BILL NUMBER: AB 1663 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Utilities and Commerce (Wright (Chair),
Pescetti (Vice Chair), Calderon, Campbell, Frusetta, Mazzoni, Reyes,
Vincent, and Wesson)
MARCH 11, 1999
An act to amend Sections 25410.5, 25410.6, 25411, 25413, 25415,
25416, 25417.5, 25419, 25421, 25441, 25442, 25442.7, 25443.5, 25445,
25449.1, 25449.3, 25449.4, and to repeal Sections 25412.5, 25441.5,
25442.5, 25446, and 25447.2 of the Public Resources Code, relating to
energy conservation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1663, as introduced, Committee on Utilities and Commerce.
Energy conservation assistance: loans and grants.
(1) Existing law, the Energy Conservation Assistance Act of 1979,
creates the State Energy Conservation Assistance Account in the
General Fund to provide grants and loans to eligible institutions, as
defined, until January 1, 2001, for specified purposes relating to
energy conservation assistance. The act authorizes the State Energy
Resources Conservation and Development Commission to make loans to
local governments owning, or leasing from entities other than
privately owned electrical utilities, street lighting systems for
purposes of converting those systems to improve energy efficiency.
This bill would delete those provisions.
The act authorizes the commission to contract for specified
services to be performed for eligible institutions with respect to
energy conservation assistance.
(2) The act requires the commission to provide loans to local
jurisdictions for the purchase, maintenance, and evaluation of
specified energy efficient equipment, small power production systems,
and local transportation systems.
This bill would, instead, require the commission to provide loans
to local jurisdictions for the purposes of financing energy audits,
feasibility studies, financial analyses, energy conservation measures
and projects, engineering and design, legal and technical
assistance, and for improving the operating efficiency of local
transportation systems. The bill would also make various changes
with respect to the terms and conditions for the repayment of energy
assistance loans and the criteria for funding grants and loans, and
would revise certain of the commission's powers with respect to the
administration of provisions of the act.
(3) This bill would extend to January 1, 2011, the termination
date of the above provisions.
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. Section 25410.5 of the Public Resources Code is amended
to read:
25410.5. The Legislature finds and declares all of the following:
(a) Energy costs are frequently the second largest discretionary
expense in a local government's budget. According to the
commission, most public institutions could reduce their energy costs
by 20 to 30 percent.
(b) A variety of energy conservation measures are available to
local governments. These measures are highly cost-effective, often
providing a payback on the initial investment in three years or less.
(c) Many local governments lack energy management expertise and
are often unaware of their high energy costs or the opportunities to
reduce those costs.
(d) Local governments that desire to reduce their energy costs
through energy conservation and efficiency measures often lack
available funding.
(e) Since 1980, the Energy Conservation Assistance Account has
provided $43.7 $60 million in loans,
through a revolving loan account, to 323 510
schools, hospitals, and local governments. The energy
conservation projects funded by the account save approximately $20
million annually in energy costs.
(f) Local governments and public institutions need assistance in
all aspects of energy efficiency improvements, including , but
not limited to, project identification, project development and
implementation, evaluation of project proposals and options,
operations and maintenance training , and
troubleshooting of problem projects .
SEC. 2. Section 25410.6 of the Public Resources Code is amended to
read:
25410.6. (a) It is the intent of the Legislature that the
commission shall administer the State Energy Conservation Assistance
Account to provide grants and loans to local governments and public
institutions to maximize energy use savings, including, but not
limited to, technical assistance, demonstrations, and identification
and implementation of cost-effective energy efficiency measures and
programs.
(b) It is further the intent of the Legislature that the
commission seek the assistance of utility companies
others in providing energy audits for local
governments and public institutions and in publicizing the
availability of State Energy Conservation Assistance Account funds to
qualified entities.
SEC. 3. Section 25411 of the Public Resources Code is amended to
read:
25411. As used in this chapter:
(a) "Allocation" means a loan of funds by the commission pursuant
to the procedures specified in this chapter.
(b) "Building" means any occupied structure which 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) "Eligible institution" means a school, hospital, public care
institution, or a unit of local government.
(d) "Energy audit" means a determination of the energy consumption
characteristics of a building or facility which
that does all of the following:
(1) Identifies the type, size, and energy use level of such
building or facility and the major energy using systems of such
building or facility.
(2) Determines appropriate energy conservation maintenance and
operating procedures.
(3) Indicates the need, if any, for the acquisition and
installation of energy conservation measures.
(e) "Energy conservation maintenance and operating procedure"
means a modification or modifications in the maintenance and
operations of a building or facility, and any installations therein
(based on the use time schedule of the building or facility), which
are designed to reduce energy consumption in such building or
facility and which require no significant expenditure of funds.
(f) "Energy conservation measure" means an installation or
modification of an installation in a building or facility
which that is primarily intended to reduce
energy consumption or allow the use of a more desirable energy
source.
(g) "Energy conservation project" means an undertaking to acquire
and to install one or more energy conservation measures in a building
or facility, and technical assistance in connection with any such
undertaking.
(h) "Facility" means any major energy using system of an eligible
institution whether or not housed in a building.
(i) "Hospital" means a public or nonprofit institution which is
both of the following :
(1) A general hospital, tuberculosis hospital, or any other type
of hospital, other than a hospital furnishing primarily domiciliary
care ; and .
(2) Duly authorized to provide hospital services under the laws of
this state.
(j) "Hospital building" means a building housing a hospital and
related operations, including laboratories, laundries, outpatient
departments, nurses' home and training activities, and central
service operations in connection with a hospital, and also includes a
building housing education or training activities for health
professions personnel operated as an integral part of a hospital.
(k) "Local government building" means a building which
that is owned and primarily
occupied by offices or agencies of a unit of local government or by a
public care institution and shall not include any building
intended for seasonal use or any building used primarily by a school
or hospital .
(l) "Project" means a purpose for which an allocation may be
requested and made under this chapter. Such
Those purposes shall include energy audits, energy conservation
and operating procedures, energy conservation measures, energy
conservation projects, and technical assistance programs.
(m) "Public care institution" means a public or nonprofit
institution which owns that is any of the
following :
(1) A long-term care institution.
(2) A rehabilitation institution.
(3) An institution for the provision of public health services,
including related publicly owned services such as laboratories,
clinics, and administrative offices operated in connection with such
an institution.
(4) A residential child care center.
(n) "Public or nonprofit institution" means an institution owned
and operated by any of the following :
(1) The state, a political subdivision of the state, or an agency
or instrumentality of either.
(2) An organization exempt from income tax under Section 501(c)(3)
of the Internal Revenue Code of 1954.
(3) In the case of public care institutions, an organization also
exempt from income tax under Section 501(c)(4) of the Internal
Revenue Code of 1954.
(o) "School" means a public or nonprofit institution, including a
local educational agency, which does any of the following
:
(1) Provides, and is legally authorized to provide, elementary
education or secondary education, or both, on a day or residential
basis.
(2) Provides, and is legally authorized to provide, a program of
education beyond secondary education, on a day or residential basis
and does all of the following :
(A) Admits as students only persons having a certificate of
graduation from a school providing secondary education, or the
recognized equivalent of such certificate.
(B) Is accredited by a nationally recognized accrediting agency or
association.
(C) Provides an education program for which it awards a bachelor's
degree or higher degree or provides not less than a two-year program
which that is acceptable for full
credit toward such a degree at any institution which meets the
requirements of paragraphs subparagraphs
(A) and (B) and which provides such a program.
(3) Provides not less than a one-year program of training to
prepare students for gainful employment in a recognized occupation
and which meets the provisions requirements
of paragraph (2).
(p) "School building" means a building housing classrooms,
laboratories, dormitories, athletic facilities, or related facilities
operated in connection with a school.
(q) "Technical assistance costs" means costs incurred for the use
of existing personnel or the temporary employment of other qualified
personnel (or both such types of personnel) necessary for providing
technical assistance.
(r) "Technical assistance program" means assistance to schools,
hospitals, local government, and public care institutions
for , and includes, but is 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 either of the following :
(A) Modification of maintenance and operating procedures in a
building or facility, in addition to those modifications implemented
after the preliminary energy audit , or .
(B) Acquisition and installation of one or more specified energy
conservation measures in such 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 such building or facility.
(3) Developing and evaluating alternative project implementation
methods and proposals.
(s) "Unit of local government" means a unit of general purpose
government below the state or a special district.
SEC. 4. Section 25412.5 of the Public Resources Code is repealed.
25412.5. The commission may make loans pursuant to this chapter
to local governments owning, or leasing from entities other than
privately owned electrical utilities, street lighting systems for
purposes of converting the system from incandescent or mercury vapor
lamps to sodium vapor lamps or other lighting system equivalent to a
sodium vapor system in energy efficiency. Only such refitting
programs which convert to sodium vapor lamps or their equivalent in
energy efficiency providing comparable illumination shall be eligible
for such loan program, it being the purpose and intent of this
program to effect the maximum energy savings rather than to increase
the amount of light produced by any street lamp. The commission
shall provide for loan repayment on the basis of life-cycle cost
effectiveness of such conversions in a manner which distinguishes
between savings of electricity purchased from a utility and savings
realized by local governments which operate electrical systems and
thereby furnish electricity for the operation of streetlights.
SEC. 5. Section 25413 of the Public Resources Code is amended to
read:
25413. Applications may be approved by the commission only in
those instances where the eligible institution has furnished
information satisfactory to the commission that the costs of the
project, plus interest on state funds loaned, calculated in
accordance with Section 25415, will be recovered through savings in
the cost of energy to such institution during the repayment period of
the allocation.
The commission shall give priority to applications which, based on
anticipated savings in the cost of energy, will most rapidly recover
the cost of the allocation.
SEC. 6. Section 25415 of the Public Resources Code is amended to
read:
25415. (a) Each eligible institution to which an allocation has
been made under this chapter shall repay the principal amount of the
allocation, plus interest, in not more than 22
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
project is completed. The repayment period shall not exceed the
life of the equipment, as determined by the commission, or the lease
term of the building in which the energy conservation measures will
be installed.
(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 lower than the
Pooled Money Investment Account.
(c) The governing body of each eligible institution 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 services .
SEC. 7. Section 25416 of the Public Resources Code is amended to
read:
25416. (a) The State Energy Conservation Assistance Account is
hereby created in the General Fund. Notwithstanding Section 13340 of
the Government Code, the account is continuously appropriated to the
commission without regard to fiscal year.
(b) The money in the account shall consist of all money authorized
or required to be deposited in the account by the Legislature and
all money received by the commission pursuant to Sections 25414 and
25415.
(c) The money in the account shall be disbursed by the Controller
for the purposes of this chapter as authorized by the commission.
(d) The commission may contract and provide grants for services to
be performed for eligible institutions. Services may include, but
are not limited to, feasibility analysis, project design, field
assistance, and operation and training. The
amount expended for those services shall not exceed 10 percent of the
annual appropriation from the account balance
in the account, as determined by the commission on July 1 of each
year .
(e) The commission may make grants to demonstrate energy
efficiency technologies and market transformation projects
at appropriate locations throughout the state. The amount expended
for grants shall not exceed 5 percent of the annual
appropriation from the account balance in the account,
as determined by the commission on July 1 of each year .
(f) The commission may charge a fee for the services provided
under subdivision (d) , provided that the funds used for the
payment of those services shall have been made available to the
eligible institution as a result of the realization of savings in
energy costs. Those payments and
those fees shall be deposited in the account. If
anticipated savings do not result from the project, the repayment of
fees shall be forgiven.
SEC. 8. Section 25417.5 of the Public Resources Code is amended to
read:
25417.5. (a) In furtherance of the purposes of the commission as
set forth in this chapter, the commission shall
also have the power and authority to may also
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 or the California Infrastructure and Economic
Development Bank, from the proceeds of revenue bonds issued by either
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 or the California Infrastructure and Economic
Development Bank 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 or the California Infrastructure and Economic Development
Bank 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, and 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
the doing of things authorized by this chapter, including the
authority of the eligible institutions or local jurisdictions 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.
SEC. 8.5. Section 25419 of the Public Resources Code is amended to
read:
25419. In addition to the powers specifically granted to the
commission by the other provisions of this chapter, the commission
shall have the following powers:
(a) To establish qualifications and priorities, and
evaluation criteria consistent with the objectives of this
chapter, for making allocations.
(b) To establish such procedures and policies as may be necessary
for the administration of this chapter.
SEC. 9. Section 25421 of the Public Resources Code is amended to
read:
25421. (a) Except as provided in subdivision (b), this chapter
shall remain in effect only until January 1, 2001
2011 , and as of that date is repealed, unless a later
enacted statute, which is enacted before January 1, 2001
2011 , deletes or extends that date.
(b) All loans outstanding as of January 1, 2001
2011 , shall continue to be repaid on a semiannual basis,
as specified in Section 25415, until paid in full. All unexpended
funds in the State Energy Conservation Assistance Account on January
1, 2001 2011 , and thereafter, except
to the extent those funds are encumbered pursuant to Section 25417.5,
shall revert to the General Fund.
SEC. 10. Section 25441 of the Public Resources Code is amended to
read:
25441. The commission shall provide financial assistance to local
jurisdictions for the purpose of providing staff training and
support services, including technical support services, in
the fields of planning, design, permitting, conservation,
comprehensive energy management, and development of energy and energy
resources such as planning, design, permitting,
energy conservation, comprehensive energy management, project
evaluation, and development of alternative energy resources .
SEC. 11. Section 25441.5 of the Public Resources Code is repealed.
25441.5. Financial assistance provided to local jurisdictions
under this article may not exceed 75 percent of the cost of carrying
out the activity, unless the commission determines, by unanimous
vote, that the public interest and objectives of this chapter would
be better served at a higher level of state funding.
SEC. 12. Section 25442 of the Public Resources Code is amended to
read:
25442. The commission shall provide loans to local jurisdictions
for the purposes of financing energy audits, feasibility
studies, energy conservation measures and projects, engineering and
design, legal and financial analyses, and technical assistance as
part of the Technical Assistance Program, as defined by subdivision
(r) of Section 25411, and for improving the operating efficiency of
existing local transportation systems. all of the
following purposes:
(a) Purchase, maintenance, and evaluation of energy efficient
equipment for existing and new facilities, including, but not limited
to, equipment related to lights, motors, pumps, water and wastewater
systems, boilers, heating, and air conditioning.
(b) Purchase, maintenance, and evaluation of small power
production systems, including, but not limited to, wind,
cogeneration, photovoltaics, geothermal, and hydroelectric systems.
(c) Improve the operating efficiency of existing local
transportation systems.
SEC. 13. Section 25442.5 of the Public Resources Code is repealed.
25442.5. The commission may award financial assistance for
project audits, feasibility studies, engineering and design, and
legal and financial analysis related to the purposes of Section
25442.
SEC. 14. Section 25442.7 of the Public Resources Code is amended
to read:
25442.7. (a) Loans under this article may not exceed
one million dollars ($1,000,000) for any one local jurisdiction
and financial assistance under this article may not exceed
75 percent of the project cost , unless the commission
determines, by unanimous vote, that the public interest and
objectives of this chapter would be better served at a higher loan
amount.
Loan
(b) Loan repayments shall be made in
accordance with a schedule established by the commission. Repayment
of loans shall be made in full unless the commission determines, by
unanimous vote, that the public interest and objectives of this
chapter would be better served by negotiating a reduced loan
repayment for a project which failed to meet the technical or
financial performance criteria through no fault of the local
jurisdiction.
SEC. 15. Section 25443.5 of the Public Resources Code is amended
to read:
25443.5. (a) In furtherance of the purposes of the commission as
set forth in this chapter, the commission shall
may also have the power and authority to
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 or the California Infrastructure and Economic
Development Bank, from the proceeds of revenue bonds issued by either
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 5.2 (commencing with Section 25410), or the
principal and interest payments on loans made pursuant to this
chapter or Chapter 5.2 (commencing with Section 25410).
(3) Sell loans made pursuant to this chapter or Chapter 5.2
(commencing with Section 25410), at prices determined in the sole
discretion of the commission, to the California Economic Development
Financing Authority or the California Infrastructure and Economic
Development Bank 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 or the California Infrastructure and Economic Development
Bank 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, and 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
the doing of things authorized by this chapter, including the
authority of the eligible institutions or local jurisdictions to have
borrowed and to borrow in the future pursuant to loans made pursuant
to this chapter or Chapter 5.2 (commencing with Section 25410), and
is supplemental and additional to powers conferred by other laws.
SEC. 16. Section 25445 of the Public Resources Code is amended to
read:
25445. The commission shall design a local jurisdiction energy
assistance program for the purpose of providing financial assistance
under Article 2 (commencing with Section 25441) and providing loans
under Article 3 (commencing with Section 25442) by March 1,
1987, following consideration of recommendations from an advisory
committee appointed by the commission under Section 25447 .
A local jurisdiction's energy assistance program shall be funded
through the commission's existing local government assistance
programs, except that if a project is not eligible for funding under
an existing program, the commission may fund the project under this
chapter.
SEC. 17. Section 25446 of the Public Resources Code is repealed.
25446. Loans made pursuant to this program shall, at a minimum,
be evaluated on all of the following factors:
(a) Project feasibility.
(b) Local jurisdiction financial contribution to project.
(c) Energy savings or energy production potential sufficient to
repay the loan in accordance with Section 25442.
(d) Availability of other federal or state funds.
(e) Potential for project replication in other local
jurisdictions.
(f)
Environmental benefits.
(g) Economic development benefits.
(h) Consistency with California energy policies as reflected in
the commission's biennial report.
SEC. 18. Section 25447.2 of the Public Resources Code is repealed.
25447.2. Members of the advisory committee shall receive no
compensation, but shall be reimbursed for necessary and reasonable
expenses incurred in the performance of their duties.
SEC. 19. Section 25449.1 of the Public Resources Code is amended
to read:
25449.1. (a) The California Energy Extension Service of
the Office of Planning and Research shall enter into an agreement
with the State Department of Education to expend petroleum violation
escrow funds to supplement, and not supplant, other available funds
in order to provide grants to school districts for training and
support services for planning and management of energy conservation
and development projects.
(b) The commission shall enter into an
agreement with the State Department of Education to expend
petroleum violation escrow funds to supplement, and not supplant,
other available funds in order to provide loans to school districts
to purchase, maintain, and evaluate energy efficient equipment and
small power production systems.
SEC. 20. Section 25449.3 of the Public Resources Code is amended
to read:
25449.3. (a) The Local Jurisdiction Energy Assistance Account is
hereby created in the General Fund. All money appropriated for
purposes of this chapter and all money received from local
jurisdictions from loan repayments shall be deposited in the account
and disbursed by the Controller as authorized by the commission.
(b) The commission may charge a fee for the services provided
under this chapter , provided that the funds used for the
payment of those services shall have been made available to the local
jurisdiction as a result of the realization of savings in energy
costs. Those payments shall be deposited in the account. If
anticipated savings do not result from the project, the repayment of
fees shall be forgiven .
(c) The commission may contract for services to be performed by
eligible institutions, as defined in subdivision (c) of Section
25411. Those services shall include, but are not limited to,
performance of a feasibility analyses , and
providing project design, field, evaluation, and operation
and training assistance. The amount expended for contract services
shall not exceed 10 percent of the annual scheduled loan repayment to
the Local Jurisdiction Energy Assistance Account, as determined by
the commission not later than July 1 of each fiscal year.
SEC. 21. Section 25449.4 of the Public Resources Code is amended
to read:
25449.4. (a) Except as provided in subdivision (b), this chapter
shall remain in effect until January 1, 2002
2011 , and as of that date is repealed, unless a later enacted
statute which is enacted before January 1, 2002
2011 , deletes or extends that date.
(b) All loans outstanding as of January 1, 2002
2011 , shall continue to be repaid in accordance with a
schedule established by the commission pursuant to Section 25442.7,
until paid in full. All unexpended funds in the Local Jurisdiction
Energy Assistance Account on January 1, 2002
2011 , and thereafter, except to the extent that those funds
are encumbered pursuant to Section 25443.5, shall be deposited in the
Federal Trust Fund and be available for the purposes for which
federal oil overcharge funds are available pursuant to court judgment
or federal agency order.