BILL ANALYSIS Ó
AB 122
Page 1
Date of Hearing: April 8, 2013
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Roger Dickinson, Chair
AB 122 (Rendon) - As Amended: April 1, 2013
SUBJECT : Energy: energy assessment: nonresidential buildings:
financing
SUMMARY : Establishes the Nonresidential Building Energy Retrofit
Financing Act of 2013 (Act) and requires the California Energy
Commission (CEC) to establish the Nonresidential Building Energy
Retrofit Financing Program (Program) by July 1, 2014 to provide
financial assistance through revenue bonds for owners of eligible
buildings to implement energy efficiency improvements and renewable
energy generation. Specifically, this bill :
1)Establishes the Act and states that its purpose is to facilitate
private financing to enable private, nonresidential building
owners and eligible public entities to invest in clean energy
improvements, renewable energy, and conservation to incentivize
private equity managers to invest in clean energy improvements,
integrate the smart energy economy, and to stimulate the state
economy by directly creating jobs.
2)Defines terms used in the Act, including in part:
a) "Alternative sources of energy" as energy from renewable
cogeneration or gas-fired cogeneration technology that meets
the greenhouse gas (GHG) emissions and efficiency standards in
Self-Generation Incentive Program (SGIP), energy storage
technologies, or energy from solar, biomass, wind or
geothermal systems, or fuel cells. Specifies that alternative
energy systems shall be sized appropriately to offset part or
all of the applicant's electricity demand and shall be located
on-site.
b) "Conventional energy fuel" as any of the following:
i) A fuel derived from petroleum deposits, as specified;
ii) Natural gas, including liquefied natural gas; and,
iii) Nuclear fissionable materials; and,
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iv) Coal.
c) "Eligible building" as a nonresidential building that
completed construction on or before January 1, 2014 and
located within the state.
d) "Energy efficiency improvement" as one or more
installations or modifications for which a building permit is
issued after January 1, 2014 to an eligible building that is
designed to reduce the energy consumption of the building that
qualifies for investor-owned utility (IOU) or publicly-owned
utility (POU) energy efficiency programs, as specified.
e) "Energy remittance repayment agreement" (agreement) as a
contractual agreement between an eligible building owner and
the CEC, secured by a lien, that establishes the repayment
schedule, as specified.
f) "Energy efficiency specialist" as an individual or business
certified by the CEC to analyze, evaluate, or install a
renewable energy source, energy efficiency improvement, or
water efficiency improvement for an eligible property.
g) "Financial assistance" as loans, loan loss reserves,
interest rate reductions, secondary loan purchase, 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
CEC, and other types of assistance determined by the CEC.
h) "Third-party administrator" as an entity selected by the
CEC through a request for proposal to manage project
applications and make recommendations to the CEC as to
individual project's compliance with this chapter.
i) "Warehouse financier" means a financial entity, bank, or
pension fund, chosen by the CEC through a request for proposal
to provide an ongoing and revolving source of financing for
projects.
j) "Nonresidential Building Energy Retrofit Bond" as a bond
issued pursuant to the Act that is secured by an agreement.
aa) "Program administration cost fee" as a fee imposed for the
costs incurred by CEC, CAEATFA, and the State Board of
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Equalization (BOE) to administer the Act.
bb) "Qualified applicant" as a person or business entity that:
i) Owns an eligible building that has a ratio of loan
balance to appraised value not to exceed 85 percent and
subject to adjustment by the Program administrator at the
time the application is approved, unless the holder of the
deed of trust or mortgage recorded against the eligible
property "that has priority over all other deeds of trust or
mortgages recorded against the eligible property has
consented in writing to the recording of an agreement
pursuant to [the Act] against the eligible property."
ii) Timely submits a complete application to CEC, which
notes the existence of any first priority mortgage or deed
of trust on the eligible property and the identity of the
holder of the mortgage or deed of trust, and consents to the
special assessment.
iii) Meets standards of credit worthiness as established by
CEC.
cc) "Renewable energy" as heat, processed heat, space heating,
water heating, steam, space cooling, refrigeration, mechanical
energy, electricity, fuel cells, or energy in any form
convertible to these uses, including energy storage
technologies, and that uses biomass, solar thermal,
photovoltaic, wind, or geothermal technologies.
3)Specifies that the Program shall provide financial assistance for
improvements when the total energy and water cost savings
realized by the property owner and any successor(s) during the
useful life of the improvements, as specified, are expected to
equal or exceed the total costs incurred by the owner under the
Program. Authorizes CEC to waive this requirement if it adopts a
finding that additional improvements may be undertaken that
significantly increase energy efficiency and improve public
health.
4)By July 1, 2014, requires CEC to develop a request for proposal
to develop the Program by a third-party administrator
(administrator) to administer the Program and establish an
automated, asset-based underwriting system for all eligible
buildings. The administrator shall only be selected if the
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Program requires all costs, including start-up costs, to be
covered by the loan recipients, the administrator, the bond
purchasers, or some combination thereof. States that the Program
shall not include General Fund costs or liabilities, except
start-up costs as specified by the bill.
5)Requires the administrator to establish underwriting guidelines
that consider an applicant's qualifications and other appropriate
factors, as specified. Requires the administrator to disclose to
an owner all fees imposed under the Act prior to the submission
of an application by the owner. Requires any owner who wishes to
participate in the Program to submit an application to the
administrator. Specifies that the submission of an application
is a voluntary agreement by the owner for the CEC to record the
agreement on the deed of the eligible building upon approval of
the application.
6)Establishes requirements for the application and related
information and requires the administrator to recommend to the
CEC on the approval or disapproval of the application. Requires
CEC to approve the application when both of the following
conditions are met:
a) The applicant is qualified; and,
b) Prior to receiving funding the applicant shall demonstrate
evidence of intent to make feasible energy efficiency upgrades
recommended and evidence of intent to enroll in eligible
demand response programs.
7)Requires CEC to determine the appropriate guarantees to ensure
cost neutrality of the improvements and may require the owner to
obtain insurance issued by an "A.M. Best or 'A' or better rated
insurance carrier" or a similar product approved by CEC.
8)Upon mutual agreement of the participant and the administrator,
requires the administrator to establish an annualized schedule
for the repayment required by the agreement, including the
interest charged administrative cost fee, and loan loss fee.
Requires the Board to collect the repayment installments.
9)Specifies that the period for repayment shall not exceed the
effective useful life of the improvements or 20 years, whichever
is shorter. The effective useful life of the energy efficiency
improvements shall be calculated using methodologies adopted by
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CEC, in consultation with the PUC, at a publicly noticed meeting.
Exempts the calculation method from Office of Administrative Law
review.
10)Upon the failure of a participant to pay any installment of the
energy remittance payment, requires the Board to assess a penalty
of 10 percent of the unpaid installment. Within 60 days of a
failure to pay the scheduled payment, requires the Board to issue
a demand letter to the participant with notice to the CEC. If
the participant fails to "cure" the default within the time
allotted, the Board may declare the entire outstanding amount,
including any interest due, penalties assessed, and costs of
collection incurred, immediately due and owing and foreclose on
the building by either judicial or nonjudicial foreclosure.
Requires that revenue generated from the sale of an eligible
building be distributed to satisfy liens on the building in
accordance with the priority of the liens.
11)Upon the full repayment of the balance of the agreement,
including any interest and penalties, the Board shall notify the
CEC and record a release of the agreement with the county.
12)Prior to approving an application or a modification of an
approved application, requires CEC to conduct a public hearing,
as specified. Specifies that the CEC approve an application by
adopting a resolution and recording the agreement on the deed of
the building, as specified.
13)Requires CEC to consider the creditworthiness of the applicant
and the effectiveness of the improvements using the following
criteria:
a) Whether the applicants are legal owners of the underlying
building;
b) Whether the applicants are current on any outstanding
mortgage and property tax payments;
c) Whether the applicants are in default or in bankruptcy
proceedings;
d) Whether the applicants have applied for incentives
available through the energy efficiency programs offered by an
electrical or gas corporation; and,
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e) Whether improvements financed by the program follow
applicable standards, including any guidelines adopted by CEC.
14)Specifies that the agreement lien that is secured by a lien
recorded, shall have a prominent header on the document that
reads "Energy Remittance Repayment Agreement Lien" in 14-point
type and contains all of the following information related to the
affected real property:
a) The assessor's parcel number;
b) The owners of record;
c) The legal description; and,
d) The street address.
15) Specifies that, except as otherwise required by law, the
agreement is superior in priority to all subsequent liens
recorded on the deed, except where the first mortgage is
refinanced, in which case the agreement shall remain secondary to
the primary mortgage.
16)Specifies that the sale of the building to enforce the payment
of general ad valorem taxes shall not extinguish the agreement.
Specifies that in the event of foreclosure, the agreement shall
not be "due and owing" during the time when the building is owned
by a financial institution taking title by way of foreclosure.
The amount owing does continue to accrue and becomes due 60 days
after a new, nonfinancial owner takes title. States that
notwithstanding any other law, in the event of a foreclosure, the
agreement shall not be extinguished, unless the outstanding
balance is fully paid through the foreclosure proceeding.
17)Sixty days after the notice of recording of the agreement,
requires CEC to include the application in a portfolio posted on
its website.
18)Requires the Board to deposit any moneys collected pursuant to
this Act into the Nonresidential Building Energy Retrofit Debt
Servicing Fund (Fund), which the bill establishes in the State
Treasury and continuously appropriates to pay the principal and
interest on bonds issued under the Act.
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19)Authorizes the Board to charge a program administration cost fee
on the owner of an eligible building to cover its costs, as well
as CAEATFA's and the CEC's costs, in implementing the Act.
20)Specifies that a local government that has issued revenue bonds
for renewable energy, water efficiency, or energy efficiency
retrofit projects for nonresidential buildings may apply to the
CEC for participation in the Program.
21)Authorizes CEC to:
a) On or before July 1, 2014, analyze and evaluate standards
for nonresidential energy building retrofits previously
developed by various national and international organizations
to provide uniformity and transparency for financial
institutions evaluating loan proposals for energy
improvements, as specified.
b) Establish standards, guidelines, and procedures that are
necessary to ensure the financial stability of the program and
otherwise prevent fraud and abuse.
c) Establish measurement and verification standards necessary
to ensure that the energy efficiency improvements financed
pursuant to the Act are realized at a level specified by CEC.
d) Consider reliance on existing trade certifications or
licensing requirements applicable to occupations that perform
the work funded by the agreement.
e) Establish qualifications for the certification of
contractors to construct or install energy efficiency
improvements.
f) Contract with a public or private party to provide various
monitoring and verification activities.
g) Develop a model "energy aligned lease provision" that
modifies, upon the agreement of the owner and tenants of an
eligible building, a commercial lease agreement to allow the
owners to recover the costs of the renewable energy, water
efficiency, or energy efficiency retrofit improvements that
result in operational savings.
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h) Develop a request for proposal to contract with one or more
financial institutions to secure a short-term, revolving
credit facility (warehouse line of credit) for the purpose of
creating an interim financing mechanism for the loans that
would be aggregated to issue a revenue bond.
i) Adopt a standard notice and disclosure form.
22)Requires CEC to do all of the following:
a) Consult with the PUC, representatives of IOUs and POUs,
local governments, real estate licensees, commercial builders,
commercial property owners, small businesses, financial
institutions, commercial property appraisers, energy rating
organizations, and other entities the CEC deems appropriate;
b) Hold at least one public hearing; and,
c) Adopt regulations and standards to implement the Act at a
public hearing.
23)Beginning June 30, 2015, and every fifth year thereafter,
requires the State Auditor to conduct a performance audit of the
Program and to report the results and recommendations to the
Legislature.
24)Authorizes CAEATFA, on behalf of CEC, to "incur indebtedness and
issue and renew negotiable bonds, notes, debentures, or other
securities of any kind or class" (bonds). Specifies that all
indebtedness shall be payable solely from moneys received
pursuant to the Act. Limits total indebtedness to $2 billion.
25)Requires CAEATFA to conduct a semiannual meeting to authorize
the issuance of bonds and establishes related requirements.
Specifies that every issue of bonds shall be general obligations
of CAEATFA or CEC payable from revenues or moneys received
pursuant to the Act. Establishes various requirements and
limitations relating to the management of the bonds.
26)Specifies that bonds issued pursuant to the Act shall not be
deemed to constitute a debt or liability of the state or of any
political subdivision thereof, other than CAEATFA, or a pledge of
the faith and credit of the state or of any such political
subdivision. States that all bonds be payable solely from funds
obtained pursuant to the Act.
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27)Authorizes CAEATFA to provide for the issuance of bonds for the
purpose of refunding any bonds, notes, or other securities of
[CAEATFA] then outstanding, including the payment of any
redemption premium thereon and any interest accrued or to accrue
to the earliest or subsequent date of redemption, purchase, or
maturity of such bonds. Specifies that any such bonds may be
applied to refund other bonds may be used at maturity or placed
in escrow.
28)Pending this use, specifies that any such escrowed proceeds may
be invested and reinvested by CAEATFA in obligations of, or
guaranteed by, the federal government, or in certificates of
deposit or time deposits secured by obligations of, or guaranteed
by, the federal government, maturing at such time to ensure the
prompt payment of the outstanding bonds.
29)Specifies that bonds issued by CAEATFA are legal investments for
all trust funds, the funds of all insurance companies, commercial
and savings banks, trust companies, savings and loan
associations, and investment companies, for executors,
administrators, trustees, and other fiduciaries, for state school
funds, and for any funds that may be invested in county,
municipal, or school district bonds, as specified.
30)Exempts bonds issued under the Act from all taxation and
assessments imposed under state law.
31)By February 1, 2014, requires CEC to apply to the US Department
of Treasury under the Energy Tax Incentives Act of 2005 for
CAEATFA to issue tax advantage bonds under the federal Clean
Renewable Energy Bonds program or any other applicable program.
32)Establishes the Loan Loss Reserve Account in the Fund, into
which the Board is required to deposit the loan loss reserve fee.
Continuously appropriates the Account to CAEATFA to pay
outstanding balances due under an agreement on a building that
has been foreclosed if the proceeds from the foreclosure are
insufficient to pay any past due payments.
33)Establishes the Administration Account in the Fund, into which
CAEATFA is required to deposit the administration fee and any
penalties collected. Continuously appropriates these funds to
CAEATFA, CEC, and the Board for the costs of implementing the
Act.
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34)Allocates a loan from the General Fund of $1 million to the
Board and allocates a loan of up to $7 million from the General
Fund to CEC to implement the Act. Requires these loans to be
repaid by January 1, 2024 with interest at the pooled money
investment rate. If there are insufficient funds to repay the
loan by this date, requires the Director of Finance to "discuss
alternative repayment terms" with the borrowing agencies.
35)Authorizes CEC, the Board, and CAEATFA to promulgate regulations
to implement the Act.
36)Makes finding and declarations.
EXISTING LAW
1)Requires the CEC to establish criteria for adopting a statewide
home energy rating program for residential buildings, and
requires the CEC to adopt the program in consultation with
representatives of the Department of Real Estate, the Department
of Housing and Community Development, the California Public
Utilities Commission (PUC), investor-owned and municipal
utilities, cities and counties, real estate licensees, home
builders, mortgage lenders, home appraisers and inspectors, home
energy rating organizations, contractors who provide home energy
services, consumer groups, and environmental groups.
2)Establishes several natural gas public purpose programs,
including a low-income rate assistance program, a research and
development program, and energy efficiency programs, which are
funded by a surcharge on natural gas bills of customers of
pipelines regulated by the PUC.
3)Establishes subsidy programs for the installation of solar
photovoltaic systems administered by the PUC and CEC. These
programs, known collectively as the California Solar Initiative
(CSI), are to provide $3.2 billion in subsidies over 10 years in
the form of rebates for the installation of photovoltaic
projects. CSI authorizes the PUC to award $101 million in
subsidies for solar thermal and solar water heating devices.
4)Establishes the Solar Hot Water and Efficiency Act of 2007 to
fund the installation of 200,000 solar hot water systems in
California by 2017.
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5)Establishes the SGIP within the PUC to incentivize clean,
renewable distributed generation resources.
6)Requires the CEC to adopt an integrated energy policy report
(IEPR) every two years. The objective of the IEPR is to evaluate
market trends and develop energy policies that will "conserve
resources, protect the environment, ensure energy reliability,
enhance the state's economy, and protect public health and
safety." The IEPR includes "progress toward statewide renewable
energy targets and issues facing future renewable development;
efforts to increase energy efficiency in existing and new
buildings; progress by utilities in achieving energy efficiency
targets and potential; improving coordination among the state's
energy agencies; streamlining power plant licensing processes;
results of preliminary forecasts of electricity, natural gas, and
transportation fuel supply and demand; future energy
infrastructure needs; the need for research and development
efforts to support statewide energy policies; and, issues facing
California's nuclear power plants."
7)Requires the PUC to have each electrical corporation identify a
separate rate component to collect revenue to fund cost-effective
energy efficiency and conservation activities.
8)Requires all electric and natural gas utilities to meet energy
efficiency savings targets established by the CEC and the PUC.
9)Requires all electric utilities, in procuring energy, to first
acquire all available energy efficiency and demand reduction
resources that are cost effective, reliable, and feasible.
10)Under the California Constitution and the General Obligation
Bond Law, authorizes the Legislature to issue general obligation
bonds for specified purposes with a two-thirds vote of both the
Senate and the Assembly. These bonds only become enacted if they
are approved by a majority vote of the state's electorate. State
law authorizes specified state agencies to issue revenue bonds
and other credit instruments without voter approval.
11)Authorizes the California Alternative Energy and Advanced
Transportation Financing Authority (CAEATFA) to provide financing
for facilities that use alternative energy sources and
technologies. CAEATFA can issue revenue bonds (without voter
approval), make loans, loan loss reserves, and loan guarantees to
develop and commercialize advanced transportation technologies
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that conserve energy, reduce air pollution, and promote economic
development and jobs. State law limits CAEATFA's total debt to
$1 billion.
FISCAL EFFECT : Unknown
COMMENTS :
NEED FOR THE BILL:
According to the author, AB 122 is needed for "commercial property
owners across California who seeks to maximize energy efficiency,
rely on renewable energy, and minimize energy costs. In the
current economy, however, financing for energy retrofitting on a
property-by-property basis can be difficult. AB 122 will allow the
CEC to bring property owners together to gain the benefits of
lower-cost financing."
Under AB 122, a commercial building owner would secure a private
loan with a commercial bank or through a warehouse line of credit
to finance the retrofits. The borrower then would apply to enroll
in the State's Commercial Building Energy Retrofit Financing
Program. The State then aggregates the loans and issues the
revenue bonds, which will pay off the commercial bank loans. Once
enrolled in the program, the building owner begins to send an
energy remittance repayment every 30 days to the BOE. These
remittances are then used to pay off the bonds.
According to a Legislative Analyst's Office (LAO) report released
December 19, 2012, titled, "Energy Efficiency and Alternative
Energy Programs," California currently maintains over a dozen major
programs that are intended to support the development of energy
efficiency and alternative energy in the state. Over the past 10 to
15 years, the state has spent a combined total of roughly $15
billion on such efforts, the vast majority of which has been funded
by utility ratepayers. The LAO went on to recommend that the
Legislature develop a comprehensive strategy for meeting the
state's energy efficiency and alternative energy objectives. Given
that the state has numerous programs administered by multiple
departments, the LAO recommend that the Legislature designate a
lead agency to develop such a comprehensive strategy such as CEC.
Accordingly, the LAO recommended that the Legislature adopt
legislation requiring CEC to develop, in coordination with other
relevant departments (such as California Public Utilities
Commission (PUC) and the Air Resources Board (ARB)) - a
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comprehensive strategy to be submitted for legislative
consideration by January 2014 with the Governor's proposed budget.
AB 122 AS IT RELATES TO THE BANKING AND FINANCE COMMITTEE:
AB 122 establishes that the energy remittance repayment agreement
lien shall have a prominent header on the document that reads
"Energy Remittance Repayment Agreement Lien" in 14-point type and
contains all of the following information related to the affected
real property: the assessor's parcel number; the owners of record,
the legal description; and, the street address.
If a commercial property has any mortgage liens, these liens will
come before the energy remittance repayment agreement and take
priority. This is very unique because it seems most energy
efficiency financing programs such as the Property Assessed Clean
Energy (PACE); the lien takes priority over any mortgage lien.
AB 122 also provides that the lien will stay with the property so
if the commercial property forecloses, the new owner will be
responsible for all past due payments, unless somehow all payments
are taken care of through foreclosure proceedings.
As far as the bond process, under AB 122, CAEATFA would issue bonds
for the program proposed under the bill. The administration of the
program (evaluating and approval of the applicants into the loan
program and other front-end work) would reside with CEC. CAEATFA's
role would be in the back-end through issuance of a bond to
replenish the moneys for the program. CAEATFA's board consists of
the Treasurer, Controller, Director of Finance, Chair of the CEC
and President of the PUC, which determines which projects to
receive funding.
PACE:
PACE is an important program to note because it has similarities to
AB 122. It is a program to finance energy efficiency and renewable
energy upgrades to buildings. Interested property owners evaluate
measures that achieve energy savings and receive 100% financing,
repaid as a property tax assessment for up to 20 years. The
assessment mechanism has been used nationwide for decades to access
low-cost long-term capital to finance improvements to private
property that meet a public purpose. PACE is voluntary. Property
owners, acting in their own self-interest, implement building
upgrades that can save them money, increase the value of their
property. PACE was introduced as a pilot program in 2008. Today,
28 states and the District of Columbia adopted legislation that
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enables local governments to offer PACE benefits to building
owners. PACE is available for residential and commercial
buildings. California enacted the PACE model in statute through AB
811 in 2008.
Unfortunately, in 2010, the Federal Housing Finance Agency (FHFA)
brought forward concerns with PACE. Federally controlled mortgage
lenders Fannie Mae and Freddie Mac told lenders that they would
refuse loans associated with PACE. Regulators also asked state and
local governments to put the programs on hold, claiming that first
liens for PACE loans were a departure from traditional mortgage
lending standards and present "unusual and difficult risk
management challenges" for lenders, servicers and mortgage
securities investors. The FHFA ruling has effectively ended
residential PACE financing, with many local governments suspending
their programs as a result. Commercial PACE programs were not
affected by the FHFA decision and have been moving forward in
various places.
A federal district court in California while not ordering the FHFA
to reverse its current position on underwriting mortgages for
properties with a PACE assessment, directed the agency to proceed
with a notice and comment period for rulemaking. The FHFA took
comments on proposed rules until September 2012 and it is not clear
how long it will take to finalize the proposed rules or what the
outcome will be. In addition, there have been a number of attempts
to resolve the residential PACE issue through legislative action,
including the PACE Assessment Protection Act (H.R. 2599),
introduced in July 2011, that would prevent the FHFA and mortgage
underwriters from discriminating against localities participating
in or implementing a PACE program. To date, however, no legislation
supporting residential PACE programs has passed.
BOE ROLE:
As drafted, this measure provides a great deal of responsibility to
the BOE. AB 122 requires the BOE to collect repayment installments
and transfer payments, issue penalties for unpaid installments,
issue demand letters, and allows the BOE to foreclose on the lien
either through a judicial or non-judicial foreclosure. The bill
also allows the BOE to prescribe, adopt, and enforce guidelines
relating to the collection of the energy remittance repayment
installments. For all essential purposes and how to best describe
the role of the BOE in banking and finance terms would be, AB 122
requires the BOE to act as a commercial mortgage servicer. BOE
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currently is responsible for administering tax programs such as
sales and use taxes, property taxes, special taxes and the tax
appellate programs. The BOE is a revenue generating department for
the State of California. Overall, the mission of the BOE is to
serve the public through fair, effective, and efficient tax
administration. While the BOE is fully capable of collecting
taxes, what AB 122 provides is not a tax; it is an energy
remittance repayment agreement which as defined is a contractual
agreement between an eligible building owner and CEC, secured by a
lien that establishes the repayment schedule. It is questioned
whether the BOE is the best department to be collecting these
payments, administering the fees and potentially foreclosing on a
commercial property. Under California's Code of Civil Procedure,
it grants the BOE the ability to enforce a state tax lien,
therefore, the BOE could commence a foreclosure action by filing a
complaint in state court seeking to have its lien enforced against
real property. The BOE has only used their ability to foreclose
once in the last twenty years and should the procedure commence,
the BOE passes the case to the Attorney General.
According to a previous BOE analysis on SB 1130 (discussed below),
"the BOE does not presently perform any collection duty associated
with installment payment collections from private property owners
nor does it service loans. The mission of the BOE is to serve the
public through fair, effective, and efficient tax administration.
The provisions in this bill represent a departure from our
traditional "tax collection" functions."
RELATED LEGISLATION PERTAINING TO PROPOSITION 39:
SB 39 (De Leon & Steinberg, 2013 Legislative Year) On November 6,
2012, California voters passed Proposition 39, The California Clean
Energy Jobs Act, that establishes the Clean Energy Job Creation
Fund and requires moneys in the fund to be available for
appropriation during specified fiscal years for, among other
things, the purposes of funding energy efficiency projects in
school facilities.
This bill would enact the Clean Energy Employment and Student
Advancement Act of 2013 and would require the Office of Public
School Construction (the office), in consultation with the State
Energy Resources Conservation and Development Commission and the
Public Utilities Commission, to establish a school district
assistance program to distribute grants, on a competitive basis,
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for energy efficiency upgrade projects pursuant to the California
Clean Energy Jobs Act. The bill would require the office, upon the
approval of the State Allocation Board, to award a school district
grants for energy efficiency upgrade projects meeting specified
criteria. The bill would require the office to give priority
applications meeting specified criteria. The bill would require the
office, in consultation with the State Energy Resources
Conservation and Development Commission, to establish a program to
evaluate the potential to fund energy efficiency and clean energy
projects for schools, including colleges and universities, through
the use of matching funds, low-interest loans, or other financing
methods.
PREVIOS LEGISLATION :
SB 1130 (De Leon, 2012 Legislative Year) Establishes the
Nonresidential Building Energy Retrofit Financing Act of 2012
(Act) and requires the California Energy Commission to establish
the Nonresidential Building Energy Retrofit Financing Program by
July 1, 2013 to provide financial assistance through revenue bonds
for owners of eligible buildings to implement energy efficiency
improvements and renewable energy generation. Died in the Assembly
Appropriations Committee.
AB 811 (Levine & Beall, Chapter 159, Statutes of 2008) This bill
authorizes all cities and counties in California to designate areas
within which city officials and willing property owners may enter
into contractual assessments to finance the installation of
distributed generation renewable energy sources and energy
efficiency improvements.
AMENDMENTS :
The author's office commits to working through some technical,
clarifying amendments should the bill move forward and reach the
Assembly Utilities and Commerce Committee. In the definition of
warehouse financier, "financial entity, bank" should be struck and
"financial institution" inserted. In addition, in the latest set
of amendments, the author struck language stating, the lien shall
have "the force, effect, and priority of a judgment lien, and shall
be subordinate to any and all secured mortgage liens recorded
against the deed of the eligible building at the time of recording
of the energy remittance repayment agreement." This language may be
needed to clearly point out that mortgage liens take precedence.
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Furthermore, to provide fluidity, the definition of "energy
remittance repayment agreement" should add the word "lien" at the
end and "lien" should be added every time it is referenced
throughout the bill.
REGISTERED SUPPORT / OPPOSITION :
Support
California Energy Efficiency Industry Council
East Bay Municipal Utility District (EBMUD)
John Chiang, California State Controller
OSRAM SYLVANIA, Inc.
Pacific Gas and Electric Company (PG&E)
Sierra Club California
South Coast Air Quality Management District (SCAQMD)
Opposition
None on file.
Analysis Prepared by : Kathleen O'Malley / B. & F. / (916)
319-3081