BILL NUMBER: AB 1383 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 22, 2005
AMENDED IN ASSEMBLY MAY 27, 2005
AMENDED IN ASSEMBLY MAY 16, 2005
AMENDED IN ASSEMBLY MAY 2, 2005
AMENDED IN ASSEMBLY APRIL 18, 2005
AMENDED IN ASSEMBLY APRIL 6, 2005
INTRODUCED BY Assembly Member Pavley
(Coauthors: Assembly Members Hancock, Jerome Horton, Leno,
Levine, Mullin, Salinas, and Torrico)
FEBRUARY 22, 2005
An act to amend Section 25401.6 of the Public Resources
Code, relating to energy. An act to add and repeal
Chapter 5.6 (commencing with Section 25460) of Division 15 of the
Public Resources Code, relating to energy, and making an
appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 1383, as amended, Pavley. Electricity: distributed
emerging technologies: rebates. Solar Energy:
Low-Income Housing Devel opment Revolving Loan Program.
Existing law establishes various revolving loan programs to
provide loans for specified purposes, including recycling market
development and renewable energy resources. Existing law requires the
State Energy Resources Conservation and Development Commission
(Energy Commission) to expand and accelerate the development of
alternative sources of energy, including solar energy. Existing law
requires the Energy Commission, until January 1, 2006, and to the
extent that funds are appropriated for that purpose in the annual
Budget Act, to implement a grant program to accomplish specified
goals, including making solar energy systems cost competitive with
alternative forms of energy.
Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations. Existing law requires the PUC to require Pacific Gas
and Electric Company, San Diego Gas and Electric, and Southern
California Edison to identify a separate electrical rate component to
fund programs that enhance system reliability and provide in-state
benefits. This rate component is a nonbypassable element of local
distribution and collected on the basis of usage. The funds are
collected to support cost-effective energy efficiency and
conservation activities, public interest research and development not
adequately provided by competitive and regulated markets, and
renewable energy sources. Existing law requires that 17.5% of the
money collected under the renewable energy public goods charge be
used for a multiyear, consumer-based program to foster the
development of emerging renewable technologies in distributed
generation application.
This bill would establish, until January 1, 2016, the Low-Income
Housing Development Revolving Loan Program (program) to help finance
solar energy systems, as defined, in eligible low-income housing
located in the service areas of an electrical corporation. The bill
would create the Low-income Housing Development Revolving Loan
Program Fund (fund), which would be continuously appropriated, for
the purpose of providing loans for program purposes, thereby making
an appropriation.
The bill would require the Energy Commission to consider and
evaluate the level of funding necessary to adequately fund the
program to achieve the goal of placing solar energy systems on
low-income or affordable housing units during the first year of the
program. The bill would provide that a certain amount of moneys from
the Emerging Renewable Resources Account and the self-generation
incentive program for distributed generation resources would be
transferred to the fund.
The bill would prescribe requirements for repayment of allocations
made pursuant to the program and would authorize the Department of
Finance to audit the expenditure of an allocation or the computation
of specified payments.
Existing law requires the State Energy Resources Conservation and
Development Commission (Energy Commission) to transfer funds
collected for in-state operation and development of existing and new
and emerging renewable resources technologies into the Renewable
Resource Trust Fund. Existing law requires that 17.5% of the funds
collected to accomplish the funding of in-state operation and
development of existing, new, and emerging renewable resources
technologies be used for a multiyear, consumer-based program to
foster the development of emerging renewable technologies in
distributed generation applications by providing monetary rebates,
buydowns, or equivalent incentives. Existing law requires the Energy
Commission to establish a separate rebate for eligible distributed
emerging technologies for affordable housing projects, and authorizes
the Energy Commission to adjust the amount of the rebate based on
the capacity of the system, if the commission determines the
occupants should have individual meters, but allows the system to
receive a rebate of the total installed costs.
This bill would instead authorize the commission to adjust the
amount of the rebate based on the capacity of the system and the
anticipated rebate funding level to stimulate increased participation
from affordable housing projects.
Existing law authorizes the commission to establish a reasonable
limit on the total amount of funds dedicated for these purposes.
This bill would instead authorize the commission to establish a
reasonable minimum funding level or limit.
Vote: majority 2/3 . Appropriation:
no yes . Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1.
The Legislature finds and declares all of the following:
(a) California has a pressing need to procure a steady supply of
affordable and reliable peak electricity for affordable housing
units.
(b) Solar generated electricity is uniquely suited to California's
needs because it produces electricity when California needs it most,
during the peak demand hours in summer afternoons when the sun is
brightest and air conditioners are running at capacity.
(c) Procuring solar electric generation capacity to meet peak
electricity demand increases system reliability and decreases
California's dependence on unstable fossil fuel supplies.
(d) Solar generated electricity diversifies California's energy
portfolio. California currently relies on natural gas for the bulk of
its electricity generation needs. Increasing energy demands place
increasing pressure on limited natural gas supplies and threaten to
raise costs.
(e) Roughly 20,000 affordable housing units will be built annually
in California in the coming years, challenging energy reliability
and affordability for those residents who can least afford inflated
energy bills.
(f) Investing in low-income housing solar electricity generation
installations today will lower the cost of solar generated
electricity for all Californians in the future.
(g) Increasing California's solar electricity generation market
will also bring additional manufacturing, installation, and sales
jobs to the state at a higher rate than most conventional energy
production sources.
(h) Establishing a Low-Income Housing Development Revolving Loan
Program would be a cost-effective investment by ratepayers in peak
electricity generation capacity, because as a result of the program
ratepayers will recoup the cost of their investment through lower
rates by avoiding purchases of electricity at peak rates, with
additional system reliability and pollution reduction benefits.
(i) A loan program would further establish, increase, and modify
incentives and provide financing mechanisms for energy efficiency and
photovoltaic capabilities for subsidized and affordable housing, and
establish "zero energy homes" as a goal for low-income and
affordable housing residents.
(j) Solar energy systems provide substantial energy reliability
and pollution reduction benefits. Solar energy systems also diversify
our energy supply and thereby reduce our dependence on imported
fossil fuels.
SEC. 2. Chapter 5.6 (commencing with Section
25460) is added to Division 15 of the Public Resources
Code , to read:
CHAPTER 5.6. LOW-INCOME HOUSING DEVELOPMENT REVOLVING LOAN
PROGRAM
25460.
As used in this chapter, the following terms have the following
meanings:
(a) "Allocation" means a loan of funds by the commission pursuant
to this chapter.
(b) "Building" means any existing or planned structure for
residential uses that includes a heating or cooling system, or both.
Additions to an original building shall be considered part of that
building rather than a separate building.
(c) "Electrical corporation" has the meaning set forth in Section
218 of the Public Utilities Code.
(d) "Energy conservation measure" means an installation or
modification of an installation of a solar energy system in a
building or a housing unit that is primarily intended to reduce
energy consumption.
(e) "Energy conservation project" means an undertaking to acquire
and to install one or more energy conservation measures in a building
or a housing unit, and technical assistance in connection with that
undertaking.
(f) "Fund" means the Low-Income Housing Development Revolving Loan
Program Fund created by Section 25461.
(g) "Low-income residential housing" means affordable residential
housing units that are defined in Section 50052.5 or 50053 of, or are
undertaken, constructed, or operated pursuant to Chapter 3.6
(commencing with Section 50199.4) of Part 1 of Division 31 of, the
Health and Safety Code.
(h) "Program" means the Low-Income Housing Development Revolving
Loan Program created by Section 25460.5.
(i) "Solar energy system" means a solar energy device that has the
primary purpose of providing for the collection and distribution of
solar energy for the generation of electricity that is qualified by
the commission for participation in the program.
(j) "Technical assistance" means assistance including, but not
limited to:
(1) Conducting specialized studies identifying and specifying
energy savings and related cost savings that are likely to be
realized as a result of the acquisition and installation of one or
more specified energy conservation measures in the building or
facility, or as a result of both.
(2) Planning of specific remodeling, renovation, repair,
replacement, or insulation projects related to the installation of
energy conservation measures in the building or housing unit.
25460.5.
The Low-Income Housing Development Revolving Loan Program is
hereby established. The purposes of the program are as follows:
(a) To provide a source of funding to help finance energy
conservation projects, not to exceed 75 percent of the total costs of
the solar energy systems, in low-income residential housing units
located in the service areas of an electrical corporation that are
not already covered by the rebate program established pursuant to
Section 25401.6.
(b) To be a cost-effective investment by ratepayers in peak
electricity generation capacity that enables ratepayers to recoup the
cost of their investment through lower rates as a result of avoiding
purchases of electricity at peak rates generated by traditional
powerplants and peaker generation units, with additional system
reliability and pollution reduction benefits.
25461.
(a) The Low-Income Housing Development Revolving Loan Program Fund
is hereby created in the State Treasury for the purpose of providing
loans for purposes of the program. Notwithstanding Section 13340 of
the Government Code, the fund is continuously appropriated to the
commission without regard to fiscal year.
(b) The moneys in the fund shall consist of both of the following:
(1) Moneys from sources set forth in Section 25461.5 or 25461.7,
as appropriate.
(2) Moneys authorized by or required to be deposited in the fund
by the Legislature and moneys received by the commission pursuant to
subdivision (d) of Section 25462.5, or Section 25463.5 or 25464.
(c) The commission shall administer the fund.
(d) The commission shall consult with the California Tax Credit
Allocation Committee (TCAC), the California Housing Finance Agency,
and the Department of Housing and Community Development to develop
guidelines for the fund.
(e) The commission may expend the money in the fund to make loans
to local governing bodies, private businesses, and nonprofit entities
to provide funding for solar energy systems in low-income housing
units.
(f) The money in the fund shall be disbursed by the Controller for
the purposes of this chapter as authorized by the commission.
(g) The commission may contract and provide grants for services to
be performed for energy conservation projects meeting the
requirements of Section 25462. Services may include, but are not
limited to, feasibility analysis, project design, field assistance,
technical assistance, operation, and training. The amount expended
for those services may not exceed 10 percent of the balance of the
fund as determined by the commission on July 1 of each year.
(h) The commission may make grants for innovative projects and
programs. The amount expended for grants may not exceed 5 percent of
the annual appropriation from the account.
25461.5.
(a) The commission shall consider and evaluate the level of
funding that is necessary to adequately fund the program to achieve
the goal of placing solar energy systems on low-income or affordable
housing units during the first year of the program.
(b) (1) The commission shall transfer 50 percent of the amount
identified pursuant to subdivision (a) from the Emerging Renewable
Resources Account established pursuant to paragraph (3) of
subdivision (b) of Section 25751.
(2) The amount transferred shall not exceed 10 percent of the
overall funds in the account as of July 1, 2005.
(c) (1) The Public Utilities Commission shall transfer 50 percent
of the amount identified pursuant to subdivision (a) from the
self-generation incentive program for distributed generation
resources originally established pursuant to Chapter 329 of the
Statutes of 2000.
(2) The amount transferred shall not exceed 10 percent of the
overall funds in the self-generation incentive program for
distributed generation resources as of July 1, 2005.
(d) This section shall not be operative if Senate Bill 1 of the
2005-06 Regular Session is enacted and becomes effective on or before
January 1, 2006.
25461.7.
(a) Notwithstanding subdivision (f) of Section 25782, as added to
the Public Resources Code by Senate Bill 1 of the 2005-06 Regular
Session, the commission shall provide proportional program support,
not to exceed 10 percent of the overall funds for the Million Solar
Roofs Initiative, for the implementation of this chapter.
(b) This section shall become operative if Senate Bill 1 of the
2005-06 Regular Session is enacted and becomes effective on or before
January 1, 2006.
25462.
(a) To be eligible for participation in the program, a building or
housing unit shall satisfy all of the following:
(1) Be low-income housing.
(2) Be within the service area of an electrical corporation.
(3) Be at least 10 percent more energy efficient than required by
the current standards specified in the California Building Standards
Code contained in Part 6 (commencing with Section 100) of Title 24 of
the California Code of Regulations, or have implemented measures to
reduce the energy use of the building or housing unit by 10 percent,
as calculated pursuant to compliance models set forth in Part 6
(commencing with Section 100) of Title 24 of the California Code of
Regulations.
(b) An eligible building or housing unit that exceeds energy
efficiency standards required by Part 6 (commencing with Section 100)
of Title 24 of the California Code of Regulations by more than 10
percent shall receive financing at rate of .25 percent lower for
every 5 percent additional improvement in energy efficiency.
25462.5.
(a) An applicant may submit an application to the commission for
an allocation for the purpose of financing all or a portion of the
costs incurred in implementing an energy conservation project. The
application shall be in the form and contain the information that the
commission shall prescribe.
(b) An application may be for the purpose of financing the
applicant's share of the costs for implementing an energy
conservation project that are to be jointly funded through a state,
local, or federal-local program.
(c) The commission may approve an application if the applicant has
furnished information satisfactory to the commission showing both of
the following:
(1) That the building or housing is eligible pursuant to Section
25462.
(2) That the costs of the energy conservation project, plus
interest on state funds loaned, calculated in accordance with
Sections 25463 and 25463.5, will be covered by the savings in the
cost of energy during the repayment period of the allocation. The
savings shall be calculated in a manner prescribed by the commission.
(d) The commission shall establish and collect a fee for each
application for an allocation authorized by this chapter. The fee
shall be set at a level that is sufficient to reimburse the
commission for the cost of processing the application. In addition,
the agency shall establish a schedule of fees, or points, for
allocations that are entered into by the commission, to fund the
commission's administration of the program.
25463.
Annually at the conclusion of each fiscal year, but not later than
October 31, each applicant that has received an allocation pursuant
to this chapter shall compute the cost of the energy saved as a
result of implementing the energy conservation project funded by the
allocation. The cost shall be calculated in a manner prescribed by
the commission.
25463.5.
(a) An applicant receiving an allocation pursuant to this chapter
shall repay the principal amount of the allocation, plus interest, in
not more than 30 equal semiannual payments, as determined by the
commission. The first semiannual payment shall be made on or before
December 22 of the fiscal year following the year in which the energy
conservation project is completed. The repayment period may not
exceed the life of the equipment, as determined by the commission, or
the time period in which the building or housing unit where the
energy conservation measures will be installed maintain its
low-income housing status.
(b) Notwithstanding any other provision of law, the commission
shall, unless it determines that the purposes of this chapter would
be better served by establishing an alternative interest rate
schedule, periodically set interest rates on the loans based on
surveys of existing financial markets and at rates not less than 3
percent per annum.
(c) The applicant receiving an allocation pursuant to this chapter
shall annually budget an amount at least sufficient to make the
semiannual payments required in this section. The amount shall not be
raised by the levy of additional taxes but shall instead be obtained
by a savings in energy costs or other sources.
25464.
All interest accruing on interest payments from a housing project
shall be deposited in the fund.
25464.5.
(a) An allocation made pursuant to this chapter shall be used for
the purposes specified in an approved application.
(b) If the commission determines that an allocation has been
expended for purposes other than those specified in an approved
application, it shall immediately request the return of the full
amount of the allocation. The applicant shall immediately comply with
that request.
25465.
(a) In furtherance of the purposes of the commission as set forth
in this chapter, the commission may do all of the following:
(1) Borrow money, for the purpose of obtaining funds to make loans
pursuant to this chapter, from the California Economic Development
Financing Authority, the California Infrastructure and Economic
Development Bank, and the California Consumer Power and Conservation
Financing Authority from the proceeds of revenue bonds issued by any
of those agencies.
(2) Pledge, to provide collateral in connection with the borrowing
of money pursuant to paragraph (1), loans made pursuant to this
chapter or Chapter 5.4 (commencing with Section 25440), or the
principal and interest payments on loans made pursuant to this
chapter or Chapter 5.4 (commencing with Section 25440).
(3) Sell loans made pursuant to this chapter or Chapter 5.4
(commencing with Section 25440), at prices determined in the sole
discretion of the commission, to the California Economic Development
Financing Authority, the California Infrastructure and Economic
Development Bank, and the California Consumer Power and Conservation
Financing Authority to raise funds to enable the commission to make
loans to eligible institutions.
(4) Enter into loan agreements or other contracts necessary or
appropriate in connection with the pledge or sale of loans pursuant
to paragraph (2) or (3), or the borrowing of money as provided in
paragraph (1), containing any provisions that may be required by the
California Economic Development Financing Authority, the California
Infrastructure and Economic Development Bank, or the California
Consumer Power and Conservation Financing Authority as conditions of
issuing bonds to fund loans to, or the purchase of loans from, the
commission.
(b) In connection with the pledging of loans, or of the principal
and interest payment on loans, pursuant to paragraph (2) of
subdivision (a), the commission may enter into pledge agreements
setting forth the terms and conditions pursuant to which the
commission is pledging loans or the principal and interest payment on
loans, and may also agree to have the loans held by bond trustees or
by independent collateral or escrow agents and to direct that
payments received on those loans be paid to those trustee,
collateral, or escrow agents.
(c) The commission may employ financial consultants, legal
advisers, accountants, and other service providers, as may be
necessary in its judgment, in connection with activities pursuant to
this chapter.
(d) Notwithstanding any other provision of law, this chapter
provides a complete, separate, additional, and alternative method for
implementing the measures authorized by this chapter, including the
authority of the applicant to have borrowed and to borrow in the
future pursuant to loans made pursuant to this chapter or Chapter 5.4
(commencing with Section 25440), and is supplemental and additional
to powers conferred by other laws.
(e) To establish qualifications and priorities, consistent with
the objectives of this chapter, for making allocations.
(f) To establish procedures and policies that may be necessary for
the administration of this chapter.
25465.5.
The commission may expend from the fund an amount to pay for the
actual administrative costs incurred by the commission pursuant to
this chapter. That amount shall not exceed 5 percent of the total
appropriation, to be held in reserve and used to defray costs
incurred by the commission for allocations made by the commission
pursuant to this chapter.
25466.
The Department of Finance, at its discretion, may audit the
expenditure of any allocation made pursuant to this chapter or the
computation of any payment made pursuant to Section 25463.5.
25466.5.
(a) Except as provided in subdivision (b), this chapter shall
remain in effect only until January 1, 2016, and as of that date is
repealed, unless a later enacted statute, which is enacted before
January 1, 2016, deletes or extends that date.
(b) All loans outstanding as of January 1, 2016, shall continue to
be repaid on a semiannual basis, as specified in Section 25463.5,
until paid in full. All unexpended moneys in the fund on January 1,
2016, and thereafter, except to the extent those funds are encumbered
pursuant to this chapter, shall revert to the General Fund.
SECTION 1. Section 25401.6 of the Public Resources Code is amended
to read:
25401.6.
(a) In its administration of Section 25744, the commission shall
establish a separate rebate for eligible distributed emerging
technologies for affordable housing projects including, but not
limited to, projects undertaken pursuant to Section 50052.5, 50053,
or 50199.4 of the Health and Safety Code. In establishing the rebate,
where the commission determines that the occupants of the housing
shall have individual meters, the commission may adjust the amount of
the rebate, based on the capacity of the system and the anticipated
rebate funding level, to stimulate increased participation from
affordable housing projects, provided that the rebate does not exceed
the total installed cost. The commission may establish a reasonable
minimum funding level or limit on the total amount of funds dedicated
for purposes of this section.
(b) It is the intent of the Legislature that this section fulfills
the purpose of paragraph (5) of subdivision (b) of Section 25744.