BILL NUMBER: SB 771 AMENDED BILL TEXT AMENDED IN ASSEMBLY JUNE 30, 2011 AMENDED IN ASSEMBLY JUNE 20, 2011 AMENDED IN SENATE APRIL 13, 2011 AMENDED IN SENATE MARCH 22, 2011 INTRODUCED BY Senator Kehoe (Coauthors: Senators Blakeslee, Correa, and Harman) FEBRUARY 18, 2011 An act to amendSection 26003Sections 26003 and 26011.6 of the Public Resources Code, relating to energy. LEGISLATIVE COUNSEL'S DIGEST SB 771, as amended, Kehoe. California Alternative Energy and Advanced Transportation Financing Authority. Existing law requires the California Alternative Energy and Advanced Transportation Financing Authority to establish a renewable energy program to provide financial assistance to public power entities, independent generators, utilities, or businesses manufacturing components or systems to generate new and renewable energy sources, develop clean and efficient distributed generation, and demonstrate the economic feasibility of new technologies. Existing law defines "renewable energy" to includespecifiedultralow-emission energy generation technologies. This bill wouldexpand therevise the definition of "renewable energy" and would additionally define "ultralow-emission energy" to include energy generation based on natural gas turbines, landfill gas turbines, digester gas turbines, microturbines, natural gas engines, landfill gas engines,anddigester gas engines , and fuel cells that the authority, in consultation with the State Air Resources Board, determines to meet specified requirements. The bill would make conforming changes . Existing law requires the authority to provide financial assistance to eligible projects. This bill would revise the definition of "project" to include a project that utilizes or is designed to utilize alternative source components. 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 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 of the project 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 in the real or personal property, 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, or any other source of energy, the efficient use of which will reduce the use of fossil and nuclear fuels. (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) (1) "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, alternative source components, or an arrangement for the purchase, including prepayment, or sale of energy derived from an alternative source pursuant to subdivision (g) of Section 26011. (2) "Project," for the purposes of Section 26011.8, means any tangible personal property that is utilized for the design, manufacture, production, or assembly of advanced transportation technologies or alternative source products, components, or systems. (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, landfill gas turbines, digester gas turbines, microturbines, natural gas engines, landfill gas engines, digester gas engines, 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. (k) "Ultralow-emission energy" means energy generation equipment based on thermal energy systems such as natural gas turbines, landfill gas turbines, digester gas turbines, microturbines, natural gas engines, landfill gas engines, digester gas engines, and fuel cells that the authority, in consultation with the State Air Resources Board, determines will achieve reductions of the greenhouse gas emissions pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) and meet the State Air Resources Board's certification standards adopted pursuant to Section 41514.9 of the Health and Safety Code, as set forth in Article 3 (commencing with Section 94200) of Subchapter 8 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations. SEC. 2. Section 26011.6 of the Public Resources Code is amended to read: 26011.6. (a) The authority shall establish a renewable energy and ultralow-emission 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 or ultralow-emission energy sources, develop clean and efficient distributed generation, and demonstrate the economic feasibility of new technologies, such as solar, photovoltaic, wind, and ultralow-emissionequipmentenergy . 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 and ultralow-emission 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 and ultralow-emission 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).