BILL NUMBER: SB 1754 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 14, 2008
AMENDED IN ASSEMBLY JUNE 30, 2008
INTRODUCED BY Senator Kehoe
( Coauthor: Senator Padilla
)
FEBRUARY 22, 2008
An act to amend Sections 26003, 26011, 26011.6, and 26022 of, and
to add Section 26001.5 to, the Public Resources Code, relating to
energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1754, as amended, Kehoe. Energy: California Alternative Energy
and Advanced Transportation Financing Authority.
The California Alternative Energy and Advanced Transportation
Financing Authority Act established the California Alternative Energy
and Advanced Transportation Financing Authority. The authority is
authorized to do all things necessary and convenient to carry out the
purposes of the act. The authority is also required to establish a
renewable energy program to provide financial assistance to certain
specified entities to generate new and renewable energy sources,
develop clean and efficient distributed generation, and demonstrate
the economic feasibility of new technologies.
This bill would additionally authorize the authority to purchase
alternative source energy or projects for sale to a specified
participating party and to make a loan to a participating party to
purchase alternative source energy or projects. The bill would
require the authority to ensure that a financed project is limited to
resources that the authority determines support the state's goals
for the reduction of emissions of greenhouse gases. The bill would
make conforming changes.
This bill would declare specified intent of 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. Section 26001.5 is added to the Public Resources Code,
to read:
26001.5. It is the intent of the Legislature, in enacting Senate
Bill 1754 of the 2008-09 Regular Session, to only provide authority
for the California Alternative Energy and Advanced Transportation
Financing Authority to use bonds to finance power purchase agreement
arrangements, and not to alter or supersede other provisions of law
addressing criteria associated with energy generation or advanced
transportation technologies, such as direct-access, the use, size, or
statewide caps, or the net-metering or feed-in tariff provisions.
SEC. 2. Section 26003 of the Public Resources Code is amended to
read:
26003. As used in this division, unless the context otherwise
requires:
(a) "Authority" means the California Alternative Energy and
Advanced Transportation Financing Authority established pursuant to
Section 26004, and any board, commission, department, or officer
succeeding to the functions of the authority, or to which the powers
conferred upon the authority by this division shall be given.
(b) "Cost" as applied to a project or portion thereof financed
under this division means all or part of the cost of construction and
acquisition of all lands, structures, real or personal property or
an interest therein, rights, rights-of-way, franchises, easements,
and interests acquired or used for a project; the cost of demolishing
or removing any buildings or structures on land so acquired,
including the cost of acquiring any lands to which those buildings or
structures may be moved; the cost of all machinery, equipment, and
furnishings, financing charges, interest prior to, during, and for a
period after, completion of construction as determined by the
authority; the cost of the purchase or sale of energy derived from an
alternative source pursuant to subdivision (g) of Section 26011;
provisions for working capital; reserves for principal and interest
and for extensions, enlargements, additions, replacements,
renovations, and improvements; the cost of architectural,
engineering, financial, accounting, auditing and legal services,
plans, specifications, estimates, administrative expenses, and other
expenses necessary or incident to determining the feasibility of
constructing any project or incident to the construction,
acquisition, or financing of a project.
(c) (1) "Alternative sources" means the application of
cogeneration technology, as defined in Section 25134; the
conservation of energy; or the use of solar, biomass, wind,
geothermal, hydroelectricity under 30 megawatts and meeting
the criteria set forth in paragraph (2) of subdivision (e) of Section
15351 of the Government Code , or any other source of
energy, the efficient use of which will reduce the use of fossil and
nuclear fuels, and is intended primarily to offset part or all of the
customer's own electrical requirements.
(2) "Alternative sources" does not include a hydroelectric
facility that does not meet state laws pertaining to the control,
appropriation, use, and distribution of water, including, but not
limited to, the obtaining of applicable licenses and permits.
(d) "Advanced transportation technologies" means emerging
commercially competitive transportation-related technologies
identified by the authority as capable of creating long-term, high
value-added jobs for Californians while enhancing the state's
commitment to energy conservation, pollution reduction, and
transportation efficiency. Those technologies may include, but are
not limited to, any of the following:
(1) Intelligent vehicle highway systems.
(2) Advanced telecommunications for transportation.
(3) Command, control, and communications for public transit
vehicles and systems.
(4) Electric vehicles and ultralow-emission vehicles.
(5) High-speed rail and magnetic levitation passenger systems.
(6) Fuel cells.
(e) "Financial assistance" includes, but is not limited to,
either, or any combination, of the following:
(1) Loans, loan loss reserves, interest rate reductions, proceeds
of bonds issued by the authority, insurance, guarantees or other
credit enhancements or liquidity facilities, contributions of money,
property, labor, or other items of value, or any combination thereof,
as determined by, and approved by the resolution of, the board.
(2) Any other type of assistance the authority determines is
appropriate.
(f) "Participating party" means either of the following:
(1) A person or an entity or group of entities engaged in business
or operations in the state, whether organized for profit or not for
profit, that does either of the following:
(A) Applies for financial assistance from the authority for the
purpose of implementing a project in a manner prescribed by the
authority.
(B) Participates in the purchase or sale of energy derived from an
alternative source pursuant to subdivision (g) of Section 26011.
(2) A public agency or nonprofit corporation that does either of
the following:
(A) Applies for financial assistance from the authority for the
purpose of implementing a project in a manner prescribed by the
authority.
(B) Participates in the purchase or sale of energy derived from an
alternative source pursuant to subdivision (g) of Section 26011.
(g) "Project" means a land, building, improvement to the land or
building, rehabilitation, work, property, or structure, real or
personal, stationary or mobile, including, but not limited to,
machinery and equipment, whether or not in existence or under
construction, that utilizes, or is designed to utilize, an
alternative source, or that is utilized for the design, technology
transfer, manufacture, production, assembly, distribution, or service
of advanced transportation technologies, or an arrangement for the
purchase, including prepayment, or sale of energy derived from an
alternative source pursuant to subdivision (g) of Section 26011.
(h) "Public agency" means a federal or state agency, department,
board, authority, state or community college, university, or
commission, or a county, city and county, city, regional agency,
public district, school district, or other political entity.
(i) (1) "Renewable energy" means a device or technology that
conserves or produces heat, processes heat, space heating, water
heating, steam, space cooling, refrigeration, mechanical energy,
electricity, or energy in any form convertible to these uses, that
does not expend or use conventional energy fuels, and that uses any
of the following electrical generation technologies:
(A) Biomass.
(B) Solar thermal.
(C) Photovoltaic.
(D) Wind.
(E) Geothermal.
(2) For purposes of this subdivision, "conventional energy fuel"
means any fuel derived from petroleum deposits, including, but not
limited to, oil, heating oil, gasoline, fuel oil, or natural gas,
including liquefied natural gas, or nuclear fissionable materials.
(3) Notwithstanding paragraph (1), for purposes of this section,
"renewable energy" also means ultralow-emission equipment for energy
generation based on thermal energy systems such as natural gas
turbines and fuel cells.
(j) "Revenue" means all rents, receipts, purchase payments, loan
repayments, and all other income or receipts derived by the authority
from a project, or the sale, lease, or other disposition of
alternative source or advanced transportation technology facilities,
or the making of loans to finance alternative source or advanced
transportation technology facilities, and any income or revenue
derived from the investment of money in any fund or account of the
authority.
SEC. 3. Section 26011 of the Public Resources Code is amended to
read:
26011. The authority is authorized and empowered:
(a) To adopt an official seal.
(b) To sue and be sued in its own name.
(c) To issue bonds, notes, bond anticipation notes, and other
obligations of the authority, including, at the option of the
authority, obligations bearing interest that is taxable for purposes
of federal income taxation, for any of its purposes and to fund or
refund the same, all as provided in this division.
(d) To determine the location and character of a project to be
financed under the provisions of this division, to lend financial
assistance to a participating party, to enter into loan agreements
with a participating party for the financing of a project including
creating a lien or security interest in the property, to construct,
reconstruct, renovate, replace, lease, as lessor or lessee, and
regulate the same, and to enter into contracts for the sale of a
project, including installment sales or sales under conditional sales
contracts.
(e) To fix fees and charges for projects, and interest rates with
respect to loans for projects, and to revise from time to time the
fees and charges and interest rates, and to collect rates, rents,
fees, and charges for the use of, and for a facility or service
furnished, or to be furnished, by a project or part of the project
and to contract with a person, partnership, association, corporation,
or public agency with respect to the project, and to fix the terms
and conditions upon which a project may be sold or disposed of,
whether upon installment sales contracts or otherwise.
(f) To employ and fix the compensation of bond counsel, financial
consultants, and advisers as may be necessary in its judgment in
connection with the issuance and sale of any bonds, notes, bond
anticipation notes, or other obligations of the authority; to
contract for engineering, architectural, accounting, or other
services of appropriate state agencies as may be necessary in the
judgment of the authority for the successful development of a
project; and to pay the reasonable costs of consulting engineers,
architects, accountants, and construction experts employed by a
participating party if, in the judgment of the authority, the
services are necessary to the successful development of a project,
and the services are not obtainable from a state agency.
(g) To purchase alternative source energy or projects from a
person or entity for sale to a participating party, or to make a loan
to a participating party to purchase alternative source energy or
projects, or to purchase from a person or entity that has contracted
to sell alternative source energy to a participating party the right
to receive purchase payments and related rights under that contract
or any related contracts. Notwithstanding any other applicable law,
the authority and a public agency, for purposes of a program or
financing, shall have the power to enter into contractual
arrangements and related agreements or instruments, including,
without limitation, a prepayment purchase contract, lease, loan,
construction, security, operation and maintenance, or other agreement
or instrument, with the authority or with a participating party,
upon the terms and subject to the conditions that may be necessary or
convenient to accomplish the purposes of this subdivision.
(h) To do all things generally necessary or convenient to carry
out the purposes of this division.
SEC. 4. Section 26011.6 of the Public Resources Code is amended to
read:
26011.6. (a) The authority shall establish a renewable energy
program to provide financial assistance to public power entities,
independent generators, utilities, or businesses manufacturing
components or systems, or both, to generate new and renewable energy
sources, develop clean and efficient distributed generation, and
demonstrate the economic feasibility of new technologies, such as
solar, photovoltaic, wind, and ultralow-emission equipment. The
authority shall give preference to utility-scale projects that can be
rapidly deployed to provide a significant contribution as a
renewable energy supply. The program established pursuant to this
subdivision shall include financial assistance provided pursuant to
subdivision (g) of Section 26011.
(b) The authority shall make every effort to expedite the
operation of renewable energy systems, and shall adopt regulations
for purposes of this section and Section 26011.5 as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code. For
purposes of that Chapter 3.5, including Section 11349.6 of the
Government Code, the adoption of the regulations shall be considered
by the Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare. Notwithstanding the 120-day limitation specified in
subdivision (e) of Section 11346.1 of the Government Code, the
regulations shall be repealed 180 days after their effective date,
unless the authority complies with Sections 11346.2 to 11347.3,
inclusive, as provided in subdivision (e) of Section 11346.1 of the
Government Code.
(c) The authority shall consult with the State Energy Resources
Conservation and Development Commission regarding the financing of
projects to avoid duplication of other renewable energy projects.
(d) The authority shall ensure that any financed project shall
offer its power within California on a long-term contract basis.
(e) The authority shall ensure that a financed project is limited
to resources that the authority determines support the state's goals
for the reduction of emissions of greenhouse gases pursuant to the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code).
SEC. 5. Section 26022 of the Public Resources Code is amended to
read:
26022. (a) The authority is authorized from time to time to issue
its negotiable bonds, notes, debentures, or other securities
(hereinafter collectively called "bonds") for any of its purposes.
The bonds may be authorized, without limiting the generality of the
foregoing, to finance a single project for a single participating
party, a series of projects for a single participating party, a
single project for several participating parties, or several projects
for several participating parties, or the purchase and sale of
alternative source energy or projects pursuant to subdivision (g) of
Section 26011. In anticipation of the sale of bonds as authorized by
Section 26020, or as may be authorized pursuant to Section 26021, the
authority may issue negotiable bond anticipation notes and may renew
the notes from time to time. The bond anticipation notes may be paid
from the proceeds of sale of the bonds of the authority in
anticipation of which they were issued. Notes and agreements relating
to the notes and bond anticipation notes, collectively called notes,
and the resolution or resolutions authorizing the notes may contain
any provisions, conditions or limitations that a bond, agreement
relating to the bond, and bond resolution of the authority may
contain. However, a note or renewal of the note shall mature at a
time not exceeding two years from the date of issue of the original
note.
(b) Except as may otherwise be expressly provided by the
authority, every issue of its bonds, notes, or other obligations
shall be general obligations of the authority payable from any
revenues or moneys of the authority available for these purposes and
not otherwise pledged, subject only to any agreements with the
holders of particular bonds, notes, or other obligations pledging any
particular revenues or moneys and subject to any agreements with any
participating party. Notwithstanding that the bonds, notes, or other
obligations may be payable from a special fund, they are for all
purposes negotiable instruments, subject only to the provisions of
the bonds, notes, or other obligations for registration.
(c) Subject to the limitations in Sections 26020 and 26021, the
bonds may be issued as serial bonds or as term bonds, or the
authority, in its discretion, may issue bonds of both types. The
bonds shall be authorized by resolution of the authority and shall
bear the date or dates, mature at the time or times, not exceeding 50
years from their respective dates, bear interest at the rate or
rates, be payable at the time or times, be in the denominations, be
in the form, either coupon or registered, carry the registration
privileges, be executed in a manner, be payable in lawful money of
the United States of America at a place or places, and be subject to
terms of redemption, as the resolution or resolutions may provide.
The bonds or notes shall be sold by the Treasurer within 60 days of
receipt of a certified copy of the authority's resolution authorizing
the sale of the bonds. However, the authority, at its discretion,
may adopt a resolution extending the 60-day period. The sales may be
a public or private sale, and for the price or prices and on the
terms and conditions, as the authority shall determine after giving
due consideration to the recommendations of any participating party
to be assisted from the proceeds of the bonds or notes. Pending
preparation of the definitive bonds, the Treasurer may issue interim
receipts, certificates, or temporary bonds that shall be exchanged
for the definitive bonds. The Treasurer may sell bonds, notes, or
other evidence of indebtedness at a price below their par value.
However, the discount on a security sold pursuant to this section
shall not exceed 6 percent of the par value.
(d) A resolution or resolutions authorizing bonds or an issue of
bonds may contain provisions that shall be a part of the contract
with the holders of the bonds to be authorized, as to all of the
following:
(1) Pledging the full faith and credit of the authority or
pledging all or part of the revenues of a project or a
revenue-producing contract or contracts made by the authority with an
individual, partnership, corporation, or association or other body,
public or private, or other moneys of the authority, to secure the
payment of the bonds or of any particular issue of bonds, subject to
the agreements with bondholders as may then exist.
(2) The rentals, fees, purchase payments, loan repayments, and
other charges to be charged, and the amounts to be raised in each
year by the charges, and the use and disposition of the revenues.
(3) The setting aside of reserves or sinking funds, and the
regulation and disposition of the reserves or sinking funds.
(4) Limitations on the right of the authority or its agent to
restrict and regulate the use of the project or projects to be
financed out of the proceeds of the bonds or any particular issue of
bonds.
(5) Limitations on the purpose to which the proceeds of sale of an
issue of bonds then or thereafter to be issued may be applied and
pledging those proceeds to secure the payment of the bonds or the
issue of the bonds.
(6) Limitations on the issuance of additional bonds, the terms
upon which additional bonds may be issued and secured, and the
refunding of outstanding bonds.
(7) The procedure, if any, by which the terms of a contract with
bondholders may be amended or abrogated, the amount of bonds the
holders of which must consent to the amendment or abrogation, and the
manner in which that consent may be given.
(8) Limitations on expenditures for operating, administrative, or
other expenses of the authority.
(9) Defining the acts or omissions to act that constitute a
default in the duties of the authority to holders of its obligations
and providing the rights and remedies of the holders in the event of
a default.
(10) The mortgaging of a project and the site of the project for
the purpose of securing the bondholders.
(11) The mortgaging of land, improvements, or other assets owned
by a participating party for the purpose of securing the bondholders.
(12) Procedures for the selection of projects to be financed with
the proceeds of the bonds authorized by the resolution, if the bonds
are to be sold in advance of the designation of the projects and
participating parties to receive the financing.
(e) Neither the members of the authority nor a person executing
the bonds or notes shall be liable personally on the bonds or notes
or be subject to personal liability or accountability by reason of
the issuance of the bond or note.
(f) The authority shall have power out of any funds available for
these purposes to purchase its bonds or notes. The authority may
hold, pledge, cancel, or resell those bonds, subject to and in
accordance with agreements with bondholders.