Notwithstanding
any other provision of law, the State Treasurer shall not be deemed
to have a conflict of interest by reason of acting as such trustee.
The department may enter into such contracts or arrangements as it
shall deem to be necessary or appropriate for the issuance and
further security of the bonds.
(c) Bonds shall be legal investments for all trust funds, the
funds of all insurance companies, banks both commercial and savings,
trust companies, executors, administrators, trustees, and other
fiduciaries, for state school funds, pension funds, and, for any
funds that may be invested in county, school, or municipal bonds.
(d) Notwithstanding that bonds may be payable from a special fund,
they shall be deemed to be negotiable instruments for all purposes.
(e) Any and all bonds, their transfer and the income therefrom
shall at all times be free from taxation of every kind by the state
and by all political subdivisions of the state.
(f) Bonds shall not be deemed to constitute a debt or liability of
the state or of any political subdivision thereof, other than the
department, 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 for. All bonds 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 the
principal of or interest on this bond." The issuance of bonds 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.
(g) The department may pledge or assign any revenues under any
obligation entered into, and rights to receive the same, and moneys
on deposit in the fund and income or revenue derived from the
investment thereof, as security for the department's obligations
hereunder. It is the intention of the Legislature that any pledge of
moneys, revenues, or property made by the department shall be valid
and binding from the time when the pledge is made; that the moneys,
revenues, or property so pledged and thereafter collected from retail
end use customers, or paid directly or indirectly to or for the
account of the department, is hereby made, and shall immediately be,
subject to the lien of such pledge without any physical delivery
thereof or further act; that the lien of any such pledge shall be
valid and binding as against all parties having claims of any kind in
tort, contract, or otherwise against the department irrespective of
whether such parties have notice thereof, and that no resolution or
instrument by which such pledge or lien created pursuant to this
subdivision is expressed, confirmed, or approved need be filed or
recorded in order to perfect such pledge or lien. The provisions
hereof shall in all respects govern the creation, perfection,
priority, and enforcement of any lien created hereby or hereunder.
SEC. 7. Section 80200 of the Water Code is amended to read:
80200. (a) There is hereby established in the State Treasury the
Department of Water Resources Electric Power Fund. Notwithstanding
Section 13340 of the Government Code, all moneys in the fund are
continuously appropriated, without regard to fiscal year, to the
department, and shall be available for the purposes of this division.
It is the intent of the Legislature that this fund be a
continuation of the fund created in Chapter 3 of the Statutes of 2001
(SB 7 of the First 2001-02 Extraordinary Session).
(b) All revenues payable to the department under this division
shall be deposited in the fund. Notwithstanding any other provision
of law, interest accruing on money in the fund shall remain in the
fund and shall be used for the purposes of this division. Payments
from the fund may be made only for the purposes authorized by this
division, including, but not limited to, payments for any of the
following:
(1) The cost of electric power and transmission, scheduling, and
other related expenses incurred by the department.
(2) The pooled money investment rate on funds advanced for
electric power purchases prior to the receipt of payment for those
purchases by the purchasing entity.
(3) Payment of any bonds or other contractual obligations
authorized by this division.
(4) Repayment to the General Fund of appropriations made to the
fund pursuant hereto or hereafter for purposes of this division,
appropriations made to the Department of Water Resources Electric
Power Fund, and General Fund moneys expended by the department
pursuant to the Governor's Emergency Proclamation dated January 17,
2001. That repayment shall be made as soon as practicable.
(c) Except as provided in subdivision (b) of Section 5 of the
statute adding this section, the administrative costs of the
department incurred in administering this division shall be provided
in the annual Budget Act.
(d) Obligations authorized by this division shall be payable
solely from the fund. Neither the full faith and credit nor the
taxing power of the state are or may be pledged for any payment under
any obligation authorized by this division.
(e) While any obligations of the department incurred under this
division remain outstanding and not fully performed or discharged,
the rights, powers, duties, and existence of the department and the
commission shall not be diminished or impaired in any manner that
will affect adversely the interests and rights of the holders of or
parties to such obligations. The department may include this pledge
and undertaking of the state in the department's obligations.
SEC. 8. Section 6 of Chapter 4 of the Statutes of 2001, First
Extraordinary Session, is amended to read:
Sec. 6. (a) The Department of Finance may authorize the creation
of deficiencies for the appropriation made by Section 5 of Chapter 4
of the Statutes of 2001, which added this section. No deficiency may
be approved under this section any sooner than 10 days after written
notification of the proposed deficiency is given to the Chairperson
of the Joint Legislative Budget Committee and the chairperson of the
committee in each house that considers appropriations. After November
15, 2001, such deficiency shall be limited to amounts required for
short-term cash flow purposes of no more than five hundred million
dollars ($500,000,000) in the aggregate and shall be repaid from the
Department of Water Resources Electric Power Fund within 180 days.
The Director of Finance shall certify to the Joint Legislative Budget
Committee and the Appropriations Committees as to the need for a
short-term cash flow loan not less than 10 days prior to the written
notification.
(b) This section shall be repealed as of January 1, 2003, unless a
later enacted statute that is enacted before January 1, 2003,
deletes or extends the date on which it is repealed.
SEC. 9. The provisions of Division 27 (commencing with Section
80000) of the Water Code, including amendments made thereto in this
act, and the provisions of Section 360.5 of the Public Utilities
Code, are severable. If any provision of Division 27 (commencing with
Section 80000) of the Water Code, including amendments made thereto
in this act, or the provisions of Section 360.5 of the Public
Utilities Code or application thereof, are held to be invalid, such
invalidity shall not affect other provisions of either Division 27
(commencing with Section 80000) of the Water Code or the provisions
of Section 360.5.
SEC. 10. No revenues of the Department of Water Resources Electric
Power Fund established pursuant to Section 80200 of the Water Code
may be used to pay for any undercollected amount due to any
electrical corporation or to any entity to which the amount has been
assigned.
SEC. 11. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
To help avoid rolling blackouts in California, it is necessary
that this act take effect immediately.