BILL NUMBER: AB 1383 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 2, 2005
AMENDED IN SENATE JULY 13, 2005
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 add and repeal Chapter 5.6 (commencing with Section
25460) of Division 15 of the Public Resources Code, relating to
energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1383, as amended, Pavley Electricity: Solar Energy
energy : Low-Income Housing Development
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
moneys 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.
Existing law required the PUC, in consultation with the
Independent System Operator and the energy commission, to adopt
initiatives, on or before March 7, 2001, to reduce demand for
electricity and reduce load during peak demand periods, including
differential incentives for renewable or superclean distributed
generation resources. Pursuant to this requirement, the PUC
established a program incentive for demand-responsiveness and
self-generation. Existing law requires the PUC, in consultation with
the energy commission, to administer, until January 1, 2008, a
self-generation incentive program for distributed generation
resources in the same form that existed on January 1, 2004.
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 Low-Income
Housing Development Revolving Loan Program Fund (fund), and would
require the moneys in the fund to be annually appropriated by the
Legislature, and used for the purpose of providing loans for program
purposes.
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 for each fiscal 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 require the Energy Commission to establish and
collect a fee for each application for an allocation. The bill would
require the commission to deposit the fees in the Low-Income Housing
Development Application Fee Account, which the bill would create in
the fund, and would authorize the Energy Commission to expend the
revenues in the account, upon appropriation by the Legislature, to
process applications.
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.
The bill would require the commission, by October 31, 2007, and by
October 31 annually thereafter, to submit a report to the chairs of
the legislative fiscal committees on the portfolio of loans issued
pursuant to the program during the previous fiscal year, including
the condition of the fund, and on the anticipated demand for the load
funds for the following fiscal year. The bill would also require the
commission, by January 1, 2006, and annually thereafter, to submit a
report to the chairs of the legislative fiscal committees on the
estimated amounts needed to be transferred to the fund from various
specified sources, upon appropriation by the Legislature.
Vote: majority. Appropriation: no. 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 costs
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)
(d) "Fund" means the Low-Income Housing
Development Revolving Loan Program Fund created by Section 25461.
(g)
(e) "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)
(f) "Program" means the Low-Income Housing
Development Revolving Loan Program created by Section 25460.5.
(i)
(g) "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
(a) To provide low cost financing for
up to 50,000 solar energy systems , 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.
contributing funds to support the Low-Income Housing Development
Revolving Loan Program.
(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 and, upon annual
appropriation by the Legislature, shall be used for the
purpose of providing loans for purposes of the program.
shall be used for allocation by the commission. The fund shall
be capitalized by transfers from the Emerging Renewable Resources
Account established pursuant to paragraph (3) of subdivision (b) of
Section 25751 and from the self-generation incentive program for
distributed generation resources originally established pursuant to
Chapter 329 of the Statutes of 2000, or from the Million Solar Roofs
Initiative Trust Fund established pursuant to Senate Bill
1 of the 2005 - 06 Regular Session, if Senate
Bill 1 is enacted. The amounts for the transfer shall be identified
in the report required by subdivision (b) of Section 25461.5.
(b) On or before October 31, 2007, and on or before October 31
annually thereafter, the commission shall submit a report to the
chairs of the legislative fiscal committees on the portfolio of loans
issued pursuant to this chapter during the previous fiscal year. The
report shall include, but not be limited to, all of the following:
(1) The total amount of outstanding loans.
(2) The total amount of outstanding principal and interest.
(3) The total amount of late payments and defaults.
(4) The interest rates charged on the loans.
(c) On or before October 31, 2007, and on or before October 31
annually thereafter, the commission shall submit a report to the
chairs of the legislative fiscal committees on the condition of the
revolving fund, including an estimate of anticipated demand for loan
funds for the next fiscal year. The commission's report shall measure
the program's effectiveness by including, but not be limited to, all
of the following information:
(1) The total annual kilowatts generated by solar energy system.
(2) The annual financial savings to low-income households
generated by solar energy system.
(3) An analysis of how systems funded by the program are being
financed, including any other grants, loans, rebates, incentives, tax
incentives, or tax subsidies being used by the developer or
applicant.
(d) On or before October 31, 2007, the commission shall submit a
report to the chairs of the legislative fiscal committees on how it
intends to implement the sunset provision in subdivision (a) of
Section 25466.5.
(b)
(c) 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) subdivision (e) of
Section 25462.5, or Section 25463.5 or 25464.
(c)
(d) The commission shall administer the fund.
(d)
(e) 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)
(f) The commission may expend the moneys in the fund to
make loans to local governing bodies, private businesses,
and nonprofit entities nonprofit development
corporations to provide funding for solar energy systems in
low-income housing units.
(f) The moneys 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)
(g) The commission may make grants
loa ns for innovative projects and
programs. The amount expended for grants
these loans may not exceed 5 percent of the annual
appropriation from the account fund .
25461.5. (a) During each fiscal year, 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 for the
following fiscal year.
(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 of the fiscal year for
which the determination in subdivision (a) is made.
(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 of the fiscal year for
which the determination in subdivision (a) is made.
(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.
(b) On or before January 10, 2006, and annually thereafter, the
commission shall submit a report to the chairs of the legislative
fiscal committees including an estimate of the following amounts:
(1) For the fiscal year starting on the following July 1, an
amount equal to the lower of the following:
(A) Twenty-five 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.
(B) Five percent of the total amount of the funds in the account.
(2) For the fiscal year starting on the following July 1, an
amount equal to the lower of the following:
(A) Twenty-five 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.
(B) Five percent of the total funds in the self-generation
incentive program for distributed generation resources.
(3) For the fiscal year starting on the following July 1, an
amount equal to 5 percent of the total for the Million Solar Roofs
Initiative Trust Fund established pursuant to Senate Bill 1 of the
2005-06 Regular Session.
(c) Paragraphs (1) and (2) of subdivision (b) shall be inoperative
if Senate Bill 1 of the 2005-06 Regular Session is enacted and
becomes effective on or before January 1, 2006. Paragraph (3) of
subdivision (b) 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 residential 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 a rate of 0.25 percent lower
than the lowest applicable interest rate available to the commission
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 up to 75 percent of the costs
incurred in implementing an energy conservation project
a solar energy system . 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 a solar energy system that
are to be jointly funded through a state, local, or federal-local
program.
(c) An applicant shall not receive loans from the revolving fund
in excess of 75 percent of the total cost of the solar energy system.
The commission shall ensure that the amount of the loan from the
revolving fund, when combined with all other grants, loans, rebates,
tax subsidies, tax incentives or any other source of funding or
incentive provided the applicant, does not exceed 75 percent of the
total actual cost of the solar energy system.
(c)
(d) 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
solar energy system , 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)
(e) (1) 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. commission for the
cost of the entire application process.
(2) The commission shall deposit the fees received pursuant to
this subdivision in the Low-Income Housing Development Application
Fee Account, which is hereby created in the fund. The commission may
expend the revenues in the Low-Income Housing Development Application
Fee Account, upon appropriation by the Legislature, to process
applications pursuant to this chapter.
(f) For purposes of this Section, the commission shall define the
term "applicant" by regulation.
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 and report to the
commission the cost of the energy saved as a result of
implementing the energy conservation project
solar energy system 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
solar energy system 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 solar energy
system 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 the
lowest applicable interest rate available to the commission 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) The commission may establish qualifications and priorities,
consistent with the objectives of this chapter, for making
allocations.
(f) The commission may 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 to the commission 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. Text - Pages 2, 7, 8, and 10.
____
CORRECTIONS Text - Pages 2, 7, 8, and 10.
____