Amended in Assembly June 13, 2014

Senate Bill No. 862

Introduced by Committee on Budget and Fiscal Review

January 9, 2014

begin delete An act relating to the Budget Act of 2014. end delete begin insert An act to amend Section 16428.9 of, and to add Sections 12087.5 and 19602.8 to, the Government Code, to amend Sections 39711, 39715, and 44091.1 of, and to add Sections 39719 and 39719.1 to, the Health and Safety Code, to amend Sections 4475, 25470, 25472, 25474, and 75121 of, to amend the heading of Chapter 5.7 (commencing with Section 25470) of Division 15 of, to add Sections 25471.5 and 25474.5 to, to add Article 7.8 (commencing with Section 4598) to Chapter 8 of Part 2 of Division 4 of, to add Chapter 22 (commencing with Section 42995) to Part 3 of Division 30 of, to add Division 44 (commencing with Section 75200) to, and to repeal Section 12292 of, the Public Resources Code, to amend Section 2827 of the Public Utilities Code, to repeal Section 2 of Chapter 657 of the Statutes of 2007, and to amend Section 1 of Chapter 415 of the Statutes of 2013, relating to greenhouse gases, and making an appropriation therefor, to take effect immediately, bill related to the budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 862, as amended, Committee on Budget and Fiscal Review. begin delete Budget Act of 2014. end delete begin insert Greenhouse gases: emissions reduction. end insert

begin insert

(1) The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include the use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature.

end insert begin insert

This bill would establish the CalRecycle Greenhouse Gas Reduction Revolving Loan Program, which would authorize the Department of Resources Recycling and Recovery to provide loans and grants to reduce greenhouse gas emissions by promoting in-state development of infrastructure to process organics and other recyclable materials into new value-added products, as specified. The bill would establish the CalRecycle Greenhouse Gas Reduction Revolving Loan Fund. The bill would continuously appropriate moneys in the CalRecycle Greenhouse Gas Reduction Revolving Loan Fund to provide loans under the program. The bill would transfer $10,000,000 from the Greenhouse Gas Reduction Fund to the CalRecycle Greenhouse Gas Reduction Revolving Loan Fund, as specified, thereby making an appropriation. The bill would require the department to administer a grant program to provide financial assistance to reduce greenhouse gas emissions, as specified, from any additional appropriation by the Legislature from the Greenhouse Gas Reduction Fund.

end insert begin insert

(2) Existing law establishes the Department of Community Services and Development and requires the department to administer, among other things, the federal Low-Income Home Energy Assistance Program.

end insert begin insert

This bill would require the Department of Community Services and Development to develop and administer the Energy Efficiency Low-Income Weatherization Program and to expend moneys appropriated by the Legislature from the Greenhouse Gas Reduction Fund for the purposes of the program.

end insert begin insert

(3) Existing law, pursuant to the Budget Act of 2013, provides for a $500 million loan from the Greenhouse Gas Reduction Fund to the General Fund.

end insert begin insert

Existing law creates the High-Speed Rail Authority, with certain powers and duties relative to development and construction of a high-speed rail system.

end insert begin insert

This bill would require that $400 million of the $500 million loan made from the Greenhouse Gas Reduction Fund to the General Fund in 2013, upon repayment to the Greenhouse Gas Reduction Fund, be available to the High-Speed Rail Authority beginning in the 2015-16 fiscal year for specified components of the initial operating segment and the Phase I Blended system of the high-speed rail project. The bill would require the loan to be repaid as necessary based on the financial needs of the high-speed rail project, and would continuously appropriate these funds from the Greenhouse Gas Reduction Fund to the authority.

end insert begin insert

This bill would also, beginning in the 2015-16 fiscal year, continuously appropriate 25% of the annual proceeds of the Greenhouse Gas Reduction Fund to the authority for these high-speed rail purposes.

end insert begin insert

(4) Existing law provides various sources of funding for transportation programs, including capital and operating funds for rail services, including intercity, commuter, and urban rail systems.

end insert begin insert

This bill would create the Transit and Intercity Rail Capital Program to fund capital improvements and operational investments to modernize California’s intercity, commuter, and urban rail systems to achieve certain policy objectives, including the expansion and integration of rail services, with the program to be administered by the Transportation Agency. The bill would provide for the awarding of grants by the California Transportation Commission for various purposes to public agency operators of rail services from funds appropriated in that regard from the Greenhouse Gas Reduction Fund. The bill would require a project to demonstrate that it will achieve a reduction in greenhouse gas emissions in order to be eligible for funding under the program, and would require funds to be programmed with a goal of providing 25% of available funding to projects benefiting disadvantaged communities. The bill would require the Transportation Agency to adopt procedures and guidelines governing the program, and to conduct at least 2 public workshops on draft program guidelines containing selection criteria. The bill would require the commission to award grants pursuant to the project list prepared by the Transportation Agency. The bill would, beginning in the 2015-16 fiscal year, continuously appropriate 10% of the annual proceeds of the Greenhouse Gas Reduction Fund for the program.

end insert begin insert

This bill would establish the Low Carbon Transit Operations Program to provide operating and capital assistance for transit agencies to reduce greenhouse gas emissions and improve mobility, with a priority on serving disadvantage communities. The bill would require the Department of Transportation, in coordination with the State Air Resources Board, to develop guidelines for use by transit agencies to demonstrate that proposed expenditures will meet specified criteria and establish reporting requirements for documenting ongoing compliance with those criteria. The bill would require the department, in consultation with the state board, to determine whether proposed expenditures are eligible for funding under the program before authorizing the Controller to release the funds. The bill would, beginning in the 2015-16 fiscal year, continuously appropriate 5% of the annual proceeds of the Greenhouse Gas Reduction Fund for the program.

end insert begin insert

(5) Existing law establishes in the State Treasury the Energy Efficiency State Property Revolving Loan Fund, which serves as a repository for moneys received by the State Energy Resources Conservation and Development Commission under the federal American Recovery and Reinvestment Act of 2009 for the purposes of the federal State Energy Programs. Existing law continuously appropriates moneys in the fund to the Department of General Services for loans for projects on state-owned buildings and facilities to achieve greater, long-term energy efficiency, energy conservation, and energy cost and use avoidance. Existing law authorizes the commission to recover the project costs through energy utility rebates awarded to the state agency receiving the loan as a result of completed projects.

end insert begin insert

This bill would establish in the State Treasury the Energy Efficiency Retrofit State Revolving Fund and would continuously appropriate moneys in the fund to the department for loans for projects in or on state-owned buildings and facilities to implement energy efficiency retrofit projects and to use renewable energy technology to achieve energy efficiency, reduce emissions of greenhouse gases, and reduce grid-based electricity purchases, thereby making an appropriation. The bill would authorize the commission to recover project costs through interest earnings, rather than through energy utility rebates.

end insert begin insert

(6) Existing law establishes the Strategic Growth Council consisting of specified members and requires the council to, among other things, manage and award grants and loans to support the planning and development of sustainable communities. Existing law requires the council on July 1, 2010, and annually thereafter, to report to the Legislature on the financial assistance provided.

end insert begin insert

This bill would increase the membership of the council by 2 members with one appointed by the Speaker of the Assembly and one appointed by the Senate Committee on Rules. The bill would require the council to develop and administer the Affordable Housing and Sustainable Communities Program to reduce greenhouse gas emissions through projects that implement land use, housing, transportation, and agricultural land preservation practices to support infill and compact development and that support other related and coordinated public policy objectives. The bill would require the executive director of the council to report the progress on the implementation of the program as a part of the council’s annual report to the Legislature. The bill would, beginning in the 2015-16 fiscal year, continuously appropriate to the council 20% of the annual proceeds of the Greenhouse Gas Reduction Fund for the program.

end insert begin insert

(7) The Z’berg-Nejedly Forest Practice Act of 1973 prohibits a person from conducting timber operations on timberland unless a timber harvesting plan has been prepared by a registered professional forester and has been submitted to the Department of Forestry and Fire Protection and approved by the Director of Forestry and Fire Protection or the State Board of Forestry and Fire Protection. A violation of the act is a crime.

end insert begin insert

This bill would authorize the director to enter into agreements and make grants for the purpose of preparing a program timberland environmental impact report (PTEIR) for projects that demonstrate potential to increase carbon sequestration, decrease atmospheric carbon levels, and reduce the potential for large wildland fires on land owned by smaller nonindustrial landowners, as defined. The bill would require a participating landowner to do certain things to be eligible to participate, including submit a proposal to the department detailing the long-term forest and land management plans, for approval by the director. The bill would require the department to pay for the costs of preparing the PTEIR or provide grants from funds appropriated to the department from the Greenhouse Gas Reduction Fund. The bill would authorize the board to promulgate regulations, guidelines, or publications as the board deems necessary to carry out the above provisions. The bill would require the regulations to specify, among other things, criteria to determine that timberlands have demonstrated potential for increased carbon sequestration and fire protection benefits.

end insert begin insert

Because a violation of these provisions by participating landowners would be a crime, the bill would impose a state-mandated local program.

end insert begin insert

(8) The California Constitution establishes the State Personnel Board and sets forth the duties of the board, including prescribing classifications for state employees. Existing law authorizes the Department of Human Resources to conduct demonstration projects, defined as a project approved by the State Personnel Board and conducted by the department or another appointed authority to determine whether a specified change in personnel management policies or procedures would result in improved state personnel management.

end insert begin insert

This bill would authorize the Department of Forestry and Fire Protection to conduct a demonstration project for competitive examinations on a position specific basis for specified classifications relating to forestry and to make appointments to positions based on a merit process open to all persons meeting specific minimum qualifications, as provided.

end insert begin insert

(9) Existing law authorizes the Director of Forestry and Protection to enter into an agreement, including a grant agreement, for the prescribed burning or other hazardous fuel reduction with the owner or any other person who has legal control of any property or any public agency, as provided.

end insert begin insert

This bill would additionally authorize the director to enter into an agreement, including a grant agreement, with any nonprofit organization.

end insert begin insert

(10) The Forest Legacy Program encourages the conservation of private forest lands by authorizing the Department of Forestry and Fire Protection to acquire conservation easements of eligible properties according to specified criteria. Existing law repeals these provisions on January 1, 2015, but requires the department to, among other things, provide monitoring of the conservation easements, despite the repeal.

end insert begin insert

This bill would delete the provision repealing the program, thereby continuing the program indefinitely.

end insert begin insert

(11) Existing law establishes the Air Quality Improvement Program that is administered by the State Air Resources Board for the purposes of funding projects related to, among other things, reduction of criteria air pollutants and improvement of air quality. Pursuant to the Air Quality Improvement Program, the state board has established the Clean Vehicle Rebate Project to promote the production and use of zero-emission vehicles and the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project to provide vouchers to help California fleets to purchase hybrid and zero-emission trucks and buses.

end insert begin insert

Existing law requires the Controller to transfer, as a loan, $30,000,000 from the Vehicle Inspection and Repair Fund to the Air Quality Improvement Fund. Existing law appropriates to the state board these moneys in the Air Quality Improvement Fund to be expended only for the Clean Vehicle Rebate Project and the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project.

end insert begin insert

This bill instead would appropriate $30,000,000 from the Greenhouse Gas Reduction Fund to the state board to be expended only for the Clean Vehicle Rebate Project and the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project. The bill would require the unencumbered balance of the appropriations from the Air Quality Improvement Fund to revert to the Vehicle Inspection and Repair Fund. The bill would require the appropriation from the Greenhouse Gas Reduction Fund to be available for encumbrance until June 30, 2015.

end insert begin insert

(12) Existing law requires a certain amount of the smog abatement fee collected from owners of specified vehicles to be deposited in the Vehicle Inspection and Repair Fund.

end insert begin insert

This bill would authorize those moneys to be expended, upon appropriation by the Legislature, for the Clean Vehicle Rebate Project. The bill would transfer $15,000,000 from the Vehicle Inspection and Repair Fund to the Air Quality Improvement Fund.

end insert begin insert

(13) Existing law requires a state agency expending moneys appropriated by the Legislature from the Greenhouse Gas Reduction Fund to prepare a record regarding the expenditure of those moneys.

end insert begin insert

This bill would require the State Air Resources Board to develop guidance on reporting and quantification methods for agencies receiving an appropriation from the Greenhouse Gas Reduction Fund.

end insert begin insert

(14) Existing law requires the California Environmental Protection Agency to identify disadvantaged communities for investment opportunities funded by the Greenhouse Gas Reduction Fund. Existing law requires the Department of Finance, in consultation with the State Air Resources Board and other relevant state agencies, to develop a 3-year investment plan for moneys deposited in the Greenhouse Gas Reduction Fund. Existing law requires the investment plan to allocate a certain amount of moneys from the fund to benefit disadvantaged communities. Existing law requires funding guidelines developed for agencies administering programs funded by the Greenhouse Gas Reduction Fund to include guidelines for how an administering agency should maximize benefits for disadvantaged communities.

end insert begin insert

This bill would require the California Environmental Protection Agency to hold one public workshop before making the identification. The bill would require the State Air Resources Board, in consultation with the California Environmental Protection Agency, to develop guidelines for administering agencies to ensure the above requirements are met.

end insert begin insert

(15) Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations, as defined. Existing law requires every electric utility, as defined, to develop a standard contract or tariff providing for net energy metering, as defined, and to make this contract or tariff available to eligible customer-generators, as defined, upon request for generation by a renewable electrical generation facility, as defined. An eligible customer-generator is defined as meaning a residential customer, small commercial customer, or commercial, industrial, or agricultural customer of an electric utility, who uses a renewable electrical generation facility, or a combination of those facilities, with a total capacity of not more than one megawatt, that is located on the customer’s owned, leased, or rented premises, and is interconnected and operates in parallel with the electrical grid, and is intended primarily to offset part or all of the customer’s own electrical requirements.

end insert begin insert

This bill would include, as an eligible customer-generator, a facility of the Department of Corrections and Rehabilitation using a renewable electrical generation technology, or a combination of renewable electrical generation technologies, with a total capacity of not more than 8 megawatts and that does not export more than 1.35 megawatts of electricity generated by wind technologies to the electrical grid at any time.

end insert begin insert

(16) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert begin insert

(17) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

end insert begin delete

This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2014.

end delete

Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert begin insert

(a) The Legislature finds and declares all of the
following:

end insert begin insert

(1) The Legislature found, in the California Global Warming
Solutions Act of 2006 (Division 25.5 (commencing with Section
38500) of the Health and Safety Code), enacted as Chapter 488
of the Statutes of 2006 (AB 32), that global warming caused by
emissions of greenhouse gases poses a serious threat to the
economic well-being, public health, natural resources, and the
environment of California. Data, research, and studies collected
and published since the passage of AB 32, including the Indicators
of Climate Change in California, August 2013 issued by the
California Environmental Protection Agency; the Our Changing
Climate 2012, Vulnerability & Adaption to the Increasing Risks
from Climate Change in California - A Summary Report on the
Third Assessment from the California Climate Change Center;
and the Third United States National Climate Assessment by the
United States Global Change Research Program (May, 2014)
confirm that the detrimental effects of global warming identified
in AB 32 continue to materialize and expand.

end insert begin insert

(2) Under AB 32, the State Air Resources Board is charged with
monitoring and regulating sources of emissions of greenhouse
gases that cause global warming. Exercising this responsibility,
the state board adopted the AB 32 Scoping Plan, which identified
various regulatory programs that are designed to achieve the
maximum technologically feasible and cost-effective reductions
in emissions of greenhouse gases. These programs further the
purposes of AB 32. The state board has subsequently adopted these
programs.

end insert begin insert

(3) Under the authority granted by AB 32, the state board
adopted the California Cap on Greenhouse Gas Emissions and
Market-Based Compliance Mechanisms regulation. The regulation
includes the distribution of a portion of the allowances by auction
and reserve sales, the proceeds of which the Legislature directed
be deposited in the Greenhouse Gas Reduction Fund (GGRF).

end insert begin insert

(4) As enacted by Chapter 807 of the Statutes of 2012, the
Department of Finance developed and submitted the first three-year
investment plan to the Legislature in 2013. The investment plan
identifies the state’s greenhouse gas emission reduction goals and
priority programs for investment of proceeds deposited into the
GGRF to support achievement of those goals.

end insert begin insert

(5) As required by existing law, moneys are to be appropriated
from the GGRF in a manner consistent with the requirements of
Chapter 4.1 (commencing with Section 39710) of Part 2 of Division
26 of the Health and Safety Code, including the recommendations
of the investment plan, and Article 9.7 (commencing with Section
16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the
Government Code. Pursuant to these requirements, the Governor
has developed and submitted the Cap-and-Trade Expenditure Plan
containing an annual budget proposal for proceeds in the GGRF.

end insert begin insert

(6) As required by existing law, the use of the moneys
appropriated from the GGRF for the Cap-and-Trade Expenditure
Plan furthers the regulatory purposes of AB 32 by facilitating the
achievement of reductions in greenhouse gases in the state. The
Cap-and-Trade Expenditure Plan includes the following
programmatic investment areas:

end insert begin insert

(A) Transit, Affordable Housing, and Sustainable Communities.

end insert begin insert

(B) High-Speed Rail.

end insert begin insert

(C) Low Carbon Transportation.

end insert begin insert

(D) Energy Efficiency and Renewable Energy.

end insert begin insert

(E) Natural Resources and Waste Diversion.

end insert begin insert

(7) Programs included in the Cap-and-Trade Expenditure Plan
include the following:

end insert begin insert

(A) Expenditures for low-carbon transportation that include,
but are not limited to, cleaning up cars, trucks, buses, and freight
movement to meet federally mandated clean air requirements and
long-term greenhouse gas emissions reduction goals, funding for
heavy-duty freight, electric vehicle programs and rebates, and
off-road vehicles.

end insert begin insert

(B) Expenditures for energy efficiency and renewable energy
that include, but are not limited to, efficiency and renewable
programs for low-income and commercial or industrial users,
projects for agricultural energy, and funding for commercial scale
technology deployment and clean technology innovation.

end insert begin insert

(C) Expenditures for natural resources and waste diversion that
include, but are not limited to, urban forestry, parks, water
efficiency infrastructure projects, forestry and landscaping, wetland
development, waste diversion, and recycling.

end insert begin insert

(D) The Affordable Housing and Sustainable Communities
Program, which authorizes the Strategic Growth Council to fund
land-use, housing, transportation, and land preservation projects
to support infill and compact development that reduces greenhouse
gas emissions. These projects, which were described in the AB 32
Scoping Plan, facilitate the reduction of the emissions of
greenhouse gases by improving mobility options and increasing
infill development, which decrease vehicle miles traveled and
associated greenhouse gas and other emissions, and by reducing
land conversion, which would result in emissions of greenhouse
gases.

end insert begin insert

(E) The Transit and Intercity Rail Capital Program, which
authorizes the California Transportation Commission to provide
grants, based on determinations of the Transportation Agency, to
fund capital improvements and operational investments that will
modernize California’s transit systems and intercity, commuter,
and urban rail systems to reduce emissions of greenhouse gases
by reducing vehicle miles traveled throughout California.

end insert begin insert

(F) The Low Carbon Transit Operations Program, which
authorizes the Controller to provide funding allocations based on
project evaluation from the Department of Transportation and the
State Air Resources Board, to fund operation investments to
increase transit ridership and reduce emissions of greenhouse
gases by reducing vehicle miles traveled throughout California.

end insert begin insert

(G) The High Speed Rail Program, which authorizes the High
Speed Rail Authority to utilize funds to begin the initial operating
segment and the Phase I Blended System, and further
environmental and design work on the statewide high speed rail
system. The Safe, Reliable High-Speed Passenger Train Bond Act
for the 21st Century (Chapter 20 (commencing with Section 2940)
of Division 3 of the Streets and Highways Code), approved by the
voters in 2008, specifies that the high-speed train system, once it
is completed and becomes operational, will contribute significantly
toward the goal of reducing emissions of greenhouse gases and
other air pollutants and will help reduce California’s dependence
on foreign energy sources. As recognized in the AB 32 Scoping
Plan, implementation of a high speed rail system will facilitate the
reduction of emissions of greenhouse gases and other air pollutants
by providing the foundation for a large-scale transformation of
California’s transportation infrastructure, displacing millions of
vehicle miles traveled on the road, reducing demand for air travel,
and increasing train ridership to ensure that the state’s greenhouse
gas emission reductions are maintained and continued.

end insert begin insert

(H) A green state buildings program, which authorizes the
Department of General Services to assist with loan financing to
reduce the emissions of greenhouse gases by implementing energy
efficiency retrofit projects and renewable energy technology at
state buildings. These types of green building retrofit and
renewable energy projects were specifically encouraged in the AB
32 Scoping Plan and will reduce greenhouse gas emissions by
achieving energy efficiency and reducing grid-based electricity
purchases, including the ability for building distributed generation
projects.

end insert begin insert

(I) The Clean Vehicle Rebate Project, which authorizes the State
Air Resources Board to further promote the production and use
of zero-emission vehicles by providing rebates to provide incentives
for the purchase or lease of eligible zero-emission or plug-in hybrid
electric vehicles. Increasing the use of zero-emission and plug-in
hybrid electric vehicles was described in the AB 32 Scoping Plan
as an important method to replace conventional vehicles with
lower-emitting, including zero-emitting, vehicles, and thereby help
California meet its 2020 greenhouse gas emissions limit and
longer-term objective of climate stabilization.

end insert begin insert

(J) The Program Timberland Environmental Impact Report
(PTEIR) for Carbon Sequestration and Fuel Reduction Program,
which seeks to directly reduce emissions of greenhouse gases by
increasing the potential of California’s timberlands to sequester
carbon and decrease emissions of greenhouse gases from wildfire
by authorizing the Department of Forestry and Fire Protection to
provide grants and other assistance to private landowners to
improve the long-term management of timberlands and improve
the carbon sequestration ability of these lands. Long-term
uneven-aged management of private timberlands within the state
and the retention of large, old trees can increase the ability of
timberlands to sequester carbon through increased growth and
inventory and to convert carbon dioxide into biomass through
photosynthesis. Prudent management of timberlands can decrease
the potential for large wildland fires that release greenhouse gases
by creating forests that are less susceptible to ignition and that
reduce the intensity of wildland fires, thereby allowing for more
successful fire suppression efforts.

end insert begin insert

(K) The Waste Diversion and Greenhouse Gas Reduction
Financial Assistance Program, which authorizes the Department
of Resources Recycling and Recovery to implement a loan and
grant program to facilitate the reduction of greenhouse gas
emissions by assisting public and private entities in California to
implement projects that divert waste through reuse, recycling, and
other diversion methods. These recycling and waste diversion
projects were highlighted in the AB 32 Scoping Plan, and could
include composting to use food waste as feedstock, anaerobic
digestion to produce biofuels and bioenergy, designing and
constructing facilities for processing recyclable materials, and
reducing emissions of greenhouse gases by more efficiently
avoiding the production of methane emissions associated with
land filling materials, while helping to provide low-carbon fuels.

end insert begin insert

(8) The Cap-and-Trade Expenditure Plan investments to be
funded, whether by annual or continuous appropriation, including
those described in paragraph (7), also further certain additional
regulatory purposes of AB 32, including reducing air pollutants,
directing public and private investment toward disadvantaged
communities, increasing the diversity of energy sources, and
creating opportunities for businesses, public agencies, nonprofits,
and other community institutions to participate in and benefit from
statewide efforts to reduce emissions of greenhouse gases.

end insert begin insert

(9) The Cap-and-Trade Expenditure Plan investments to be
funded, whether by annual or continuous appropriation, including
those described in paragraph (7), are consistent with subdivision
(b) of Section 39712 of the Health and Safety Code in facilitating
the achievement of reduction of the emissions of greenhouse gases.

end insert begin insert

(10) The Cap-and-Trade Expenditure Plan investments to be
funded, whether by annual or continuous appropriation, including
those described in paragraph (7), are consistent with the
Cap-and-Trade Auction Proceeds Investment Plan: Fiscal Years
2013-14 through 2015-16, which included rail modernization,
including high speed rail, transit, housing, sustainable
communities, green buildings, waste diversion, low and zero
emission passenger vehicles, and improved forest management
and practices to sequester carbon as important areas for the
investment of funds to reduce emissions of greenhouse gases and
further the regulatory purposes of AB 32.

end insert begin insert

(11) The Cap-and-Trade Expenditure Plan investments to be
funded, whether by annual or continuous appropriation, including
those described in paragraph (7), will satisfy the obligation under
Section 39713 of the Health and Safety Code that the Investment
Plan developed and submitted to the Legislature allocates a
minimum of 25 percent of the available moneys in the fund to
projects that provide benefits to disadvantaged communities
identified pursuant to Section 39711 of the Health and Safety Code,
and allocates a minimum of 10 percent of the available moneys in
the fund to projects located within those disadvantaged
communities.

end insert begin insert

(12) All investments made pursuant to this act are consistent
with AB 32.

end insert begin insert

(b) It is the intent of the Legislature that the continuous
appropriations made pursuant to this act are subject to Chapter
4.1 (commencing with Section 39710) of Part 2 of Division 26 of
the Health and Safety Code, including the recommendations of the
investment plan, and Article 9.7 (commencing with Section
16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the
Government Code.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 12087.5 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 12087.5. end insert   

(a) The department shall develop and administer the
Energy Efficiency Low-Income Weatherization Program and
expend moneys appropriated by the Legislature for the proposes
of the program.

(b) The department may develop requirements, guidelines, and
subgrantee contract provisions for the program.

(c) Before a subgrantee contract is executed for the provision
of local service, the department shall do both of the following:

(1) No less than 30 days before finalization of the program
guidelines, post the draft program guidelines on the department’s
Internet Web site.

(2) Hold a public hearing to obtain public input on the draft
program guidelines with notice of the hearing published
prominently on the department’s Internet Web site no less than 15
days before the hearing.

(d) Chapter 3.5 (commencing with Section 11340) of Part 1
does not apply to the development and adoption of program
requirements, guidelines, and subgrantee contract provisions
pursuant to this section.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 16428.9 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

16428.9.  

(a) Prior to expending any moneys appropriated to
it by the Legislature from the fund, a state agency shall prepare a
record consisting of all of the following:

(1) A description of each expenditure proposed to be made by
the state agency pursuant to the appropriation.

(2) A description of how a proposed expenditure will further
the regulatory purposes of Division 25.5 (commencing with Section
38500) of the Health and Safety Code, including, but not limited
to, the limit established under Part 3 (commencing with Section
38550) and other applicable requirements of law.

(3) A description of how a proposed expenditure will contribute
to achieving and maintaining greenhouse gas emission reductions
pursuant to Division 25.5 (commencing with Section 38500) of
the Health and Safety Code.

(4) A description of how the state agency considered the
applicability and feasibility of other nongreenhouse gas reduction
objectives of Division 25.5 (commencing with Section 38500) of
the Health and Safety Code.

(5) A description of how the state agency will document the
result achieved from the expenditure to comply with Division 25.5
(commencing with Section 35800) of the Health and Safety Code.

begin insert

(b) The State Air Resources Board shall develop guidance on
reporting and quantification methods for all state agencies that
receive appropriations from the fund to ensure the requirements
of this section are met. Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 does not apply to the procedures
developed pursuant to this subdivision.

end insert begin delete

(b)

end delete

begin insert (c) end insert  Nothing in this section alters, amends, or otherwise modifies
in any manner Division 25.5 (commencing with Section 35800)
of the Health and Safety Code, including the authority of the State
Air Resources Board to adopt and implement a fee pursuant to that
division.

begin delete

(c)

end delete

begin insert (d) end insert  If any expenditure of moneys from the fund for any measure
or project is determined by a court to be inconsistent with law, the
funding for the remaining measures or projects shall be severable
and shall not be affected.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 19602.8 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 19602.8. end insert   

(a) Notwithstanding Section 18900, 18901, 18930,
18930.5, 18931, 18933, 18938.5, 18950, 19050, 19054.1, 19057.2,
19604, 19605, or any other law, but consistent with the merit
principles of subdivision (b) of Section 1 of Article VII of the
California Constitution, the Department of Forestry and Fire
Protection appointing authority may conduct examinations and
make appointments as specified in subdivision (b). The purpose
of this section is to provide the Department of Forestry and Fire
Protection with greater flexibility to match candidates to Forester
Series and Forestry Assistant classification vacancies, resulting
in an expedited selection process, cost avoidances to the
department, and a more expedited timeframe to carry out the
people’s business.

(b) The appointing authority of Department of Forestry and
Fire Protection may conduct a demonstration project consistent
with the authority in Section 19603 for competitive examinations
on a position specific basis for the Forester Series and Forestry
Assistant classifications and make appointments to positions based
on a merit process open to all persons meeting specific minimum
qualifications as agreed to by the board.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 39711 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

39711.  

begin insert (a) end insert begin insert   end insert The California Environmental Protection Agency
shall identify disadvantaged communities for investment
opportunities related to this chapter. These communities shall be
identified based on geographic, socioeconomic, public health, and
environmental hazard criteria, and may include, but are not limited
to, either of the following:

begin delete

(a)

end delete

begin insert (1) end insert  Areas disproportionately affected by environmental pollution
and other hazards that can lead to negative public health effects,
exposure, or environmental degradation.

begin delete

(b)

end delete

begin insert (2) end insert  Areas with concentrations of people that are of low income,
high unemployment, low levels of homeownership, high rent
burden, sensitive populations, or low levels of educational
attainment.

begin insert

(b) The California Environmental Protection Agency shall hold
at least one public workshop prior to the identification of
disadvantaged communities pursuant to this section.

end insert begin insert

(c) Chapter 3.5 (commencing with Section 11340) of the Part
1 of Division 3 of Title 2 of the Government Code does not apply
to the identification of disadvantaged communities pursuant to
this section.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 39715 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

39715.  

begin delete Any end delete begin insert (a) end insert begin insert   end insert begin insert The state board, in consultation with the
California Environmental Protection Agency shall develop end insert funding
guidelines begin delete developed end delete for administering begin delete agencies, pursuant to
Section 39714, end delete begin insert agencies that receive appropriations from the fund
to ensure the requirements of this chapter are met. The guidelines end insert
shall include begin delete guidelines end delete begin insert a component end insert for how administering
agencies should maximize benefits for disadvantaged communities,
as described in Section 39711.

begin insert

(b) The state board shall provide an opportunity for public input
prior to finalizing the guidelines.

end insert begin insert

(c) Chapter 3.5 (commencing with Section 11340) of the Part
1 of Division 3 of Title 2 of the Government Code does not apply
to the guidelines developed pursuant to this section.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 39719 is added to the end insert begin insert Health and Safety Code end insert begin insert ,
to read: end insert

begin insert

begin insert 39719. end insert   

(a) The Legislature shall appropriate the annual
proceeds of the fund for the purpose of reducing greenhouse gas
emissions in this state in accordance with the requirements of
Section 39712.

(b) To carry out a portion of the requirements of subdivision
(a), annual proceeds are continuously appropriated for the
following:

(1) Beginning in the 2015-16 fiscal year, and notwithstanding
Section 13340 of the Government Code, 35 percent of annual
proceeds are continuously appropriated, without regard to fiscal
years, for transit, affordable housing, and sustainable communities
programs as following:

(A) Ten percent of the annual proceeds of the fund is hereby
continuously appropriated to the Transportation Agency for the
Transit and Intercity Rail Capital Program created by Part 2
(commencing with Section 75220) of Division 44 of the Public
Resources Code.

(B) Five percent of the annual proceeds of the fund is hereby
continuously appropriated to the Low Carbon Transit Operations
Program created by Part 3 (commencing with Section 75230) of
Division 44 of the Public Resources Code. Funds shall be allocated
by the Controller, according to requirements of the program, and
pursuant to the distribution formula in subdivision (b) or (c) of
Section 99312 of, and Sections 99313 and 99314 of, the Public
Utilities Code.

(C) Twenty percent of the annual proceeds of the fund is hereby
continuously appropriated to the Strategic Growth Council for
the Affordable Housing and Sustainable Communities Program
created by Part 1 (commencing with Section 75200) of Division
44 of the Public Resources Code. Of the amount appropriated in
this subparagraph, no less than 10 percent of the annual proceeds,
shall be expended for affordable housing, consistent with the
provisions of that program.

(2) Beginning in the 2015-16 fiscal year, notwithstanding
Section 13340 of the Government Code, 25 percent of the annual
proceeds of the fund is hereby continuously appropriated to the
High-Speed Rail Authority for the following components of the
initial operating segment and Phase I Blended System as described
in the 2012 business plan adopted pursuant to Section 185033 of
the Public Utilities Code:

(A) Acquisition and construction costs of the project.

(B) Environmental review and design costs of the project.

(C) Other capital costs of the project.

(D) Repayment of any loans made to the authority to fund the
project.

(c) In determining the amount of annual proceeds of the fund
for purposes of the calculation in subdivision (b), the funds subject
to Section 39719.1 shall not be included.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 39719.1 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 39719.1. end insert   

(a) Of the amount loaned from the fund to the General
Fund pursuant to Item 3900-011-3228 of Section 2.00 of the Budget
Act of 2013, four hundred million dollars ($400,000,000) shall be
available to the High-Speed Rail Authority pursuant to subdivision
(b).

(b) The portion of the loan from the fund to the General Fund
described in subdivision (a) shall be repaid to the fund as necessary
based on the financial needs of the high-speed rail project.
Beginning in the 2015-16 fiscal year, and in order to carry out
the goals of the fund in accordance with the requirements of
Section 39712, the amounts of all the loan repayments,
notwithstanding Section 13340 of the Government Code, are
continuously appropriated from the fund to the High-Speed Rail
Authority for the following components of the initial operating
segment and Phase I Blended System as described in the 2012
business plan adopted pursuant to Section 185033 of the Public
Utilities Code:

(1) Acquisition and construction costs of the project.

(2) Environmental review and design costs of the project.

(3) Other capital costs of the project.

(4) Repayment of any loans made to the authority to fund the
project.

end insert

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 44091.1 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

44091.1.  

Commencing January 1, 2005, the fee specified in
paragraph (1) of subdivision (d) of Section 44060 shall be twelve
dollars ($12). The revenues from that fee shall be allocated as
follows:

(a) The revenues generated by six dollars ($6) of the fee shall
be deposited in the Air Pollution Control Fund, and shall be
available for expenditure, upon appropriation by the Legislature,
to fund the Carl Moyer Memorial Air Quality Standards Attainment
Program (Chapter 9 (commencing with Section 44275)) to the
extent that the state board or a participating district determines the
moneys are expended to mitigate or remediate the harm caused by
the type of motor vehicle on which the fee is imposed.

(b) (1) Except as provided for in paragraph (2), of the revenue
generated by the remaining six dollars ($6) of the fee, four dollars
($4) shall be deposited in the account created by Section 44091,
while the revenue generated by the remaining two dollars ($2)
shall be deposited in the Vehicle Inspection and Repair begin delete Fund. end delete begin insert Fund
and may be expended, upon appropriation, for, among other things,
the Clean Vehicle Rebate Project established as a part of the Air
Quality Improvement Program pursuant to Article 3 (commencing
with Section 44274) of Chapter 8.9. end insert

(2) All revenue generated by the remaining six dollars ($6) of
the fee described in this subdivision that is imposed at first
registration of a motor vehicle and that is exempted under
paragraph (4) of subdivision (a) of Section 44011 shall be deposited
in the account created by Section 44091.

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 4475 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

4475.  

(a) The director may enter into an agreement, including
a grant agreement, for prescribed burning or other hazardous fuel
reduction that is consistent with this chapter and the regulations
of the board with either the owner or any other person who has
legal control of any begin delete property or end delete begin insert property, end insert any public agency with
regulatory or natural resource management authority over any
property that is included within any wild land begin insert , or any nonprofit
organization end insert for any of the following purposes, or any combination
of those purposes:

(1) Prevention of high-intensity wild land fires through reduction
of the volume and continuity of wild land fuels.

(2) Watershed management.

(3) Range improvement.

(4) Vegetation management.

(5) Forest improvement.

(6) Wildlife habitat improvement.

(7) Air quality maintenance.

(b) An agreement shall not be entered into pursuant to this
section unless the director determines that the public benefits
estimated to be derived from the prescribed burning or other
hazardous fuel reduction pursuant to the agreement will be equal
to or greater than the foreseeable damage that could result from
the prescribed burning or other hazardous fuel reduction.

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Article 7.8 (commencing with Section 4598) is added
to Chapter 8 of Part 2 of Division 4 of the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

begin insert

 

Article begin insert 7.8. end insert   Program Timberland Environmental Impact Report
for Carbon Sequestration and Fuel Reduction Program

 

begin insert 4598. end insert   

The Legislature finds and declares all of the following:

(a) In order to meet the goals of the California Global Warming
Solutions Act of 2006 (Division 25.5 (commencing with Section
38500) of the Health and Safety Code), it is necessary to increase
the carbon sequestration potential of California’s timberlands and
to decrease carbon emissions from wildland fires.

(b) Over one-half of the privately owned, commercial timberland
in the state is owned by nonindustrial landowners. These lands
will be increasingly important in the state’s efforts to meet the
goals of the California Global Warming Solutions Act of 2006.
The owners of these lands often lack the forestry expertise,
economic incentive, or capital needed to make investments to
decrease present and future greenhouse gas emissions from their
lands and the potential for wildland fires that release greenhouse
gases.

(c) Long-term uneven-aged management of private timberlands
within the state and the retention of large, old trees can increase
the ability of timberlands to sequester carbon through increased
growth and inventory and to convert carbon into oxygen through
photosynthesis.

(d) Prudent management of timberlands can decrease the
potential for large wildland fires, that release greenhouse gases,
by creating forests that are less susceptible to ignition and that
reduce the intensity of wildland fires, thereby allowing for more
successful fire suppression efforts.

(e) Recent projects have demonstrated the benefits of pursuing
program timberland environmental impact reports (PTEIRs), which
provide better long-term management guidance for forests than
single-project timber harvest plans.

(f) The state has an interest in securing the carbon sequestration
and fire protection benefits of prudent long-term management of
timberlands owned by nonindustrial landowners.

begin insert 4598.1. end insert   

(a) The purpose of this article is to encourage private
investments in, and improved long-term management of,
timberlands and resources within the state to promote carbon
sequestration through increased timber growth and inventory,
reduced carbon emissions from wildland fires by creating fire
resiliency on private timberlands, and the protection, maintenance,
and enhancement of a productive and stable forest resource system
for the benefit of present and future generations.

(b) The primary emphasis of the program established by this
article shall be upon increasing carbon sequestration in
timberlands and reducing carbon emissions from wildland fires;
provided that, consistent with this primary emphasis, the program
shall also be managed to maintain or improve all forest resources,
such as fish and wildlife habitat and soil resources, so that the
overall effect of the program is to improve the total forest resource
system.

begin insert 4598.2. end insert   

(a) In furtherance of the purposes of this article, the
department may enter into agreements and make grants and take
other actions necessary to carry out the purposes of this article.

(b) (1) The PTEIR for carbon sequestration and fuel reduction
program conducted by the department shall encourage forest
resource improvements and otherwise facilitate good timberland
management through a program of financial and technical
assistance to smaller nonindustrial landowners and coalitions of
smaller nonindustrial landowners for the development of
watershed-specific PTEIRs for watersheds where the primary focus
of the contemplated work is reduction of greenhouse gases.

(2) The purpose of this program shall be to work cooperatively
with public and private landowners, particularly smaller
nonindustrial landowners, to upgrade the long-term management
of their lands and, thereby improve the ability of their lands to
both sequester carbon and to resist wildland fires that cause
emissions of carbon.

begin insert 4598.3. end insert   

As used in this article, the following terms shall have
the following meanings:

(a) “Eligible landowner” means any person who meets the
conditions set forth in Sections 4598.6 and 4598.8. Where
ownership of timberland and timber are not held by the same
person, “landowner” means either the person or persons owning
the land or the person or persons owning the timber.

(b) “Timberland” has the same meaning as defined in Section
4526.

(c) “PTEIR” means a program timberland environmental impact
report prepared pursuant to this article and Article 6.8
(commencing with Section 1092) of Title 14 of the California Code
of Regulations.

(d) “Smaller nonindustrial landowner” means an owner of
5,000 acres or less of timberland within the state.

begin insert 4598.4. end insert   

Agreements may be entered into and grants may be
made by the director pursuant to this article for the purpose of
preparing PTEIRs for projects that demonstrate potential to
increase carbon sequestration, decrease atmospheric carbon levels,
and reduce the potential for large wildland fires.

begin insert 4598.5. end insert   

(a) The director may enter into agreements, on behalf
of eligible landowners, pursuant to which the department will
undertake the preparation of PTEIRs. The department may enter
into agreements with the Department of General Services or
third-party consultants to assist in the preparation of PTEIRs.

(b) The department may provide grant funds to eligible
landowners in amounts not to exceed the direct costs to the eligible
landowners of preparing PTEIRs pursuant to this article.

(c) The department shall pay the costs of preparing the PTEIRs,
or provide grant funds to eligible landowners, from funds
appropriated to the department from the Greenhouse Gas
Reduction Fund, pursuant to Section 39718 of the Health and
Safety Code.

(d) All expenditures made by the department pursuant to this
article shall be in a manner consistent with the criteria expressed
in Section 39712 of the Health and Safety Code and with the
investment plan developed by the Department of Finance pursuant
to Section 39716 of the Health and Safety Code.

begin insert 4598.6. end insert   

To be eligible for participation in an agreement or
grant pursuant to Section 4598.5, the following conditions shall
be met:

(a) The application requirements established by the board are
satisfied.

(b) The landowner is a smaller nonindustrial landowner, as
defined in Section 4598.3. Where the timberland is owned jointly
by more than one individual, group, association, or corporation,
as joint tenants, tenants in common, tenants by the entirety, or
otherwise, the joint owners shall be considered, for the purposes
of this article, as one landowner.

(c) The parcel or parcels of timberland to which the PTEIR
shall apply is either:

(1) Within a timber preserve zone established pursuant to Article
6.7 (commencing with Section 51100) of Part 1 of Division 1 of
Title 5 of the Government Code; provided, that the parcel of
timberland is not the subject of an application for rezoning or
immediate rezoning pursuant to Section 51120 or 51130 of the
Government Code.

(2) Subject to a contract signed by the landowner providing
that the landowner agrees not to develop the parcel of timberland
for uses incompatible with the PTEIR within 20 years following
the execution of an agreement or the making of a grant pursuant
to Section 4598.5. The director shall record the contract in the
office of the county recorder in the county in which the parcel of
timberland is located and, upon recordation, the contract shall be
binding upon any person to whom the parcel of timberland is sold,
assigned, devised, or otherwise transferred by agreement or
operation of law.

begin insert 4598.7. end insert   

Payments or grants pursuant to this article may be
made for work that is also the subject of payments or other
assistance provided pursuant to federal law; provided, that
payments or grants shall not be made pursuant to this article to
satisfy landowner cost share requirements of, or repay loans
received pursuant to, federal law; and provided, further, that the
combined state and federal payments or other assistance do not
together exceed the amount of the actual cost of the PTEIR to the
landowner.

begin insert 4598.8. end insert   

In addition to the requirements of Section 4598.6, to
be eligible to participate in agreements or receive grants pursuant
to Section 4598.5, the landowner shall do all of the following:

(a) Submit a proposal to the department detailing the long-term
forest and land management plans for approval by the director.
The proposal shall set forth an analysis of timberland conditions
and capabilities relative to carbon sequestration and fire resiliency.
The proposal shall describe the management objectives and shall
provide for all of the following:

(1) Increased direct carbon sequestration through increased
growth and inventory and long-term uneven-aged management of
the timberlands.

(2) Improved resistance to wildland fire.

(3) Maintenance of large old trees across the watershed.

(4) Optimized timber growth potential of the timberland
consistent with maintaining carbon additionally over the baseline.

(5) Measurable metrics demonstrating greenhouse gas
reductions achieved by the long-term management to be analyzed
in the PTEIR.

(b) Submit a project application in the form prescribed by the
director containing information the board deems necessary to
evaluate the PTEIR.

(c) Agree to comply with state or federal laws applicable to the
work carried out pursuant to any program timber harvesting plan
developed pursuant to a PTEIR.

(d) Agree to provide to the department, upon completion of each
program timber harvesting plan undertaken pursuant to a PTEIR,
a report detailing greenhouse gas reductions achieved by the plan.

(e) Agree to provide to the department any data or metrics on
greenhouse gas reductions as required by law.

begin insert 4598.9. end insert   

To carry out this article and to facilitate participation
in the program authorized by this article, the board may
promulgate regulations, guidelines, or publications the board
deems appropriate. Regulations promulgated by the board may
be adopted as emergency regulations. Regulations or emergency
regulations adopted pursuant to this section shall be adopted in
accordance with the rulemaking provisions of the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code). The
adoption of emergency regulations shall be deemed an emergency
and necessary for the immediate preservation of the public peace,
health, and safety, or general welfare. The regulations, guidelines,
or publications shall be submitted to the board for review or
approval. Regulations, guidelines, or publications shall specify
all of the following:

(a) Criteria to determine timberlands that have demonstrated
potential for increased carbon sequestration and fire protection
benefits and, therefore, the landowners of those lands may be
eligible to enter into agreements or receive grant funds under
Section 4598.5.

(b) Guidelines further specifying the scope of projects for which
agreements may be entered into or grants made pursuant to this
article.

(c) Factors to be considered and information to be included in
proposals submitted pursuant to Section 4598.8.

(d) A standard application form for proposals submitted
pursuant to Section 4598.8.

(e) Guidelines for evaluation and approval of proposals to enter
into agreements or receive grant funds under Section 4598.5.

(f) Metrics for evaluating the greenhouse gas reductions to be
achieved by the long-term management of the timberlands pursuant
to the PTEIR.

(g) The form and content of reports detailing greenhouse gas
reductions as required by Section 4598.8.

(h) Any other matters as the board deems necessary for the
effective administration of this article.

end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 12292 of the end insert begin insert Public Resources Code end insert begin insert is
repealed. end insert

begin delete

12292.  

This division shall remain in effect only until January
1, 2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.

end delete

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert The heading of Chapter 5.7 (commencing with Section
25470) of Division 15 of the end insert begin insert Public Resources Code end insert begin insert is amended
to read: end insert

 

Chapter  5.7. Energy Efficient State Property Revolving
Fund begin insert and Energy Efficiency Retrofit State Revolving Fund end insert

 

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 25470 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

25470.  

As used in this chapter:

(a) “Act” means the federal American Recovery and
Reinvestment Act of 2009 (Public Law 111-5).

(b) “Allocation” means a loan of funds by the Department of
General Services pursuant to the procedures specified in this
chapter.

(c) “Building” means any existing structure that includes a
heating or cooling system, or both. Additions to an existing
building shall be considered part of that building rather than a
separate building.

(d) “Department” means the Department of General Services.

(e) “Energy audit” means a determination of the energy
consumption characteristics of a building that does all of the
following:

(1) Identifies the type, size, and energy use level of the building
and the major energy using systems of the building.

(2) Determines appropriate energy conservation maintenance
and operating procedures.

(3) Indicates the need, if any, for the acquisition and installation
of energy conservation measures.

(f) “Energy conservation maintenance and operating procedure”
means a modification or modifications in the maintenance and
operations of a building, and any installations therein, based on
the use time schedule of the building that are designed to reduce
energy consumption in the building and that require no significant
expenditure of funds.

(g) “Energy conservation measure” means an installation or
modification of an installation in a building that is primarily
intended to reduce energy consumption or allow the use of a more
cost-effective energy source.

(h) “Energy conservation project” means an undertaking to
acquire and to install one or more energy conservation measures
in a building, and technical assistance in connection with that
undertaking.

(i) “Fund” means the Energy Efficient State Property Revolving
begin insert Fund or the Energy Efficiency Retrofit State Revolving end insert Fund.

(j) “Project” means a purpose for which an allocation may be
requested and made under this chapter. Those purposes shall
include energy audits, energy conservation and operating
procedures, and energy conservation measures in existing
buildings, and energy conservation projects.

(k) “State agency” means a unit of state government, including
any department, agency, board, or commission under the State of
California.

(l) “State-owned building” means a building that is primarily
occupied by offices or agencies of a unit of state government and
includes those properties owned by the State of California.

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 25471.5 is added to the end insert begin insert Public Resources
Code end insert begin insert , to read: end insert

begin insert

begin insert 25471.5. end insert   

There is hereby established in the State Treasury the
Energy Efficiency Retrofit State Revolving Fund for the purposes
of implementing this chapter. Notwithstanding Section 13340 of
the Government Code, moneys in the Energy Efficiency Retrofit
State Revolving Fund are continuously appropriated to the
department without regard to fiscal years for loans for projects
in or on State-owned buildings and facilities to implement energy
efficiency retrofit projects and to utilize renewable energy
technology to achieve energy efficiency, reduce emissions of
greenhouse gases, and reduce grid-based electricity purchases.

end insert

begin insert

begin insert SEC. 16. end insert   

end insert

begin insert Section 25472 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

25472.  

(a) The department, in consultation with the
commission, shall establish a process by which projects are
identified and funding is allocated.

(b)  begin delete Beginning July 1, 2009, the end delete begin insert The end insert department shall use money
in the fund for projects that will improve long-term energy
efficiency and increase energy use savings.

(c) The department shall comply with the requirements of the
act and implementing guidelines of the commission, including,
but not limited to, performance metrics, data collection, and
reporting. All projects begin delete must end delete begin insert shall end insert be consistent with these
requirements and guidelines.

(d) Funding prioritization shall be granted to those projects that
are cost-effective and will yield immediate and sustainable energy
efficiency, energy conservation, energy use cost savings, and cost
avoidance.

(e) The department shall fund allowable projects through a loan
to the appropriate state agency or agencies occupying the building
or facility for which the project will be performed.

(f) The department shall determine a reasonable loan repayment
schedule that begin delete may end delete begin insert shall end insert not exceed the life of the energy
conservation measure equipment, as determined by the department,
or the lease term of the building in which the energy conservation
measure is installed.

(g) Maximum loan amounts shall be based on estimated energy
cost savings that will allow state agencies to repay loan principal
and interest within the maximum repayment term specified in this
section.

(h) The department shall periodically set interest rates on the
loans based on surveys of existing financial markets and at rates
of not less than 1 percent per annum.

(i) Annual loan repayment amounts shall be structured so as to
reflect the projected annualized energy cost avoidance estimated
from the completed project. The department may utilize a direct
billing methodology to recover loan repayments for completed
projects.

begin insert

begin insert SEC. 17. end insert   

end insert

begin insert Section 25474 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

25474.  

(a) Any repayment of loans made pursuant to this
begin delete chapter, end delete begin insert chapter from the Energy Efficient State Property Revolving
Fund, end insert including interest payments, and all interest earnings on or
accruing to, any money resulting from the implementation of this
chapter in the Energy Efficient State Property Revolving Fund,
shall be deposited in that fund and shall be available for the
purposes of this chapter.

(b) The department may recover costs of administering the
projects and related costs through begin delete energy utility rebates awarded
to the state agency as a result of completed projects end delete begin insert interest
earnings end insert up to 5 percent of the project loan amounts. Project costs
can include energy efficiency improvements and costs associated
with managing the project and administering the loan program,
including all reporting requirements.

begin insert

begin insert SEC. 18. end insert   

end insert

begin insert Section 25474.5 is added to the end insert begin insert Public Resources
Code end insert begin insert , to read: end insert

begin insert

begin insert 25474.5. end insert   

(a) Notwithstanding Section 39718 of the Health and
Safety Code, any repayment of loans made pursuant to this chapter
from the Energy Efficiency Retrofit State Revolving Fund, including
interest payments, and all interest earnings on or accruing to, any
money resulting from the implementation of this chapter in the
Energy Efficiency Retrofit State Revolving Fund, shall be deposited
in that fund and shall be available for the purposes of this chapter.

(b) The department may recover costs of administering the
projects and related costs through interest earnings up to 5 percent
of the project loan amounts. Project costs can include energy
efficiency improvements and costs associated with managing the
project and administering the loan program, including all reporting
requirements.

end insert

begin insert

begin insert SEC. 19. end insert   

end insert

begin insert Chapter 22 (commencing with Section 42995) is
added to Part 3 of Division 30 of the end insert begin insert Public Resources Code end insert begin insert , to
read: end insert

begin insert

 

Chapter   begin insert 22. end insert Waste Diversion and Greenhouse Gas
Reduction Financial Assistance

 

begin insert 42995. end insert   

For purposes of this chapter, the following terms have
the following meanings:

(a) “Loan fund” means the CalRecycle Greenhouse Gas
Reduction Revolving Loan Fund established pursuant to Section
42996.

(b) “Revolving loan program” means the CalRecycle
Greenhouse Gas Reduction Revolving Loan Program established
pursuant to Section 42997.

begin insert 42996. end insert   

(a) The CalRecycle Greenhouse Gas Reduction
Revolving Loan Fund is hereby created in the State Treasury.

(b) Notwithstanding Section 13340 of the Government Code
and Section 39718 of the Health and Safety Code, the funds
deposited in the loan fund are hereby continuously appropriated,
without regard to fiscal year, to the department for expenditure
without regard to fiscal year.

(c) The sum of five million dollars ($5,000,000) is hereby
transferred from the Greenhouse Gas Reduction Fund, established
pursuant to Section 16428.8 of the Government Code, to the loan
fund for the 2014-15 fiscal year and an additional five million
dollars ($5,000,000) for the 2015-16 fiscal year to be used by the
department for any of the following:

(1) To make loans pursuant to the revolving loan program.

(2) To pay costs necessary to protect the state’s position as a
lender and creditor. These costs shall include, but are not limited
to, foreclosure expenses, auction fees, title searches, appraisals,
real estate brokerage fees, attorney’s fees, mortgage payments,
insurance payments, utility costs, repair costs, removal and storage
costs for repossessed equipment and inventory, and additional
expenditures to purchase a senior lien in foreclosure or bankruptcy
proceedings.

(3) To pay costs to administer the revolving loan program, upon
appropriation by the Legislature.

(d) The Controller shall disburse moneys in the loan fund for
the purposes of this chapter, as authorized by the department.

begin insert 42997. end insert   

(a) The CalRecycle Greenhouse Gas Reduction
Revolving Loan Program is hereby established and shall be
administered by the department.

(b) (1) The department shall expend the moneys transferred
pursuant to subdivision (c) of Section 42996, and any additional
moneys appropriated by the Legislature for the purposes of this
subdivision, to provide loans to reduce greenhouse gas emissions
by promoting in-state development of infrastructure to process
organics and other recyclable materials into new value-added
products. The moneys shall be expended consistent with the
requirements of Article 9.7 (commencing with Section 16428.8)
of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government
Code and Chapter 4.1 (commencing with Section 39710) of Part
2 of Division 26 of the Health and Safety Code.

(2) For a loan made pursuant to this subdivision, the department
shall expend the moneys in the loan fund to provide loans to public
and private entities located in the state for any of the following:

(A) Organics composting.

(B) Anaerobic digestion.

(C) Recyclable material manufacturing infrastructure projects
or other related activities that reduce greenhouse gas emissions.

(3) For purposes of this subdivision, eligible infrastructure
projects that reduce greenhouse gas emissions include, but are
not limited to, any of the following:

(A) Capital investments in new facilities and increased
throughput at existing facilities for activities, such as converting
windrow composting to aerated-static-pile composting to use food
waste as feedstock.

(B) Designing and constructing anaerobic digestion facilities
to produce biofuels and bioenergy.

(C) Designing and constructing facilities for processing
recyclable materials.

(4) For a loan made pursuant to this subdivision, both of the
following apply:

(A) The terms and conditions of an approved loan shall be
specified in a loan agreement and related documents between the
borrower and the department. These terms and conditions shall
include reporting requirements that include, but are not limited
to, reporting the information specified in Section 16428.9 of the
Government Code.

(B) The department shall approve only those loan applications
that demonstrate the applicant’s ability to repay the loan.

(5) The department may establish additional requirements that
it determines to be necessary or useful to achieve the revolving
loan program’s objectives, including, but not limited to, ensuring
repayment ability.

begin insert 42998. end insert   

(a) The department may establish and collect fees to
fund the costs of administering the revolving loan program,
including, but not limited to, an application fee and loan closing
points.

(b) Moneys collected by the department from loan repayments
and fees shall be deposited in the loan fund. Loan repayments and
fees include, but are not limited to, any of the following:

(1) Principal and interest repayments.

(2) Fees and loan closing points.

(3) Recovery of collection costs.

(4) Income earned on an asset recovered pursuant to a loan
default.

(5) Moneys collected through foreclosure and other collection
actions.

begin insert 42999. end insert   

(a) Any additional funds appropriated by the
Legislature from the Greenhouse Gas Reduction Fund, established
pursuant to Section 16428.8 of the Government Code, to the
department shall be used to administer a grant program to provide
financial assistance to reduce greenhouse gas emissions by
promoting in-state development of infrastructure to process
organics and other recyclable materials into new value-added
products. The moneys shall be expended consistent with the
requirements of Article 9.7 (commencing with Section 16428.8)
of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government
Code and Chapter 4.1 (commencing with Section 39710) of Part
2 of Division 26 of the Health and Safety Code.

(b) For a grant made pursuant to this section, the department
shall expend the moneys to provide grants, incentive payments,
contracts, or other funding mechanisms to public and private
entities located in the state for any of the following:

(1) Organics composting.

(2) Anaerobic digestion.

(3) Recyclable material manufacturing infrastructure projects
or other related activities that reduce greenhouse gas emissions.

(c) For purposes of this section, eligible infrastructure projects
that reduce greenhouse gas emissions include, but are not limited
to, any of the following:

(1) Capital investments in new facilities and increased
throughput at existing facilities for activities, such as converting
windrow composting to aerated-static-pile composting to use food
waste as feedstock.

(2) Designing and constructing anaerobic digestion facilities
to produce biofuels and bioenergy.

(3) Designing and constructing facilities for processing
recyclable materials.

end insert

begin insert

begin insert SEC. 20. end insert   

end insert

begin insert Section 75121 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

75121.  

(a) The Strategic Growth Council is hereby established
in state government and it shall consist of the Director of State
Planning and Research, the Secretary of the Natural Resources
Agency, the Secretary for Environmental Protection, the Secretary
of Transportation, the Secretary of California Health and Human
Services, the Secretary of Business, Consumer Services, and
Housing, the Secretary of Food and Agriculture, begin insert one member of
the public appointed by the Speaker of the Assembly, one member
of the public appointed by the Senate Committee on Rules, end insert and
one member of the public to be appointed by the Governor. The
public begin delete member end delete begin insert members end insert shall have a background in land use
planning, local government, resource protection and management,
or community development or begin delete revitalization. end delete begin insert revitalization and
shall serve at the pleasure of the appointing authority. end insert

(b) Staff for the council shall be reflective of the council’s
membership.

begin insert

begin insert SEC. 21. end insert   

end insert

begin insert Division 44 (commencing with Section 75200) is
added to the end insert begin insert Public Resources Code end insert begin insert , to read: end insert

begin insert

 

Division  begin insert 44. end insert   Transit, Affordable Housing, and
Sustainable Communities Program

 

PART  begin insert 1. end insert   Affordable Housing and Sustainable
Communities

 

Chapter   begin insert 1. end insert General Provisions

 

begin insert 75200. end insert   

For the purposes of this part, the following terms have
the following meanings:

(a) “Council” means the Strategic Growth Council established
pursuant to Section 75121.

(b) “Disadvantaged communities” means communities identified
as disadvantaged communities pursuant to Section 39711 of the
Health and Safety Code.

(c) “Program” means the Affordable Housing and Sustainable
Communities Program established pursuant to Section 75210.

begin insert 75200.1. end insert   

Consistent with Section 75125, the council, in
consultation with the State Air Resources Board, shall review and
coordinate the activities of member agencies of the council for the
programs included in this part. The council shall review these
programs, including grant guidelines of each program, consistent
with Chapter 4.1 (commencing with Section 39710) of Part 2 of
Division 26 of the Health and Safety Code, including the
recommendations of the investment plan, Article 9.7 (commencing
with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title
2 of the Government Code, and Chapter 4.2 (commencing with
Section 21155) of Division 13 of this code.

 

Chapter   begin insert 2. end insert Affordable Housing and Sustainable
Communities Program

 

begin insert 75210. end insert   

The council shall develop and administer the Affordable
Housing and Sustainable Communities Program to reduce
greenhouse gas emissions through projects that implement land
use, housing, transportation, and agricultural land preservation
practices to support infill and compact development, and that
support related and coordinated public policy objectives, including
the following:

(a) Reducing air pollution.

(b) Improving conditions in disadvantaged communities.

(c) Supporting or improving public health and other cobenefits
as defined in Section 39712 of the Health and Safety Code.

(d) Improving connectivity and accessibility to jobs, housing,
and services.

(e) Increasing options for mobility, including the implementation
of the Active Transportation Program established pursuant to
Section 2380 of the Streets and Highways Code.

(f) Increasing transit ridership.

(g) Preserving and developing affordable housing for lower
income households, as defined in Section 50079.5 of the Health
and Safety Code.

(h) Protecting agricultural lands to support infill development.

begin insert 75211. end insert   

To be eligible for funding pursuant to the program, a
project shall do all of the following:

(a) Demonstrate that it will achieve a reduction in greenhouse
gas emissions.

(b) Support implementation of an adopted or draft sustainable
communities strategy or, if a sustainable communities strategy is
not required for a region by law, a regional plan that includes
policies and programs to reduce greenhouse gas emissions.

(c) Demonstrate consistency with the state planning priorities
established pursuant to Section 65041.1 of the Government Code.

begin insert 75212. end insert   

Projects eligible for funding pursuant to the program
include any of the following:

(a) Intermodal, affordable housing projects that support infill
and compact development.

(b) Transit capital projects and programs supporting transit
ridership.

(c) Active transportation capital projects that qualify under the
Active Transportation Program, including pedestrian and bicycle
facilities and supportive infrastructure, including connectivity to
transit stations.

(d) Noninfrastructure-related active transportation projects
that qualify under the Active Transportation Program, including
activities that encourage active transportation goals conducted in
conjunction with infrastructure improvement projects.

(e) Transit-oriented development projects, including affordable
housing and infrastructure at or near transit stations or connecting
those developments to transit stations.

(f) Capital projects that implement local complete streets
programs.

(g) Other projects or programs designed to reduce greenhouse
gas emissions and other criteria air pollutants by reducing
automobile trips and vehicle miles traveled within a community.

(h) Acquisition of easements or other approaches or tools that
protect agricultural lands that are under pressure of being
converted to nonagricultural uses, particularly those adjacent to
areas most at risk of urban or suburban sprawl or those of special
environmental significance.

(i) Planning to support implementation of a sustainable
communities strategy, including implementation of local plans
supporting greenhouse gas emissions reduction efforts and
promoting infill and compact development.

begin insert 75213. end insert   

A project eligible for funding pursuant to the program
shall be encouraged to promote the objectives of Section 75210,
and economic growth, reduce public fiscal costs, support civic
partnerships and stakeholder engagement, and integrate and
leverage existing housing, transportation, and land use programs
and resources.

begin insert 75214. end insert   

In implementing the program, the council shall support
the goals established pursuant to Chapter 830 of the Statutes of
2012 by ensuring a programmatic goal of expending 50 percent
of program expenditure for projects benefitting disadvantaged
communities. To the extent feasible, the council shall coordinate
outreach to promote access and program participation in
disadvantaged communities.

begin insert 75215. end insert   

(a) Prior to awarding funds under the program, the
council, in coordination with the member agencies and departments
of the council, the State Air Resources Board, and other state
entities, as needed, shall develop guidelines and selection criteria
for the implementation of the program.

(b) Prior to adoption of the guidelines and the selection criteria,
the council shall conduct at least two public workshops to receive
and consider public comments. One workshop shall be held at a
location in northern California and one workshop shall be held
at a location in southern California.

(c) The council shall publish the draft guidelines and selection
criteria on its Internet Web site at least 30 days prior to the public
meetings.

(d) In adopting the guidelines and selection criteria, the council
shall consider the comments from local governments, regional
agencies, and other stakeholders. The council shall conduct
outreach to disadvantaged communities to encourage comments
on the draft guidelines from those communities.

(e) Program guidelines may be revised by the council to reflect
changes in program focus or need. Outreach to stakeholders shall
be conducted, pursuant to subdivisions (a), (b), and (c) before the
council adopts changes to guidelines.

(f) Upon the adoption of the guidelines and selection criteria,
the council shall, pursuant to Section 9795 of the Government
Code, submit copies of the guidelines to the fiscal and appropriate
policy committees of the Legislature.

(g) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to
the development and adoption of the guidelines and selection
criteria pursuant to this section.

begin insert 75216. end insert   

(a) The council shall leverage the programmatic and
administrative expertise of relevant state departments and agencies
in implementing the program.

(b) The council shall coordinate with the metropolitan planning
organizations and other regional agencies to identify and
recommend projects within their respective jurisdictions that best
reflect the goals and objectives of this division.

begin insert 75217. end insert   

The executive director of the council shall report the
progress on the implementation of the program in its annual report
required pursuant to subdivision (e) of Section 75125.

 

PART  begin insert 2. end insert   Transit and Intercity Rail Capital Program

 

begin insert 75220. end insert   

(a) The Transit and Intercity Rail Capital Program is
hereby created to fund capital improvements and operational
investments that will reduce greenhouse gas emissions, modernize
California’s intercity, commuter, and urban rail systems to achieve
all of the following policy objectives:

(1) Reduce greenhouse gas emissions.

(2) Expand and improve rail service to increase ridership.

(3) Integrate the rail service of the state’s various rail operators,
including integration with the high-speed rail system.

(4) Improve rail safety.

(b) The Transportation Agency shall evaluate applications for
funding under the program consistent with the criteria set forth
in this chapter and prepare a list of projects recommended for
funding. The list may be revised at any time.

(c) The California Transportation Commission shall award
grants to applicants pursuant to the list prepared by the
Transportation Agency.

begin insert 75221. end insert   

(a) Projects eligible for funding under the program
include, but are not limited to, all of the following:

(1) Rail capital projects, including acquisition of rail cars and
locomotives, that expand, enhance, and improve existing rail
systems and connectivity to existing and future rail systems,
including the high-speed rail system.

(2) Intercity and commuter rail projects that increase service
levels, improve reliability, and decrease travel times.

(3) Rail integration implementation, including integrated
ticketing and scheduling systems, shared-use corridors, related
planning efforts, and other service integration initiatives.

(4) Bus rapid transit and other bus transit investments to
increase ridership and reduce greenhouse gas emissions.

(b) In order to be eligible for funding under the program, a
project shall demonstrate that it will achieve a reduction in
greenhouse gas emissions.

(c) The program shall have a programmatic goal of providing
at least 25 percent of available funding to projects benefiting
disadvantaged communities, consistent with the objectives of
Chapter 830 of the Statutes of 2012.

(d) In evaluating grant applications for funding, the
Transportation Agency shall consider both of the following:

(1) The cobenefits of projects that support implementation of
sustainable communities strategies through one or more of the
following:

(A) Reducing auto vehicles miles traveled through growth in
rail ridership.

(B) Promoting housing development in the vicinity of rail
stations.

(C) Expanding existing rail and public transit systems.

(D) Implementing clean vehicle technology.

(E) Promoting active transportation.

(F) Improving public health.

(2) The project priorities developed through the collaboration
of two or more rail operators and any memoranda of understanding
between state agencies and local or regional rail operators.

(3) Geographic equity.

(4) Consistency with the adopted sustainable communities
strategies and the recommendations of regional agencies.

(e) Eligible applicants under the program shall be public
agencies, including joint powers agencies, that operate existing
or planned regularly scheduled intercity or commuter passenger
rail service or urban rail transit service. An eligible applicant may
partner with transit operators that do not operate rail service on
projects to integrate ticketing and scheduling with bus or ferry
service.

(f) A recipient of funds under the program may combine funding
from the program with other funding, including, but not limited
to, the State Transportation Improvement Program, the Low
Carbon Transit Operations Program, the State Air Resources
Board clean vehicle program, and state transportation bond funds.

begin insert 75222. end insert   

(a) Applications for grants under the program shall
be submitted to the Transportation Agency for evaluation in
accordance with procedures and program guidelines adopted by
the agency.

(b) The Transportation Agency shall conduct at least two public
workshops on draft program guidelines containing selection
criteria prior to adoption and shall post the draft guidelines on
the agency’s Internet Web site at least 30 days prior to the first
public workshop. Concurrent with the posting, the agency shall
transmit the draft guidelines to the fiscal committees and to the
appropriate policy committees of the Legislature.

(c) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to
the development and adoption of procedures and program
guidelines for the program pursuant to this section.

 

PART  begin insert 3. end insert   Low Carbon Transit Operations Program

 

begin insert 75230. end insert   

(a) The Low Carbon Transit Operations Program is
hereby created to provide operating and capital assistance for
transit agencies to reduce greenhouse gas emissions and improve
mobility, with a priority on serving disadvantaged communities.

(b) Funding for the program is continuously appropriated
pursuant to Section 39719 of the Health and Safety Code from the
Greenhouse Gas Reduction Fund established pursuant to Section
16428.8 of the Government Code.

(c) Funding shall be allocated by the Controller consistent with
the requirements of this part and with Section 39719 of the Health
and Safety Code, upon a determination by the Department of
Transportation that the expenditures proposed by a transit agency
meet the requirements of this part and guidelines developed
pursuant to subdivision (f), and the amount of funding requested
that is currently available.

(d) Moneys for the program shall be expended to provide transit
operating or capital assistance that meets all of the following
criteria:

(1) Expenditures supporting new or expanded bus or rail
services, or expanded intermodal transit facilities, and may include
equipment acquisition, fueling, and maintenance, and other costs
to operate those services or facilities.

(2) The recipient transit agency demonstrates that each
expenditure directly enhances or expands transit service to increase
mode share.

(3) The recipient transit agency demonstrates that each
expenditure reduces greenhouse gas emissions.

(e) For transit agencies whose service areas include
disadvantaged communities as identified pursuant to Section 39711
of the Health and Safety Code, at least 50 percent of the total
moneys received pursuant to this chapter shall be expended on
projects or services that meet requirements of subdivision (d) and
benefit the disadvantaged communities, consistent with the
guidance developed by the State Air Resources Board pursuant to
Section 39715 of the Health and Safety Code.

(f) The Department of Transportation, in coordination with the
State Air Resources Board, shall develop guidelines that describe
the methodologies that recipient transit agencies shall use to
demonstrate that proposed expenditures will meet the criteria in
subdivisions (d) and (e) and establish the reporting requirements
for documenting ongoing compliance with those criteria.

(g) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to
the development of guidelines for the program pursuant to this
section.

(h) A transit agency shall submit the following information to
the Department of Transportation before seeking a disbursement
of funds pursuant to this part:

(1) A list of proposed expense types for anticipated funding
levels.

(2) The documentation required by the guidelines in developed
pursuant to subdivision (f) to demonstrate compliance with
subdivisions (d) and (e).

(i) Before authorizing the disbursement of funds, the department,
in coordination with the State Air Resources Board, shall determine
the eligibility, in whole or in part, of the proposed list of expense
types, based on the documentation provided by the recipient transit
agency to ensure ongoing compliance with the guidelines developed
pursuant to subdivision (f).

(j) The department shall notify the Controller of approved
expenditures for each transit agency, and the amount of the
allocation for each transit agency determined to be available at
that time of approval.

(k) The recipient transit agency shall provide annual reports to
the Department of Transportation, in the format and manner
prescribed by the department, consistent with the internal
administrative procedures for use of fund proceeds developed by
the State Air Resources Board.

(l) The Department of Transportation and recipient transit
agencies shall comply with the guidelines developed by the State
Air Resources Board pursuant to Section 39715 of the Health and
Safety Code to ensure that the requirements of Section 39714 of
the Health and Safety Code are met to maximize the benefits to
disadvantaged communities as described in Section 39711 of the
Health and Safety Code.

end insert

begin insert

begin insert SEC. 22. end insert   

end insert

begin insert Section 2827 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

2827.  

(a) The Legislature finds and declares that a program
to provide net energy metering combined with net surplus
compensation, co-energy metering, and wind energy co-metering
for eligible customer-generators is one way to encourage substantial
private investment in renewable energy resources, stimulate in-state
economic growth, reduce demand for electricity during peak
consumption periods, help stabilize California’s energy supply
infrastructure, enhance the continued diversification of California’s
energy resource mix, reduce interconnection and administrative
costs for electricity suppliers, and encourage conservation and
efficiency.

(b) As used in this section, the following terms have the
following meanings:

(1) “Co-energy metering” means a program that is the same in
all other respects as a net energy metering program, except that
the local publicly owned electric utility has elected to apply a
generation-to-generation energy and time-of-use credit formula
as provided in subdivision (i).

(2) “Electrical cooperative” means an electrical cooperative as
defined in Section 2776.

(3) “Electric utility” means an electrical corporation, a local
publicly owned electric utility, or an electrical cooperative, or any
other entity, except an electric service provider, that offers electrical
service. This section shall not apply to a local publicly owned
electric utility that serves more than 750,000 customers and that
also conveys water to its customers.

(4)  begin insert (A) end insert begin insert   end insert “Eligible customer-generator” means a residential
customer, small commercial customer as defined in subdivision
(h) of Section 331, or commercial, industrial, or agricultural
customer of an electric utility, who uses a renewable electrical
generation facility, or a combination of those facilities, with a total
capacity of not more than one megawatt, that is located on the
customer’s owned, leased, or rented premises, and is interconnected
and operates in parallel with the electrical grid, and is intended
primarily to offset part or all of the customer’s own electrical
requirements.

begin insert

(B) (i) Notwithstanding subparagraph (A), “eligible
customer-generator” includes the Department of Corrections and
Rehabilitation using a renewable electrical generation technology,
or a combination of renewable electrical generation technologies,
with a total capacity of not more than eight megawatts, that is
located on the department’s owned, leased, or rented premises,
and is interconnected and operates in parallel with the electrical
grid, and is intended primarily to offset part or all of the facility’s
own electrical requirements. The amount of any wind generation
exported to the electrical grid shall not exceed 1.35 megawatt at
any time.

end insert begin insert

(ii) Notwithstanding any other law, an electrical corporation
shall be afforded a prudent but necessary time, as determined by
the executive director of the commission, to study the impacts of
a request for interconnection of a renewable generator with a
capacity of greater than one megawatt under this subparagraph.
If the study reveals the need for upgrades to the transmission or
distribution system arising solely from the interconnection, the
electrical corporation shall be afforded the time necessary to
complete those upgrades before the interconnection and those
costs shall be borne by the customer-generator. Upgrade projects
shall comply with applicable state and federal requirements,
including requirements of the Federal Energy Regulatory
Commission.

end insert

(5) “Large electrical corporation” means an electrical
corporation with more than 100,000 service connections in
California.

(6) “Net energy metering” means measuring the difference
between the electricity supplied through the electrical grid and the
electricity generated by an eligible customer-generator and fed
back to the electrical grid over a 12-month period as described in
subdivisions (c) and (h).

(7) “Net surplus customer-generator” means an eligible
customer-generator that generates more electricity during a
12-month period than is supplied by the electric utility to the
eligible customer-generator during the same 12-month period.

(8) “Net surplus electricity” means all electricity generated by
an eligible customer-generator measured in kilowatthours over a
12-month period that exceeds the amount of electricity consumed
by that eligible customer-generator.

(9) “Net surplus electricity compensation” means a per
kilowatthour rate offered by the electric utility to the net surplus
customer-generator for net surplus electricity that is set by the
ratemaking authority pursuant to subdivision (h).

(10) “Ratemaking authority” means, for an electrical
corporation, the commission, for an electrical cooperative, its
ratesetting body selected by its shareholders or members, and for
a local publicly owned electric utility, the local elected body
responsible for setting the rates of the local publicly owned utility.

(11) “Renewable electrical generation facility” means a facility
that generates electricity from a renewable source listed in
paragraph (1) of subdivision (a) of Section 25741 of the Public
Resources Code. A small hydroelectric generation facility is not
an eligible renewable electrical generation facility if it will cause
an adverse impact on instream beneficial uses or cause a change
in the volume or timing of streamflow.

(12) “Wind energy co-metering” means any wind energy project
greater than 50 kilowatts, but not exceeding one megawatt, where
the difference between the electricity supplied through the electrical
grid and the electricity generated by an eligible customer-generator
and fed back to the electrical grid over a 12-month period is as
described in subdivision (h). Wind energy co-metering shall be
accomplished pursuant to Section 2827.8.

(c) (1) Except as provided in paragraph (4) and in Section
2827.1, every electric utility shall develop a standard contract or
tariff providing for net energy metering, and shall make this
standard contract or tariff available to eligible customer-generators,
upon request, on a first-come-first-served basis until the time that
the total rated generating capacity used by eligible
customer-generators exceeds 5 percent of the electric utility’s
aggregate customer peak demand. Net energy metering shall be
accomplished using a single meter capable of registering the flow
of electricity in two directions. An additional meter or meters to
monitor the flow of electricity in each direction may be installed
with the consent of the eligible customer-generator, at the expense
of the electric utility, and the additional metering shall be used
only to provide the information necessary to accurately bill or
credit the eligible customer-generator pursuant to subdivision (h),
or to collect generating system performance information for
research purposes relative to a renewable electrical generation
facility. If the existing electrical meter of an eligible
customer-generator is not capable of measuring the flow of
electricity in two directions, the eligible customer-generator shall
be responsible for all expenses involved in purchasing and
installing a meter that is able to measure electricity flow in two
directions. If an additional meter or meters are installed, the net
energy metering calculation shall yield a result identical to that of
a single meter. An eligible customer-generator that is receiving
service other than through the standard contract or tariff may elect
to receive service through the standard contract or tariff until the
electric utility reaches the generation limit set forth in this
paragraph. Once the generation limit is reached, only eligible
customer-generators that had previously elected to receive service
pursuant to the standard contract or tariff have a right to continue
to receive service pursuant to the standard contract or tariff.
Eligibility for net energy metering does not limit an eligible
customer-generator’s eligibility for any other rebate, incentive, or
credit provided by the electric utility, or pursuant to any
governmental program, including rebates and incentives provided
pursuant to the California Solar Initiative.

(2) An electrical corporation shall include a provision in the net
energy metering contract or tariff requiring that any customer with
an existing electrical generating facility and meter who enters into
a new net energy metering contract shall provide an inspection
report to the electrical corporation, unless the electrical generating
facility and meter have been installed or inspected within the
previous three years. The inspection report shall be prepared by a
California licensed contractor who is not the owner or operator of
the facility and meter. A California licensed electrician shall
perform the inspection of the electrical portion of the facility and
meter.

(3) (A) On an annual basis, every electric utility shall make
available to the ratemaking authority information on the total rated
generating capacity used by eligible customer-generators that are
customers of that provider in the provider’s service area and the
net surplus electricity purchased by the electric utility pursuant to
this section.

(B) An electric service provider operating pursuant to Section
394 shall make available to the ratemaking authority the
information required by this paragraph for each eligible
customer-generator that is their customer for each service area of
an electrical corporation, local publicly owned electrical utility,
or electrical cooperative, in which the eligible customer-generator
has net energy metering.

(C) The ratemaking authority shall develop a process for making
the information required by this paragraph available to electric
utilities, and for using that information to determine when, pursuant
to paragraphs (1) and (4), an electric utility is not obligated to
provide net energy metering to additional eligible
customer-generators in its service area.

(4) (A) An electric utility that is not a large electrical
corporation is not obligated to provide net energy metering to
additional eligible customer-generators in its service area when
the combined total peak demand of all electricity used by eligible
customer-generators served by all the electric utilities in that
service area furnishing net energy metering to eligible
customer-generators exceeds 5 percent of the aggregate customer
peak demand of those electric utilities.

(B)  The commission shall require every large electrical
corporation to make the standard contract or tariff available to
eligible customer-generators, continuously and without
interruption, until such times as the large electrical corporation
reaches its net energy metering program limit or July 1, 2017,
whichever is earlier. A large electrical corporation reaches its
program limit when the combined total peak demand of all
electricity used by eligible customer-generators served by all the
electric utilities in the large electrical corporation’s service area
furnishing net energy metering to eligible customer-generators
exceeds 5 percent of the aggregate customer peak demand of those
electric utilities. For purposes of calculating a large electrical
corporation’s program limit, “aggregate customer peak demand”
means the highest sum of the noncoincident peak demands of all
of the large electrical corporation’s customers that occurs in any
calendar year. To determine the aggregate customer peak demand,
every large electrical corporation shall use a uniform method
approved by the commission. The program limit calculated
pursuant to this paragraph shall not be less than the following:

(i) For San Diego Gas and Electric Company, when it has made
607 megawatts of nameplate generating capacity available to
eligible customer-generators.

(ii) For Southern California Edison Company, when it has made
2,240 megawatts of nameplate generating capacity available to
eligible customer-generators.

(iii) For Pacific Gas and Electric Company, when it has made
2,409 megawatts of nameplate generating capacity available to
eligible customer-generators.

(C) Every large electrical corporation shall file a monthly report
with the commission detailing the progress toward the net energy
metering program limit established in subparagraph (B). The report
shall include separate calculations on progress toward the limits
based on operating solar energy systems, cumulative numbers of
interconnection requests for net energy metering eligible systems,
and any other criteria required by the commission.

(D) Beginning July 1, 2017, or upon reaching the net metering
program limit of subparagraph (B), whichever is earlier, the
obligation of a large electrical corporation to provide service
pursuant to a standard contract or tariff shall be pursuant to Section
2827.1 and applicable state and federal requirements.

(d) Every electric utility shall make all necessary forms and
contracts for net energy metering and net surplus electricity
compensation service available for download from the Internet.

(e) (1) Every electric utility shall ensure that requests for
establishment of net energy metering and net surplus electricity
compensation are processed in a time period not exceeding that
for similarly situated customers requesting new electric service,
but not to exceed 30 working days from the date it receives a
completed application form for net energy metering service or net
surplus electricity compensation, including a signed interconnection
agreement from an eligible customer-generator and the electric
inspection clearance from the governmental authority having
jurisdiction.

(2) Every electric utility shall ensure that requests for an
interconnection agreement from an eligible customer-generator
are processed in a time period not to exceed 30 working days from
the date it receives a completed application form from the eligible
customer-generator for an interconnection agreement.

(3) If an electric utility is unable to process a request within the
allowable timeframe pursuant to paragraph (1) or (2), it shall notify
the eligible customer-generator and the ratemaking authority of
the reason for its inability to process the request and the expected
completion date.

(f) (1) If a customer participates in direct transactions pursuant
to paragraph (1) of subdivision (b) of Section 365, or Section 365.1,
with an electric service provider that does not provide distribution
service for the direct transactions, the electric utility that provides
distribution service for the eligible customer-generator is not
obligated to provide net energy metering or net surplus electricity
compensation to the customer.

(2) If a customer participates in direct transactions pursuant to
paragraph (1) of subdivision (b) of Section 365 begin insert or 365.1 end insert with an
electric service provider, and the customer is an eligible
customer-generator, the electric utility that provides distribution
service for the direct transactions may recover from the customer’s
electric service provider the incremental costs of metering and
billing service related to net energy metering and net surplus
electricity compensation in an amount set by the ratemaking
authority.

(g) Except for the time-variant kilowatthour pricing portion of
any tariff adopted by the commission pursuant to paragraph (4) of
subdivision (a) of Section 2851, each net energy metering contract
or tariff shall be identical, with respect to rate structure, all retail
rate components, and any monthly charges, to the contract or tariff
to which the same customer would be assigned if the customer did
not use a renewable electrical generation facility, except that
eligible customer-generators shall not be assessed standby charges
on the electrical generating capacity or the kilowatthour production
of a renewable electrical generation facility. The charges for all
retail rate components for eligible customer-generators shall be
based exclusively on the customer-generator’s net kilowatthour
consumption over a 12-month period, without regard to the eligible
customer-generator’s choice as to from whom it purchases
electricity that is not self-generated. Any new or additional demand
charge, standby charge, customer charge, minimum monthly
charge, interconnection charge, or any other charge that would
increase an eligible customer-generator’s costs beyond those of
other customers who are not eligible customer-generators in the
rate class to which the eligible customer-generator would otherwise
be assigned if the customer did not own, lease, rent, or otherwise
operate a renewable electrical generation facility is contrary to the
intent of this section, and shall not form a part of net energy
metering contracts or tariffs.

(h) For eligible customer-generators, the net energy metering
calculation shall be made by measuring the difference between
the electricity supplied to the eligible customer-generator and the
electricity generated by the eligible customer-generator and fed
back to the electrical grid over a 12-month period. The following
rules shall apply to the annualized net metering calculation:

(1) The eligible residential or small commercial
customer-generator, at the end of each 12-month period following
the date of final interconnection of the eligible
customer-generator’s system with an electric utility, and at each
anniversary date thereafter, shall be billed for electricity used
during that 12-month period. The electric utility shall determine
if the eligible residential or small commercial customer-generator
was a net consumer or a net surplus customer-generator during
that period.

(2) At the end of each 12-month period, where the electricity
supplied during the period by the electric utility exceeds the
electricity generated by the eligible residential or small commercial
customer-generator during that same period, the eligible residential
or small commercial customer-generator is a net electricity
consumer and the electric utility shall be owed compensation for
the eligible customer-generator’s net kilowatthour consumption
over that 12-month period. The compensation owed for the eligible
residential or small commercial customer-generator’s consumption
shall be calculated as follows:

(A) For all eligible customer-generators taking service under
contracts or tariffs employing “baseline” and “over baseline” rates,
any net monthly consumption of electricity shall be calculated
according to the terms of the contract or tariff to which the same
customer would be assigned to, or be eligible for, if the customer
was not an eligible customer-generator. If those same
customer-generators are net generators over a billing period, the
net kilowatthours generated shall be valued at the same price per
kilowatthour as the electric utility would charge for the baseline
quantity of electricity during that billing period, and if the number
of kilowatthours generated exceeds the baseline quantity, the excess
shall be valued at the same price per kilowatthour as the electric
utility would charge for electricity over the baseline quantity during
that billing period.

(B) For all eligible customer-generators taking service under
contracts or tariffs employing time-of-use rates, any net monthly
consumption of electricity shall be calculated according to the
terms of the contract or tariff to which the same customer would
be assigned, or be eligible for, if the customer was not an eligible
customer-generator. When those same customer-generators are
net generators during any discrete time-of-use period, the net
kilowatthours produced shall be valued at the same price per
kilowatthour as the electric utility would charge for retail
kilowatthour sales during that same time-of-use period. If the
eligible customer-generator’s time-of-use electrical meter is unable
to measure the flow of electricity in two directions, paragraph (1)
of subdivision (c) shall apply.

(C) For all eligible residential and small commercial
customer-generators and for each billing period, the net balance
of moneys owed to the electric utility for net consumption of
electricity or credits owed to the eligible customer-generator for
net generation of electricity shall be carried forward as a monetary
value until the end of each 12-month period. For all eligible
commercial, industrial, and agricultural customer-generators, the
net balance of moneys owed shall be paid in accordance with the
electric utility’s normal billing cycle, except that if the eligible
commercial, industrial, or agricultural customer-generator is a net
electricity producer over a normal billing cycle, any excess
kilowatthours generated during the billing cycle shall be carried
over to the following billing period as a monetary value, calculated
according to the procedures set forth in this section, and appear as
a credit on the eligible commercial, industrial, or agricultural
customer-generator’s account, until the end of the annual period
when paragraph (3) shall apply.

(3) At the end of each 12-month period, where the electricity
generated by the eligible customer-generator during the 12-month
period exceeds the electricity supplied by the electric utility during
that same period, the eligible customer-generator is a net surplus
customer-generator and the electric utility, upon an affirmative
election by the net surplus customer-generator, shall either (A)
provide net surplus electricity compensation for any net surplus
electricity generated during the prior 12-month period, or (B) allow
the net surplus customer-generator to apply the net surplus
electricity as a credit for kilowatthours subsequently supplied by
the electric utility to the net surplus customer-generator. For an
eligible customer-generator that does not affirmatively elect to
receive service pursuant to net surplus electricity compensation,
the electric utility shall retain any excess kilowatthours generated
during the prior 12-month period. The eligible customer-generator
not affirmatively electing to receive service pursuant to net surplus
electricity compensation shall not be owed any compensation for
the net surplus electricity unless the electric utility enters into a
purchase agreement with the eligible customer-generator for those
excess kilowatthours. Every electric utility shall provide notice to
eligible customer-generators that they are eligible to receive net
surplus electricity compensation for net surplus electricity, that
they must elect to receive net surplus electricity compensation,
and that the 12-month period commences when the electric utility
receives the eligible customer-generator’s election. For an electric
utility that is an electrical corporation or electrical cooperative,
the commission may adopt requirements for providing notice and
the manner by which eligible customer-generators may elect to
receive net surplus electricity compensation.

(4) (A) An eligible customer-generator with multiple meters
may elect to aggregate the electrical load of the meters located on
the property where the renewable electrical generation facility is
located and on all property adjacent or contiguous to the property
on which the renewable electrical generation facility is located, if
those properties are solely owned, leased, or rented by the eligible
customer-generator. If the eligible customer-generator elects to
aggregate the electric load pursuant to this paragraph, the electric
utility shall use the aggregated load for the purpose of determining
whether an eligible customer-generator is a net consumer or a net
surplus customer-generator during a 12-month period.

(B) If an eligible customer-generator chooses to aggregate
pursuant to subparagraph (A), the eligible customer-generator shall
be permanently ineligible to receive net surplus electricity
compensation, and the electric utility shall retain any kilowatthours
in excess of the eligible customer-generator’s aggregated electrical
load generated during the 12-month period.

(C) If an eligible customer-generator with multiple meters elects
to aggregate the electrical load of those meters pursuant to
subparagraph (A), and different rate schedules are applicable to
service at any of those meters, the electricity generated by the
renewable electrical generation facility shall be allocated to each
of the meters in proportion to the electrical load served by those
meters. For example, if the eligible customer-generator receives
electric service through three meters, two meters being at an
agricultural rate that each provide service to 25 percent of the
customer’s total load, and a third meter, at a commercial rate, that
provides service to 50 percent of the customer’s total load, then
50 percent of the electrical generation of the eligible renewable
generation facility shall be allocated to the third meter that provides
service at the commercial rate and 25 percent of the generation
shall be allocated to each of the two meters providing service at
the agricultural rate. This proportionate allocation shall be
computed each billing period.

(D) This paragraph shall not become operative for an electrical
corporation unless the commission determines that allowing
eligible customer-generators to aggregate their load from multiple
meters will not result in an increase in the expected revenue
obligations of customers who are not eligible customer-generators.
The commission shall make this determination by September 30,
2013. In making this determination, the commission shall determine
if there are any public purpose or other noncommodity charges
that the eligible customer-generators would pay pursuant to the
net energy metering program as it exists prior to aggregation, that
the eligible customer-generator would not pay if permitted to
aggregate the electrical load of multiple meters pursuant to this
paragraph.

(E) A local publicly owned electric utility or electrical
cooperative shall only allow eligible customer-generators to
aggregate their load if the utility’s ratemaking authority determines
that allowing eligible customer-generators to aggregate their load
from multiple meters will not result in an increase in the expected
revenue obligations of customers that are not eligible
customer-generators. The ratemaking authority of a local publicly
owned electric utility or electrical cooperative shall make this
determination within 180 days of the first request made by an
eligible customer-generator to aggregate their load. In making the
determination, the ratemaking authority shall determine if there
are any public purpose or other noncommodity charges that the
eligible customer-generator would pay pursuant to the net energy
metering or co-energy metering program of the utility as it exists
prior to aggregation, that the eligible customer-generator would
not pay if permitted to aggregate the electrical load of multiple
meters pursuant to this paragraph. If the ratemaking authority
determines that load aggregation will not cause an incremental
rate impact on the utility’s customers that are not eligible
customer-generators, the local publicly owned electric utility or
electrical cooperative shall permit an eligible customer-generator
to elect to aggregate the electrical load of multiple meters pursuant
to this paragraph. The ratemaking authority may reconsider any
determination made pursuant to this subparagraph in a subsequent
public proceeding.

(F) For purposes of this paragraph, parcels that are divided by
a street, highway, or public thoroughfare are considered contiguous,
provided they are otherwise contiguous and under the same
ownership.

(G) An eligible customer-generator may only elect to aggregate
the electrical load of multiple meters if the renewable electrical
generation facility, or a combination of those facilities, has a total
generating capacity of not more than one megawatt.

(H) Notwithstanding subdivision (g), an eligible
customer-generator electing to aggregate the electrical load of
multiple meters pursuant to this subdivision shall remit service
charges for the cost of providing billing services to the electric
utility that provides service to the meters.

(5) (A) The ratemaking authority shall establish a net surplus
electricity compensation valuation to compensate the net surplus
customer-generator for the value of net surplus electricity generated
by the net surplus customer-generator. The commission shall
establish the valuation in a ratemaking proceeding. The ratemaking
authority for a local publicly owned electric utility shall establish
the valuation in a public proceeding. The net surplus electricity
compensation valuation shall be established so as to provide the
net surplus customer-generator just and reasonable compensation
for the value of net surplus electricity, while leaving other
ratepayers unaffected. The ratemaking authority shall determine
whether the compensation will include, where appropriate
justification exists, either or both of the following components:

(i) The value of the electricity itself.

(ii) The value of the renewable attributes of the electricity.

(B) In establishing the rate pursuant to subparagraph (A), the
ratemaking authority shall ensure that the rate does not result in a
shifting of costs between eligible customer-generators and other
bundled service customers.

(6) (A) Upon adoption of the net surplus electricity
compensation rate by the ratemaking authority, any renewable
energy credit, as defined in Section 399.12, for net surplus
electricity purchased by the electric utility shall belong to the
electric utility. Any renewable energy credit associated with
electricity generated by the eligible customer-generator that is
utilized by the eligible customer-generator shall remain the property
of the eligible customer-generator.

(B) Upon adoption of the net surplus electricity compensation
rate by the ratemaking authority, the net surplus electricity
purchased by the electric utility shall count toward the electric
utility’s renewables portfolio standard annual procurement targets
for the purposes of paragraph (1) of subdivision (b) of Section
399.15, or for a local publicly owned electric utility, the renewables
portfolio standard annual procurement targets established pursuant
to Section begin delete 387. end delete begin insert 399.30. end insert

(7) The electric utility shall provide every eligible residential
or small commercial customer-generator with net electricity
consumption and net surplus electricity generation information
with each regular bill. That information shall include the current
monetary balance owed the electric utility for net electricity
consumed, or the net surplus electricity generated, since the last
12-month period ended. Notwithstanding this subdivision, an
electric utility shall permit that customer to pay monthly for net
energy consumed.

(8) If an eligible residential or small commercial
customer-generator terminates the customer relationship with the
electric utility, the electric utility shall reconcile the eligible
customer-generator’s consumption and production of electricity
during any part of a 12-month period following the last
reconciliation, according to the requirements set forth in this
subdivision, except that those requirements shall apply only to the
months since the most recent 12-month bill.

(9) If an electric service provider or electric utility providing
net energy metering to a residential or small commercial
customer-generator ceases providing that electric service to that
customer during any 12-month period, and the customer-generator
enters into a new net energy metering contract or tariff with a new
electric service provider or electric utility, the 12-month period,
with respect to that new electric service provider or electric utility,
shall commence on the date on which the new electric service
provider or electric utility first supplies electric service to the
customer-generator.

(i) Notwithstanding any other provisions of this section,
paragraphs (1), (2), and (3) shall apply to an eligible
customer-generator with a capacity of more than 10 kilowatts, but
not exceeding one megawatt, that receives electric service from a
local publicly owned electric utility that has elected to utilize a
co-energy metering program unless the local publicly owned
electric utility chooses to provide service for eligible
customer-generators with a capacity of more than 10 kilowatts in
accordance with subdivisions (g) and (h):

(1) The eligible customer-generator shall be required to utilize
a meter, or multiple meters, capable of separately measuring
electricity flow in both directions. All meters shall provide
time-of-use measurements of electricity flow, and the customer
shall take service on a time-of-use rate schedule. If the existing
meter of the eligible customer-generator is not a time-of-use meter
or is not capable of measuring total flow of electricity in both
directions, the eligible customer-generator shall be responsible for
all expenses involved in purchasing and installing a meter that is
both time-of-use and able to measure total electricity flow in both
directions. This subdivision shall not restrict the ability of an
eligible customer-generator to utilize any economic incentives
provided by a governmental agency or an electric utility to reduce
its costs for purchasing and installing a time-of-use meter.

(2) The consumption of electricity from the local publicly owned
electric utility shall result in a cost to the eligible
customer-generator to be priced in accordance with the standard
rate charged to the eligible customer-generator in accordance with
the rate structure to which the customer would be assigned if the
customer did not use a renewable electrical generation facility.
The generation of electricity provided to the local publicly owned
electric utility shall result in a credit to the eligible
customer-generator and shall be priced in accordance with the
generation component, established under the applicable structure
to which the customer would be assigned if the customer did not
use a renewable electrical generation facility.

(3) All costs and credits shall be shown on the eligible
customer-generator’s bill for each billing period. In any months
in which the eligible customer-generator has been a net consumer
of electricity calculated on the basis of value determined pursuant
to paragraph (2), the customer-generator shall owe to the local
publicly owned electric utility the balance of electricity costs and
credits during that billing period. In any billing period in which
the eligible customer-generator has been a net producer of
electricity calculated on the basis of value determined pursuant to
paragraph (2), the local publicly owned electric utility shall owe
to the eligible customer-generator the balance of electricity costs
and credits during that billing period. Any net credit to the eligible
customer-generator of electricity costs may be carried forward to
subsequent billing periods, provided that a local publicly owned
electric utility may choose to carry the credit over as a kilowatthour
credit consistent with the provisions of any applicable contract or
tariff, including any differences attributable to the time of
generation of the electricity. At the end of each 12-month period,
the local publicly owned electric utility may reduce any net credit
due to the eligible customer-generator to zero.

(j) A renewable electrical generation facility used by an eligible
customer-generator shall meet all applicable safety and
performance standards established by the National Electrical Code,
the Institute of Electrical and Electronics Engineers, and accredited
testing laboratories, including Underwriters Laboratories
Incorporated and, where applicable, rules of the commission
regarding safety and reliability. A customer-generator whose
renewable electrical generation facility meets those standards and
rules shall not be required to install additional controls, perform
or pay for additional tests, or purchase additional liability
insurance.

(k) If the commission determines that there are cost or revenue
obligations for an electrical corporation that may not be recovered
from customer-generators acting pursuant to this section, those
obligations shall remain within the customer class from which any
shortfall occurred and shall not be shifted to any other customer
class. Net energy metering and co-energy metering customers shall
not be exempt from the public goods charges imposed pursuant to
Article 7 (commencing with Section 381), Article 8 (commencing
with Section 385), or Article 15 (commencing with Section 399)
of Chapter 2.3 of Part 1.

(l) A net energy metering, co-energy metering, or wind energy
co-metering customer shall reimburse the Department of Water
Resources for all charges that would otherwise be imposed on the
customer by the commission to recover bond-related costs pursuant
to an agreement between the commission and the Department of
Water Resources pursuant to Section 80110 of the Water Code,
as well as the costs of the department equal to the share of the
department’s estimated net unavoidable power purchase contract
costs attributable to the customer. The commission shall
incorporate the determination into an existing proceeding before
the commission, and shall ensure that the charges are
nonbypassable. Until the commission has made a determination
regarding the nonbypassable charges, net energy metering,
co-energy metering, and wind energy co-metering shall continue
under the same rules, procedures, terms, and conditions as were
applicable on December 31, 2002.

(m) In implementing the requirements of subdivisions (k) and
(l), an eligible customer-generator shall not be required to replace
its existing meter except as set forth in paragraph (1) of subdivision
(c), nor shall the electric utility require additional measurement of
usage beyond that which is necessary for customers in the same
rate class as the eligible customer-generator.

(n) It is the intent of the Legislature that the Treasurer
incorporate net energy metering, including net surplus electricity
compensation, co-energy metering, and wind energy co-metering
projects undertaken pursuant to this section as sustainable building
methods or distributive energy technologies for purposes of
evaluating low-income housing projects.

begin insert

begin insert SEC. 23. end insert   

end insert

begin insert Section 2 of Chapter 657 of the Statutes of 2007 is
repealed. end insert

begin delete

SEC. 2.  

Notwithstanding the repeal of Division 10.5
(commencing with Section 12200) of the Public Resources Code
on January 1, 2015, by Section 12292 of the Public Resources
Code, the Department of Forestry and Fire Protection shall do both
of the following:

(a) Provide for monitoring of conservation easements purchased
pursuant to former Division 10.5 (commencing with Section 12200)
of the Public Resources Code in order to assess the condition of
resources being protected, and to ensure that the terms of the
easement are being met pursuant to a given conservation easement.

(b) Annually report to the Governor and the Legislature by
January 1 of each year on the number of easements purchased
pursuant to former Division 10.5 (commencing with Section 12200)
of the Public Resources Code, and a description of those easements.

end delete

begin insert

begin insert SEC. 24. end insert   

end insert

begin insert Section 1 of Chapter 415 of the Statutes of 2013 is
amended to read: end insert

SECTION 1.  

(a) The sum of twenty million dollars
($20,000,000) is hereby appropriated to the State Air Resources
Board begin insert for the 2013-14 fiscal year end insert from the begin delete moneys transferred
from the Vehicle Inspection and Repair Account to the Air Quality
Improvement Fund pursuant to subdivision (d) end delete begin insert Greenhouse Gas
Reduction Fund, established pursuant to Section 16428.8 of the
Government Code, end insert to be expended only for the Clean Vehicle
Rebate Project, established pursuant to Article 3 (commencing
with Section 44274) of Chapter 8.9 of Part 5 of Division 26 of the
Health and Safety Code. begin insert The unencumbered balance of the
appropriation made pursuant to this subdivision as it read on
January 1, 2014, is hereby reverted to the Vehicle Inspection and
Repair Fund. Notwithstanding Section 16304.1 of the Government
Code, the moneys appropriated pursuant to this subdivision shall
be available for encumbrance until June 30, 2015. end insert

(b) The sum of ten million dollars ($10,000,000) is hereby
appropriated to the State Air Resources Board begin insert for the 2013-14
fiscal year end insert from begin delete the moneys transferred from the Vehicle Inspection
and Repair Account to the Air Quality Improvement Fund pursuant
to subdivision (d) end delete begin insert the Greenhouse Gas Reduction Fund, established
pursuant to Section 16428.8 of the Government Code, end insert to be
expended only for the Hybrid and Zero-Emission Truck and Bus
Voucher Incentive Project, established pursuant to Article 3
(commencing with Section 44274) of Chapter 8.9 of Part 5 of
Division 26 of the Health and Safety Code. begin insert The unencumbered
balance of the appropriation made pursuant to this subdivision as
it read on January 1, 2014, is hereby reverted to the Vehicle
Inspection and Repair Fund. Notwithstanding Section 16304.1 of
the Government Code, the moneys appropriated pursuant to this
subdivision shall be available for encumbrance until June 30,
2015. end insert

(c) The sum of ten million dollars ($10,000,000) is hereby
appropriated to the State Air Resources Board from the moneys
transferred to the Air Pollution Control Fund pursuant to
subdivision (e) to be expended only for the Heavy-Duty Vehicle
Air Quality Loan Program, administered through the Capital
Access Loan Program established pursuant to Article 8
(commencing with Section 44559) of Chapter 1 of Division 27 of
the Health and Safety Code.

begin delete

(d) The sum of thirty million dollars ($30,000,000) shall be
transferred by the Controller as a loan from the Vehicle Inspection
and Repair Fund to the Air Quality Improvement Fund. No later
than June 30, 2016, the loan shall be repaid, from a non-General
Fund source, upon appropriation by the Legislature, with interest
at the rate earned by the Pooled Money Investment Account at the
time of the transfer.

end delete begin delete

(e)

end delete

begin insert (d) end insert  The sum of ten million dollars ($10,000,000) shall be
transferred by the Controller as a loan from the Vehicle Inspection
and Repair Fund to the Air Pollution Control Fund. No later than
June 30, 2021, the loan shall be repaid from the Air Pollution
Control Fund with interest at the rate earned by the Pooled Money
Investment Account at the time of the transfer.

begin insert

begin insert SEC. 25. end insert   

end insert begin insert

Pursuant to paragraph (1) of subdivision (b) of
Section 44091.1 of the Health and Safety Code, the sum of fifteen
million dollars ($15,000,000) is hereby transferred to the Air
Quality Improvement Fund from the Vehicle Inspection and Repair
Fund from revenues generated from the smog abatement fee
pursuant to paragraph (1) of subdivision (d) of Section 44060 of
the Health and Safety Code.

end insert

begin insert

begin insert SEC. 26. end insert   

end insert begin insert

The provisions of this measure are severable. If any
provision of this measure or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.

end insert

begin insert

begin insert SEC. 27. end insert   

end insert begin insert

No reimbursement is required by this act pursuant
to Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

begin insert

begin insert SEC. 28. end insert   

end insert begin insert

This act is a bill providing for appropriations related
to the Budget Bill within the meaning of subdivision (e) of Section
12 of Article IV of the California Constitution, has been identified
as related to the budget in the Budget Bill, and shall take effect
immediately.

end insert

begin delete

SECTION 1.  

It is the intent of the Legislature to enact statutory
changes relating to the Budget Act of 2014.

end delete