BILL NUMBER: AB 21	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 12, 2009
	AMENDED IN SENATE  SEPTEMBER 4, 2009
	AMENDED IN ASSEMBLY  APRIL 2, 2009
	AMENDED IN ASSEMBLY  MARCH 18, 2009
	AMENDED IN ASSEMBLY  FEBRUARY 18, 2009

INTRODUCED BY   Assembly  Members   Bonnie
Lowenthal     and Saldana 
 Member   Krekorian 
    (   Coauthor:   Senator   Simitian
  ) 

                        DECEMBER 1, 2008

    An act toamend Sections 15620, 15621, 16401, and 16421
of, and to add Chapter 8.5 (commencing with Section 15560) to
Division 15 of, the Elections Code, relating to elections. 
 An act to amend Section 399.12 of, and repeal and add Section
399.15 of the Public Utilities Code, relating to energy. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 21, as amended,  Bonnie Lowenthal  
Krekorian  .  Elections: audits.  
Renewable energy resources.  
   Under existing law, an elections official must conduct a public
manual tally of votes cast in an election and tabulated by a
mechanical, electromechanical, or electronic system in 1% of the
precincts in the jurisdiction, chosen at random by the elections
official.  
   This bill would require an elections official, after an election,
to calculate the margin of victory for each contest on the ballot at
the election. For each contest in which the margin of victory was
less than 1/2 of 1%, this bill would require the elections official
to conduct a public manual tally for a specified percentage of
precincts within the jurisdiction, which would be known as a
postcanvass audit. The bill would require an elections official to
report to the public any variances between the results of the machine
tally and postcanvass audit. The bill would require the elections
official to calculate the percentage of variance in the audited
precincts, by dividing the number of variances found in the audited
precincts by the total number of votes cast within those precincts.
If the percentage of variance is 50% or greater of the margin of
victory for the contest, this bill would require the elections
official to add precincts to the postcanvass audit until either the
percentage of variance is less than 50% of the margin of victory for
the contest or all of the votes cast for the contest in the
jurisdiction have been manually tallied, whichever occurs first. If
the postcanvass audit includes all of the precincts in the
jurisdiction and reveals that the outcome of a contest in a precinct
was different than that found by the machine tally, this bill would
require the elections official to amend the certified statement of
results for that precinct to reflect the result revealed by the
postcanvass audit. The bill would also provide other related
procedures for conducting the postcanvass audit.  
   Because this bill would require a higher level of service from
local elections officials, it would impose a state-mandated local
program.  
   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.  
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.  
   Under existing law, the Public Utilities Commission (PUC) has
regulatory authority over public utilities, including electrical
corporations, as defined. The Public Utilities Act imposes various
duties and responsibilities on the PUC with respect to the purchase
of electricity and requires the PUC to review and a renewable energy
procurement plan for each electrical corporation pursuant to the
California Renewables Portfolio Standard Program (RPS program). The
RPS program requires that a retail seller of electricity, including
electrical corporations, community choice aggregators, and electric
service providers, purchase a specified minimum percentage of
electricity generated by eligible renewable energy resources, as
defined, in any given year as a specified percentage of total
kilowatthours sold to retail end-use customers each calendar year.
The RPS program requires the PUC to implement annual procurement
targets for each retail seller to increase its total procurement of
electricity generated by eligible renewable energy resources by at
least an additional 1% of retail sales per year so that 20% of its
retail sales of electricity are procured from eligible renewable
energy resources no later than December 31, 2010. Existing law
requires the PUC to make a determination of the existing market cost
for electricity, which PUC decisions call the market price referent,
and to limit an electrical corporation's obligation to procure
electricity from eligible renewable energy resources, that exceeds
the market price referent, by a specified amount.  
   This bill would instead require the PUC to require that a retail
seller procure the following percentages of electricity from eligible
renewable energy resources by the following dates: (A) Until
December 31, 2012, the same percentage as actually achieved by the
retail seller during 2009; (B) 20% by December 31, 2013; (C) 25% by
December 31, 2016; and (D) 33% by December 31, 2020. The bill would
authorize the PUC to permit a retail seller to delay compliance with
(B) or (C) procurement levels when specified circumstances are
present, but would not authorize the PUC to permit a retail seller to
delay compliance with the (D) procurement level. The bill would
delete the existing market price referent provisions and instead
require the PUC to establish a methodology to determine the market
price of electricity for terms corresponding to the length of
contracts with eligible renewable energy resources, in consideration
of, and reflecting, certain matters. The bill would require the PUC
to establish a limitation on the annual expenditures made above the
market price, by an electrical corporation, in order to achieve the
procurement levels established by the PUC. The bill would require the
PUC to permit an electrical corporation to limit its procurement of
electricity from eligible renewable energy resources to that quantity
that can be procured at or below the market prices established by
the PUC, up to the limitation. The bill would delete an existing
requirement that the PUC adopt flexible rules for compliance for
retail sellers. The bill would revise the definitions of certain
terms for purposes of the RPS program.  
   Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the PUC
is a crime.  
   Because the provisions of this bill are within the act and require
action by the PUC to implement its requirements, a violation of
these provisions would impose a state-mandated local program by
expanding the definition of a crime.  
   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.  
   This bill would provide that no reimbursement is required by this
act for a specified reason. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 399.12 of the   Public
Utilities Code   is amended to read: 
   399.12.  For purposes of this article, the following terms have
the following meanings:
   (a) "Conduit hydroelectric facility" means a facility for the
generation of electricity that uses only the hydroelectric potential
of an existing pipe, ditch, flume, siphon, tunnel, canal, or other
manmade conduit that is operated to distribute water for a beneficial
use.
   (b)  (1)    "Delivered" and  "delivery"
have the same meaning as provided in subdivision (a) of Section 25741
of the Public Resources Code.   "delivery," with
respect to electricity, means that the electricity is used to serve
end-use retail customers or energy storage facilities located within
the state, and meets either of the following conditions:  
   (A) The electricity is generated at a location within the state.
 
   (B) The electricity is generated at a location outside the state
and scheduled for consumption by California end-use retail customers
or energy storage facilities located within the state. Compliance
with this requirement is demonstrated by one of the following means:
 
   (i) Showing that the generator's first point of interconnection is
with facilities of a Transmission Service Provider, as that term is
defined by North American Electric Reliability Corporation primarily
located in this state.  
   (ii) Showing that the 24-hour metered output of the generator
matches the import schedules of electricity flow from the generator,
through the balancing authority area in which the generator is
located, through any intermediate balancing authorities, to the
balancing authority area of the end-use retail customers or energy
storage facility located in this state.  
   (2) Notwithstanding clause (ii) of subparagraph (B) of paragraph
(1), electricity is not delivered to the extent that either of the
following occurs:  
   (A) The physical delivery of electricity is scheduled from a
source other than a renewable electrical generation facility, as
defined in Section 27541 of the Public Resources Code.  
   (B) The electricity output is scheduled for delivery to customers
in a different 24-hour period from the time of generation by the
renewable electrical generation facility.  
   (3) Consistent with subparagraph (A) of paragraph (2), the
physical delivery of electricity from a renewable electrical
generation facility may be accompanied by electricity provided by
another source for purposes of facilitating scheduling. For purposes
of this article, only the portion of electricity provided directly
from the renewable electrical generation facility shall count toward
meeting the renewables portfolio standard procurement requirements of
this article.  
   (4) For purposes of determining compliance by an intermittent
resource located outside California with the delivery requirements of
this subdivision, any positive imbalance energy provided under
applicable tariffs by the balancing authority in which the facility
is located shall, in an amount not exceeding any negative imbalance
energy provided by the intermittent resource, be included in the
24-hour metered output and considered generated by the eligible
renewable energy resource. 
   (c) "Eligible renewable energy resource" means an 
electric   electrical  generating facility that
meets the definition of  "in-state renewable electricity
  a "renewable electrical  generation facility" in
Section 25741 of the Public Resources Code  , 
subject to the following  limitations  :
   (1) (A) An existing small hydroelectric generation facility of 30
megawatts or less shall be eligible only if a retail seller or local
publicly owned electric utility owned or procured the electricity
from the facility as of December 31, 2005.  A small hydroelectric
generation unit with a nameplate capacity not exceeding 40 megawatts
that is operated as part of a water supply or conveyance system
serving the jurisdiction of a local publicly owned electric utility
is an eligible renewable energy resource if the local publicly owned
electric utility owned or procured the electricity from the facility
as of December 31, 2005.  A new hydroelectric facility is not an
eligible renewable energy resource if it will cause an adverse
impact on instream beneficial uses or cause a change in the volume or
timing of streamflow.
   (B) Notwithstanding subparagraph (A), a conduit hydroelectric
facility of 30 megawatts or less that commenced operation before
January 1, 2006, is an eligible renewable energy resource. A conduit
hydroelectric facility of 30 megawatts or less that commences
operation after December 31, 2005, is an eligible renewable energy
resource so long as it does not cause an adverse impact on instream
beneficial uses or cause a change in the volume or timing of
streamflow.
   (2) A facility engaged in the combustion of municipal solid waste
shall not be considered an eligible renewable resource unless it is
located in Stanislaus County and was operational prior to September
26, 1996.
   (d) "Procure" means  that a retail seller or local
publicly owned electric utility receives delivered electricity
generated by an eligible renewable energy resource that it owns or
for which it has entered into an electricity purchase agreement
  to acquire through ownership or contract. For purposes
of meeting the renewables portfolio standard procurement
requirements, a retail seller or local publicly owned electric
utility may procure either delivered electricity generated by an
eligible   renewable energy resource or renewable energy
credits associated with electricity generated, but not necessarily
delivered by, an eligible renewable energy resource  . Nothing
in this article is intended to imply that the purchase of electricity
from third parties in a wholesale transaction is the preferred
method of fulfilling a retail seller's obligation to comply with this
article or the obligation of a local publicly owned electric utility
to meet its renewables portfolio standard implemented pursuant to
Section  387   399.30  . 
   (e) "Renewables portfolio standard" means the specified percentage
of electricity generated by eligible renewable energy resources that
a retail seller is required to procure pursuant to this article or
the obligation of a local publicly owned electric utility to meet its
renewables portfolio standard implemented pursuant to Section 387.
 
   (f) 
    (e)  (1) "Renewable energy credit" means a certificate
of proof  associated with the generation of electricity from an
eligible renewable energy resource  , issued through the
accounting system established by the Energy Commission pursuant to
Section  399.13   399.25  , that one unit
of electricity was generated  and delivered  by an
eligible renewable energy resource.
   (2) "Renewable energy credit" includes all renewable and
environmental attributes associated with the production of
electricity from the eligible renewable energy resource, except for
an emissions reduction credit issued pursuant to Section 40709 of the
Health and Safety Code and any credits or payments associated with
the reduction of solid waste and treatment benefits created by the
utilization of biomass or biogas fuels.
   (3)  (A)    No electricity generated by an
eligible renewable energy resource attributable to the use of
nonrenewable fuels, beyond a de minimis quantity, as determined by
the Energy Commission  for each renewable energy technology 
, shall result in the creation of a renewable energy credit. 
   (B) No electricity generated by a small hydroelectric generation
facility shall result in the creation of a renewable energy credit
unless the facility meets the requirements of subparagraph (A) of
paragraph (1) of subdivision (c).  
   (C) No electricity generated by a conduit hydroelectric generation
facility shall result in the creation of a renewable energy credit
unless the facility meets the requirements of subparagraph (B) of
paragraph (1) of subdivision (c).  
   (D) No electricity generated by a facility engaged in the
combustion of municipal solid waste shall result in the creation of a
renewable energy credit unless the facility meets the requirements
of paragraph (2) of subdivision (c).  
   (f) "Renewable energy public goods charge" means that portion of
the nonbypassable system benefits charge required to be collected to
fund renewable energy pursuant to the Reliable Electric Service
Investments Act (Article 15 (commencing with Section 399) of Chapter
2.3 of Part 1 of Division 1, for an electrical corporation, and
pursuant to Section 385 for a local publicly owned electric utility.
 
   (g) "Renewables portfolio standard" means the specified percentage
of electricity generated by eligible renewable energy resources that
a retail seller or a local publicly owned electric utility is
required to procure pursuant to this article.  
   (g) 
    (h)  "Retail seller" means an entity engaged in the
retail sale of electricity to end-use customers located within the
state, including any of the following:
   (1) An electrical corporation, as defined in Section 218.
   (2) A community choice aggregator. The commission shall institute
a rulemaking to determine the manner in which a community choice
aggregator will participate in the renewables portfolio standard
program subject to the same terms and conditions applicable to an
electrical corporation.
   (3) An electric service provider, as defined in Section 218.3, for
all sales of electricity to customers beginning January 1, 2006. The
commission shall institute a rulemaking to determine the manner in
which electric service providers will participate in the renewables
portfolio standard program. The electric service provider shall be
subject to the same terms and conditions applicable to an electrical
corporation pursuant to this article. Nothing in this paragraph shall
impair a contract entered into between an electric service provider
and a retail customer prior to the suspension of direct access by the
commission pursuant to Section 80110 of the Water Code.
   (4) "Retail seller" does not include any of the following:
   (A) A corporation or person employing cogeneration technology or
producing electricity consistent with subdivision (b) of Section 218.

   (B) The Department of Water Resources acting in its capacity
pursuant to Division 27 (commencing with Section 80000) of the Water
Code.
   (C) A local publicly owned electric utility.
   SEC. 2.    Section 399.15 of the   Public
Utilities Code   is repealed.  
   399.15.  (a) In order to fulfill unmet long-term resource needs,
the commission shall establish a renewables portfolio standard
requiring all electrical corporations to procure a minimum quantity
of electricity generated by eligible renewable energy resources as a
specified percentage of total kilowatthours sold to their retail
end-use customers each calendar year, subject to limits on the total
amount of costs expended above the market prices determined in
subdivision (c), to achieve the targets established under this
article.
   (b) The commission shall implement annual procurement targets for
each retail seller as follows:
   (1) Each retail seller shall, pursuant to subdivision (a),
increase its total procurement of eligible renewable energy resources
by at least an additional 1 percent of retail sales per year so that
20 percent of its retail sales are procured from eligible renewable
energy resources no later than December 31, 2010. A retail seller
with 20 percent of retail sales procured from eligible renewable
energy resources in any year shall not be required to increase its
procurement of renewable energy resources in the following year.
   (2) For purposes of setting annual procurement targets, the
commission shall establish an initial baseline for each retail seller
based on the actual percentage of retail sales procured from
eligible renewable energy resources in 2001, and to the extent
applicable, adjusted going forward pursuant to Section 399.12.
   (3) Only for purposes of establishing these targets, the
commission shall include all electricity sold to retail customers by
the Department of Water Resources pursuant to Section 80100 of the
Water Code in the calculation of retail sales by an electrical
corporation.
   (4) In the event that a retail seller fails to procure sufficient
eligible renewable energy resources in a given year to meet any
annual target established pursuant to this subdivision, the retail
seller shall procure additional eligible renewable energy resources
in subsequent years to compensate for the shortfall, subject to the
limitation on costs for electrical corporations established pursuant
to subdivision (d).
   (c) The commission shall establish a methodology to determine the
market price of electricity for terms corresponding to the length of
contracts with eligible renewable energy resources, in consideration
of the following:
   (1) The long-term market price of electricity for fixed price
contracts, determined pursuant to an electrical corporation's general
procurement activities as authorized by the commission.
   (2) The long-term ownership, operating, and fixed-price fuel costs
associated with fixed-price electricity from new generating
facilities.
   (3) The value of different products including baseload, peaking,
and as-available electricity.
   (d) The commission shall establish, for each electrical
corporation, a limitation on the total costs expended above the
market prices determined in subdivision (c) for the procurement of
eligible renewable energy resources to achieve the annual procurement
targets established under this article.
   (1) The cost limitation shall be equal to the amount of funds
transferred to each electrical corporation by the Energy Commission
pursuant to subdivision (b) of Section 25743 of the Public Resources
Code and the 51.5 percent of the funds which would have been
collected through January 1, 2012, from the customers of the
electrical corporation based on the renewable energy public goods
charge in effect as of January 1, 2007.
   (2) The above-market costs of a contract selected by an electrical
corporation may be counted toward the cost limitation if all of the
following conditions are satisfied:
   (A) The contract has been approved by the commission and was
selected through a competitive solicitation pursuant to the
requirements of subdivision (d) of Section 399.14.
   (B) The contract covers a duration of no less than 10 years.
   (C) The contracted project is a new or repowered facility
commencing commercial operations on or after January 1, 2005.
   (D) No purchases of renewable energy credits may be eligible for
consideration as an above-market cost.
   (E) The above-market costs of a contract do not include any
indirect expenses including imbalance energy charges, sale of excess
energy, decreased generation from existing resources, or transmission
upgrades.
   (3) If the cost limitation for an electrical corporation is
insufficient to support the total costs expended above the market
prices determined in subdivision (c) for the procurement of eligible
renewable energy resources satisfying the conditions of paragraph
(2), the commission shall allow the electrical corporation to limit
its procurement to the quantity of eligible renewable energy
resources that can be procured at or below the market prices
established in subdivision (c).
   (4) Nothing in this section prevents an electrical corporation
from voluntarily proposing to procure eligible renewable energy
resources at above-market prices that are not counted toward the cost
limitation. Any voluntary procurement involving above-market costs
shall be subject to commission approval prior to the expense being
recovered in rates.
   (e) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
   (f) The commission shall consult with the Energy Commission in
calculating market prices under subdivision (c) and establishing
other renewables portfolio standard policies. 
   SEC. 3.    Section 399.15 is added to the  
Public Utilities Code   , to read:  
   399.15.  (a) In order to fulfill unmet long-term resource needs,
the commission shall establish a renewables portfolio standard
requiring all retail sellers to procure a minimum quantity of
electricity generated by eligible renewable energy resources as a
specified percentage of total kilowatthours sold to their retail
end-use customers each compliance period to achieve the targets
established under this article.
   (b) The commission shall implement renewables portfolio standard
procurement requirements only as follows:
   (1) Each retail seller shall procure the following minimum
percentages of eligible renewable energy resources in the following
years, and continue to procure at least those percentages in
subsequent years:
   (A) Until December 31, 2012, the same percentage as actually
achieved by the retail seller during 2009.
   (B) Twenty percent by December 31, 2013.
   (C) Twenty-five percent by December 31, 2016.
   (D) Thirty-three percent by December 31, 2020.
   (2) A retail seller with 33 percent of its retail sales of
electricity procured from eligible renewable energy resources in any
year shall not be required to increase its procurement of renewable
energy resources, except to the extent required to maintain a 33
percent renewables portfolio standard. A retail seller may
voluntarily increase its procurement of eligible renewable energy
resources beyond the renewables portfolio standard procurement
requirements.
   (3) Only for purposes of establishing the renewables portfolio
standard procurement requirements of paragraph (1), the commission
shall include all electricity sold to retail customers by the
Department of Water Resources pursuant to Section 80100 of the Water
Code in the calculation of retail sales by an electrical corporation.

   (4) The commission may only allow a retail seller for a maximum of
two years per request to delay compliance with a renewables
portfolio standard procurement requirement established pursuant to
subparagraph (B) or (C) of paragraph (1), if it finds that the retail
seller has demonstrated that either of the following conditions will
prevent timely compliance:
   (A) There is inadequate transmission capacity to allow for
sufficient electricity to be delivered from proposed eligible
renewable energy resource projects using the current operational
protocols of the Independent System Operator (ISO). The commission
shall consult with the ISO in making its findings relative to the
existence of this condition. In making its findings relative to the
existence of this condition with respect to a retail seller that owns
transmission lines, the commission shall consider both of the
following:
   (i) Whether the retail seller has undertaken all reasonable
measures to develop and construct new transmission lines or upgrades
to existing lines in a timely fashion.
   (ii) Whether the retail seller has taken all reasonable
operational measures, as verified by the ISO, to maximize deliveries
of electricity from eligible renewable energy resources in advance of
transmission availability.
   (B) Unanticipated permitting, interconnection, or other delays for
procured eligible renewable energy resource projects, or there is an
insufficient supply of delivered electricity from eligible renewable
energy resources available to the retail seller. In making this
finding, the commission shall consider whether the retail seller has
prudently managed portfolio risks, relied on sufficient viable
projects, sought to develop its own eligible renewable energy
resources, and procured an appropriate minimum margin of procurement
above the minimum procurement level necessary to comply with the
renewables portfolio standard to compensate for foreseeable delays or
insufficient supply.
   (5) Prior to granting a delay pursuant to paragraph (4), the
commission shall require a retail seller to demonstrate that it has
presented evidence that it has made material progress in reducing its
compliance deficit and has taken all reasonable measures consistent
with this article to procure cost-effective distributed generation
and renewable energy credits consistent with the restrictions in
paragraph (6) of subdivision (a) of Section 399.21.
   (6) The commission may not approve any request to delay a
compliance obligation for which it has already granted a delay unless
a retail seller presents evidence that it has made material progress
in reducing its compliance deficiency and has identified and taken
all reasonable actions under its control to pursue additional options
to comply with the delayed interim procurement obligation and remove
impediments that are related to its delay.
   (7) The commission may not authorize any delay in achieving the 33
percent by December 31, 2020, renewables portfolio standard
procurement requirement of subparagraph (D) of paragraph (1).
   (8) If a retail seller fails to procure sufficient eligible
renewable energy resources to comply with a renewables portfolio
standard procurement requirement and fails to obtain an order from
the commission authorizing a compliance delay pursuant to paragraph
(4), the commission shall exercise its authority pursuant to Section
2113.
   (c) The commission shall establish a methodology to determine the
market price of electricity for terms corresponding to the length of
contracts with eligible renewable energy resources, in consideration
of the long-term ownership, operating, and fixed-price fuel costs
associated with fixed-price electricity from new generating
facilities. The methodology shall reflect all of the following:
   (1) The value of different products including baseload, peaking,
and as-available electricity.
   (2) All current and anticipated environmental compliance costs,
including mitigation of emissions of greenhouse gases and air
pollution offsets associated with the operation of new generating
facilities.
   (d) (1) The commission shall establish a limitation for each
electrical corporation on the expenditures above the market costs
determined in subdivision (c) for the procurement of all eligible
renewable energy resources that are used to comply with the
electrical corporation's renewables portfolio standard. The cost
limitation shall equal 6 percent of the total bundled electric
revenues recorded by the electrical corporation in 2008 multiplied by
the number of years remaining until 2020. Total bundled electric
revenues shall include revenues collected by the electrical
corporation on behalf of the Department of Water Resources for
procurement activities conducted pursuant to Division 27 (commencing
with Section 80000) of the Water Code.
   (2) The calculation of the above-market costs shall include all
procurement of eligible renewable energy resources that are used to
comply with the electrical corporation's renewables portfolio
standard that are submitted for approval to the commission after
January 1, 2010.
   (3) The above-market costs of procurement do not include any
indirect expenses, including imbalance energy charges, sale of excess
energy, decreased generation from existing resources, or
transmission upgrades.
   (4) Calculations of the above-market costs shall include, as a
reduction to the total above-market costs, procurement from eligible
renewable energy resources that are used to meet the renewables
portfolio standard procurement requirements established pursuant to
paragraph (1) of subdivision (b) that are below the market prices
determined in subdivision (c) for each year.
   (5) In calculating the limit on above-market costs established in
paragraph (1), the commission shall account for the potential that
some procured resources may be delayed or canceled.
                                                      (e) If the cost
limitation for an electrical corporation is insufficient to support
the projected net above-market costs identified in subdivision (d),
the commission shall allow the electrical corporation to refrain from
entering into new contracts or to construct facilities for that
future year beyond the quantity of eligible renewable energy
resources that can be procured at or below the market prices
established in subdivision (c).
   (f) Notwithstanding subdivision (e), if an electrical corporation'
s net annual above-market costs for a future year exceed the
electrical corporation's cost limitation, the electrical corporation
may voluntarily propose to procure eligible renewable energy
resources at above-market prices. Any voluntary procurement under
this paragraph shall be subject to commission approval prior to the
expense being recovered in rates.
   (g) (1) The commission shall monitor the status of the cost
limitation for each electrical corporation in order to ensure
compliance with this article.
   (2) If the commission determines that an electrical corporation
may exceed its cost limitation prior to achieving the renewables
portfolio standard procurement requirements, the commission shall do
all of the following within 60 days of making that determination:
   (A) Investigate and identify the reasons why the electrical
corporation may exceed its annual cost limitation.
   (B) Identify those actions that can be taken to ensure that the
electrical corporation continues to comply with its renewables
portfolio standard procurement requirements.
   (C) Notify the appropriate policy and fiscal committees of the
Legislature that the electrical corporation may exceed its cost
limitation, the reasons why the electrical corporation may exceed its
cost limitation, and those actions that may be taken by the
electrical corporation to comply with the renewables portfolio
standard procurement requirements.
   (3) The commission shall examine mechanisms for mitigating the
potential impact of low fossil fuel prices on the cost limitation of
each electrical corporation and make recommendations to the
Legislature on any changes in law it identifies to mitigate those
impacts.
   (h) The commission shall examine and adopt mechanisms to limit the
potential influence of the market prices established in subdivision
(c) on seller pricing and buyer contract selection.
   (i) The establishment of a renewables portfolio standard shall not
constitute implementation by the commission of the federal Public
Utility Regulatory Policies Act of 1978 (Public Law 95-617).
   (j) The commission shall consult with the Energy Commission in
establishing renewables portfolio standard policies. 
  SEC. 4.    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. 
   SEC. 5.    This bill shall only become operative if
this bill, Assembly Bill 64, and Senate Bill 14 are all enacted and
become effective on or before January 1, 2010.  
  SECTION 1.    Chapter 8.5 (commencing with Section
15560) is added to Division 15 of the Elections Code, to read:
      CHAPTER 8.5.  POSTCANVASS AUDITS


   15560.  For purposes of this chapter:
   (a) "Postcanvass audit" means a public manual tally of the votes
cast in a contest in a percentage of precincts within the
jurisdiction, pursuant to this chapter.
   (b) "Unofficial final results" means the election results upon
completion of the official canvass, as defined in Section 335.5 and
subdivisions (a) to (g), inclusive, of Section 15302, but before
reporting final results to the governing board or the Secretary of
State, or both, as specified in subdivision (h) of Section 15302.
   (c)  "Variance" means a difference between the machine tally and
the postcanvass audit for a contest, including differences due to a
machine or operational malfunction or due to a ballot that has been
marked in a manner that cannot be machine counted.
   (d) "Vote-for-one contest" means an election on a measure or a
contest in an election for an office in which a voter may select only
one candidate.
   (e) "Vote-for-multiple contest" means a contest in an election for
an office in which a voter may select two or more candidates.
   15561.  After an election, each elections official shall determine
the margin of victory within the jurisdiction of that election in
each contest in the election based upon the official canvass results
as follows:
   (a) For a vote-for-one contest, the margin of victory is the
difference between the percentage of overall votes cast for the
winning candidate or position and the percentage of overall votes
cast for the second place candidate or position.
   (b) For a vote-for-multiple contest, the margin of victory is the
difference between the percentage of overall votes cast for the
candidate with the lowest number of votes needed to win a seat and
the percentage of overall votes cast for the candidate with the next
lowest number of votes.
   (c) For a ballot measure contest, including a recall contest, the
margin of victory is the difference between the percentage of votes
cast in favor of the measure and the percentage of overall votes
required for the measure to pass.
   15562.  (a) In an election contest in which the margin of victory,
based upon the official canvass results or the unofficial final
results, as provided in subdivision (b), is less than one-half of 1
percent, the elections official shall conduct a postcanvass audit of
the votes cast in that contest as follows:
   (1) For a statewide contest, the postcanvass audit shall include 2
percent of the precincts, chosen at random, in each county.
   (2) For a legislative or congressional contest, or a contest
involving 100 precincts or more that is not a statewide contest, the
postcanvass audit shall include 5 percent of the precincts in the
jurisdiction in which votes were cast in the contest, chosen at
random.
   (3) For a contest not subject to paragraph (1) or (2), the
postcanvass audit shall include 10 percent of the precincts in each
jurisdiction in which votes were cast in the contest, chosen at
random.
   (4) In lieu of the requirements set forth in paragraphs (1) to
(3), inclusive, an elections official may instead conduct a
postcanvass audit of a higher percentage of randomly selected
precincts. If the postcanvass audit does not include 100 percent of
the precincts involved in the contest, then the elections official
must comply with Section 15571.
   (b) If the unofficial final results indicate that a postcanvass
audit will be required by this chapter, an elections official may
begin the postcanvass audit during the canvass period based on the
unofficial final results.
   15563.  (a) In a contest voted upon in more than one jurisdiction,
the elections official of each jurisdiction in which votes were cast
in the contest shall do the following:
   (1) Determine whether a postcanvass audit is required by Section
15562 by calculating the overall margin of victory in all
jurisdictions in which votes were cast in the contest.
   (2) If a postcanvass audit is required, conduct the audit pursuant
to this chapter separate of any postcanvass audit conducted in
another jurisdiction in which the contest was voted upon, except that
the determination of whether additional precincts must be included
in the postcanvass audit pursuant to Section 15571 shall be
determined based on the overall variance percentage for all
jurisdictions in which votes were cast in the contest after
completion of the initial audit pursuant to Section 15561 in all
jurisdictions.
   (b) For a legislative, congressional, or statewide contest, the
Secretary of State shall determine whether a postcanvass audit is
required based upon the official canvass results and margin of
victory for the entire district for a legislative or congressional
contest or the entire state for a state contest.
   15564.  Before beginning a postcanvass audit, the elections
official shall do the following:
   (a) Provide public notice of the time and place of the random
selection of the precincts to be manually tallied and of the time and
place of the postcanvass audit at least five days prior to the
selection of the precincts.
   (b) Make the official canvass precinct tally results, or the
unofficial final precinct tally results if the audit is being
performed in accordance with subdivision (b) of Section 15562,
available to the public.
   15565.  (a) A postcanvass audit shall commence as soon as possible
after the random selection of precincts and in no event later than
five days after the elections official prepares a certified statement
of the results of the election pursuant to Section 15372. If a
contest voted upon in more than one jurisdiction is subject to a
postcanvass audit pursuant to this chapter, the elections officials
from each jurisdiction shall begin the postcanvass audit not later
than 5 days after the certified statement of results of the election
has been completed in all of the jurisdictions involved in the
contest.
   (b) The elections official shall permit the public to observe the
postcanvass audit process, including the random selection of
precincts. The elections official shall not permit members of the
public to touch ballots, voter verifiable paper audit trail records,
or other official materials used in the postcanvass audit process or
to interfere in any way with the postcanvass audit process.
   (c) Nothing in this chapter permits the examination of ballots and
other materials as permitted in a recount pursuant to Section 15630.

   15566.  (a) Results for ballots manually tallied pursuant to
Section 15360 may be included as part of the postcanvass audit
required by this chapter, provided that ballots tallied after
election night remain segregated and can be tallied separately.
   (b) The elections official shall comply with the tally procedures
established for conducting manual tallies under Section 15360 when
conducting a postelection postcanvass audit required by this chapter,
except that the elections official is not required to include a
report of the results in the certification of the official tally in
accordance with subdivision (e) of Section 15360.
   15567.  An individual performing a postcanvass audit shall perform
the audit by hand without the use of electronic scanning equipment.
At no time during the postcanvass audit process shall the individual
be informed of the corresponding machine tally results. An individual
performing a postcanvass audit shall not be assigned to tally the
results from a precinct in which he or she was a poll worker on
election day.
   15568.  The elections official shall take appropriate measures to
ensure the following:
   (a) That voter verifiable paper audit trail records from direct
recording electronic ballots that were canceled before being cast are
not tallied as valid ballots in the postcanvass audit.
   (b) That a damaged or defective ballot that has been substituted
for by a duplicate copy pursuant to Section 15210 is not tallied as a
valid ballot in the postcanvass audit.
   15569.  The elections official shall establish security procedures
for the secure interim storage of ballots and to detect any
unauthorized access to ballots.
   15570.  An elections official shall document and disclose to the
public any variances. Variances shall be calculated as follows:
   (a) If a postcanvass audit establishes that the machine tally
erroneously attributed a vote for one candidate or measure instead of
another candidate or measure, two variances result because the vote
totals for each candidate or measure are changed by one vote in the
postcanvass audit.
   (b) If the postcanvass audit determines that a vote was cast in a
contest on a ballot that the machine tally interpreted as an
undervote in the contest, one variance results because the machine
tally undervote becomes a vote for a candidate or a vote for or
against a measure in the postcanvass audit.
   15571.  (a) For a contest in which there exists one or more
variances, the elections official shall calculate the percentage of
variance as follows:
   (1) For vote-for-one contests, only variances that narrow the
margin between the winner and any of the losers shall be included in
the total number of variances.
   (2) For vote-for-multiple contests, only variances that narrow the
margin of victory between any of the winners and any of the losers
shall be included in the total number of variances.
   (3) For any contest, variances resulting from ballots cast for
unqualified write-in candidates shall not be included in the total
number of variances.
   (4) After deducting variances in accordance with paragraphs (1) to
(3), inclusive, the elections official shall divide the remaining
number of variances found in the postcanvass audit for the contest by
the total number of votes cast for that contest in precincts
included in the postcanvass audit.
   (b) If the percentage of variance is equal to or greater than 50
percent of the margin of victory for that contest based on the
official canvass results, or based on the unofficial final results if
the audit was performed in accordance with subdivision (b) of
Section 15562, additional precincts shall be manually tallied for
that contest.
   (c) Precincts added to the postcanvass audit pursuant to
subdivision (b) shall be tallied in randomly selected blocks of 5
percent of the precincts in which votes were cast in the contest
until the percentage of variance, recalculated using the method set
forth in subdivision (a), is less than 50 percent of the overall
margin of victory in that contest, or until all votes cast for the
contest in the jurisdiction have been manually tallied, whichever
occurs first.
   (d) If a variance is found between manually tallied voter
verifiable paper audit trail records and corresponding electronic
vote results that cannot be accounted for by some obvious mechanical
problem, the elections official shall preserve the voter verifiable
paper audit trail records, memory cards and devices, and direct
recording electronic voting machines and notify the Secretary of
State in order to investigate the cause of the problem.
   15572.  If a postcanvass audit to which all precincts in the
jurisdiction were subject reveals a different outcome in a contest
than that shown by the machine tally for that contest, the elections
official shall amend the certified statement of results of the
election, prepared pursuant to Section 15372, by entering the result
of the postcanvass audit in each precinct affected, which result
shall, for all purposes thereafter, be the official return of the
precinct for the contest subject to the postcanvass audit.
   (b) The elections official shall submit the amended statement of
the results of the election to the governing body of the jurisdiction
or the Secretary of State, as required for the original statement of
results of the election.
   15573.  (a) The elections official shall keep a log to record the
postcanvass audit process, including the results of each round of
postcanvass auditing for each precinct included in the audit, how
variances were reconciled, and details of actions taken contrary to
this chapter. The elections official shall make the log available to
the public.
   (b) The elections official shall compile and submit to the
Secretary of State a report summarizing the results of a postcanvass
audit required by this chapter. The report shall contain, at a
minimum, the following information:
   (1) For each precinct in the postcanvass audit, a comparison of
the results tallied by machine and the postcanvass audit results,
including undervotes and overvotes.
   (2) Identification of any variances between the machine count and
the postcanvass audit.
   (3) A description of how each identified variance was reconciled.
   15574.  This chapter does not:
   (a) Authorize the opening or auditing of ballots for a precinct
except for the purposes specified in this chapter.
   (b) Limit other provisions of law regarding an election recount or
contest.
   15575.  This chapter does not apply to the following election
contests:
   (a) A political party central committee election, as provided for
in Division 7 (commencing with Section 7050).
   (b) An advisory election, as provided for in Section 9603.
   15576.  The Secretary of State shall adopt regulations consistent
with this chapter and may promulgate regulations to develop a
statistical auditing model that achieves a higher level of
statistical confidence in the audited election results. 

  SEC. 2.    Section 15620 of the Elections Code is
amended to read:
   15620.  (a) Following completion of the official canvass and any
postcanvass audit conducted pursuant to Chapter 8.5 (commencing with
Section 15560), a voter may, within five days thereafter, file with
the elections official responsible for conducting an election in the
county wherein the recount is sought a written request for a recount
of the votes cast for candidates for any office, for slates of
presidential electors, or for or against any measure, provided the
office, slate, or measure is not voted on statewide. The request
shall specify on behalf of which candidate, slate of electors, or
position on a measure (affirmative or negative) it is filed.
   (b) If an election is conducted in more than one county, the
request for the recount may be filed with the elections official of,
and the recount conducted within, any or all of the affected
counties.
   (c) For the purposes of this section "completion of the canvass"
shall be presumed to be that time when the elections official signs
the certified statement of the results of the election except that,
in the case of a city election, if a city council canvasses the
returns itself and does not order the elections official to conduct
the canvass as permitted by Section 10263, "completion of the canvass"
shall be presumed to be that time when the governing body declares
the persons elected or the measures approved or defeated. 

  SEC. 3.    Section 15621 of the Elections Code is
amended to read:
   15621.  (a) Following completion of the official canvass and any
postcanvass audit conducted pursuant to Chapter 8.5 (commencing with
Section 15560), a voter may, within five days beginning on the 29th
day after a statewide election, file with the Secretary of State a
written request for a recount of the votes cast for candidates for
any statewide office or for or against any measure voted on
statewide. The request shall specify in which county or counties the
recount is sought and shall specify on behalf of which candidate,
slate of electors, or position on a measure (affirmative or negative)
it is filed.
   (b) The Secretary of State shall forthwith send by registered mail
one copy of the request to the elections official of each county in
which a recount of the votes is sought.
   (c) All the other provisions of this article shall apply to
recounts conducted under this section.  
  SEC. 4.    Section 16401 of the Elections Code is
amended to read:
   16401.  The contestant shall verify the statement of contest, as
provided by Section 446 of the Code of Civil Procedure, and shall
file it within the following times after the declaration of the
result of the election or of a postcanvass audit conducted pursuant
to Chapter 8.5 (commencing with Section 15560) by the body canvassing
the returns thereof:
   (a) In cases other than cases of a tie, where the contest is
brought on any of the grounds mentioned in subdivision (c) of Section
16100, six months.
   (b) In all cases of tie, 20 days.
   (c) In cases involving presidential electors, 10 days.
   (d) In all other cases, 30 days.  
  SEC. 5.    Section 16421 of the Elections Code is
amended to read:
   16421.  The affidavit shall be filed in the office of the clerk of
the superior court having jurisdiction, within five days after
either the completion of the official canvass or of a postcanvass
audit conducted pursuant to Chapter 8.5 (commencing with Section
15560) by the county last making the declaration.  
  SEC. 6.    If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.