BILL NUMBER: AB 1383 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 8, 2005
PASSED THE ASSEMBLY SEPTEMBER 8, 2005
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, Pavley Electricity: Solar 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 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 Energy 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 Energy 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.
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 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) "Fund" means the Low-Income Housing Development Revolving Loan
Program Fund created by Section 25461.
(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.
(f) "Program" means the Low-Income Housing Development Revolving
Loan Program created by Section 25460.5.
(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.
25460.5. The Low-Income Housing Development Revolving Loan
Program is hereby established. The purposes of the program are as
follows:
(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 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 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.
(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 (e) of Section 25462.5, or Section 25463.5 or 25464.
(d) The commission shall administer the fund.
(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.
(f) The commission may expend the moneys in the fund to make loans
to nonprofit development corporations to provide funding for solar
energy systems in low-income housing units.
(g) The commission may make loans for innovative projects and
programs. The amount expended for these loans may not exceed 5
percent of the annual appropriation from the 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) 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 up to 75
percent of the costs incurred in implementing 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 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.
(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 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.
(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 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 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 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 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 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.
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.