BILL NUMBER: AB 642 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 31, 2011
INTRODUCED BY Assembly Member Charles Calderon
FEBRUARY 16, 2011
An act to relating to economic development.
An act to amend Sections 25741 and 26003 of, and to add Chapter
6 (commencing with Section 7100) to Part 2 of Division 6 of, the
Public Resources Code, re lating to renewable energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 642, as amended, Charles Calderon. California Business
Development Authority. Renewable energy: biomass:
algae.
(1) Existing law authorizes the State Lands Commission to
negotiate various types of leases for public lands, including grazing
leases, recreational leases, oil and gas leases, and mineral leases.
This bill would authorize the commission to enter into a lease for
the development of algae-producing energy and agricultural products.
The bill would require the lease to include specified provisions.
(2) Existing law requires the State Energy Resources Conservation
and Development Commission to administer the Renewable Energy
Resources Program, which provides financial assistance for the
development of renewable electricity generation facilities including
facilities that use biomass.
Existing law requires the California Alternative Energy and
Advanced Transportation Financing Authority to establish a renewable
energy program to provide financial assistance to specified entities
to generate new and renewable energy sources. Existing law defines
"renewable energy" to mean a device or technology that, among other
things, uses biomass for electrical generation.
The California Renewables Portfolio Standard Program requires a
retail seller of electricity to purchase a specified minimum
percentage of electricity generated by eligible renewable energy
resources, including electricity generated through the use of, among
other things, biomass, in any given year as a specified percentage of
total kilowatthours sold to retail end-use customers each calendar
year.
This bill would expressly provide that "biomass" for the above
provisions includes algae.
Existing law provides for various economic development programs
within the state.
This bill would express the intent of the Legislature to enact
legislation to create the California Business Development Authority
in state government.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 6 (commencing with Section
7100) is added to Part 2 of Division 6 of the Public
Resources Code , to read:
CHAPTER 6. LEASES FOR ALGAE PRODUCTION FOR ENERGY AND
AGRICULTURAL USES
7100. The commission may, when it appears to be in the public
interest, negotiate and enter into a lease for the development of
algae-producing energy and agricultural products. The lease shall
include all of the following:
(a) Terms, conditions, and provisions that will protect the
interests of the state with reference to securing payment to the
state of the proper amount or the value of production.
(b) Provisions specifying the methods of operation and standard
requirements for carrying on operations in a proper and workmanlike
manner, the prevention of waste, the protection of the safety and
health of worker, and the liability of the lessee for personal injury
and property damage.
(c) Security for faithful performance of the lessee, including
provisions for the forfeiture of the lease as set forth in Section
6805, and the requirement that the lessee shall, at the time of
execution of the lease, furnish and thereafter maintain a good and
sufficient bond in an amount specified by the commission, in favor of
the state, guaranteeing faithful performance by the lessee of the
terms, covenants, and conditions of the lease and compliance with
this chapter.
(d) Other covenant, conditions, requirements, and reservations as
may be deemed advisable by the commission in effecting the purpose of
this chapter and not inconsistent with any of its provisions.
(e) A provision providing that any provision of the lease executed
under this chapter that purports to deprive the state or a lessee of
a right or benefit secured by law, or that is otherwise inconsistent
with this chapter, is void, and shall be deemed separable from and
without effect upon the valid provision of the lease.
7101. The commission, in issuing a lease under this chapter,
shall reserve to the state the right to lease, sell, or otherwise
dispose of the subsurface rights in the land.
SEC. 2. Section 25741 of the Public
Resources Code is amended to read:
25741. As used in this chapter, the following terms have the
following meaning:
(a) "Delivered" and "delivery" mean the electricity output of an
in-state renewable electricity generation facility that is used to
serve end-use retail customers located within the state. Subject to
verification by the accounting system established by the commission
pursuant to subdivision (b) of Section 399.13 of the Public Utilities
Code, electricity shall be deemed delivered if it is either
generated at a location within the state, or is scheduled for
consumption by California end-use retail customers. Subject to
criteria adopted by the commission, electricity generated by an
eligible renewable energy resource may be considered "delivered"
regardless of whether the electricity is generated at a different
time from consumption by a California end-use customer.
(b) "In-state renewable electricity generation facility" means a
facility that meets all of the following criteria:
(1) The facility uses biomass , including algae , solar
thermal, photovoltaic, wind, geothermal, fuel cells using renewable
fuels, small hydroelectric generation of 30 megawatts or less,
digester gas, municipal solid waste conversion, landfill gas, ocean
wave, ocean thermal, or tidal current, and any additions or
enhancements to the facility using that technology.
(2) The facility satisfies one of the following requirements:
(A) The facility is located in the state or near the border of the
state with the first point of connection to the transmission network
within this state and electricity produced by the facility is
delivered to an in-state location.
(B) The facility has its first point of interconnection to the
transmission network outside the state and satisfies all of the
following requirements:
(i) It is connected to the transmission network within the Western
Electricity Coordinating Council (WECC) service territory.
(ii) It commences initial commercial operation after January 1,
2005.
(iii) Electricity produced by the facility is delivered to an
in-state location.
(iv) It will not cause or contribute to any violation of a
California environmental quality standard or requirement.
(v) If the facility is outside of the United States, it is
developed and operated in a manner that is as protective of the
environment as a similar facility located in the state.
(vi) It participates in the accounting system to verify compliance
with the renewables portfolio standard by retail sellers, once
established by the Energy Commission pursuant to subdivision (b) of
Section 399.13 of the Public Utilities Code.
(C) The facility meets the requirements of clauses (i), (iii),
(iv), (v), and (vi) in subparagraph (B), but does not meet the
requirements of clause (ii) because it commences initial operation
prior to January 1, 2005, if the facility satisfies either of the
following requirements:
(i) The electricity is from incremental generation resulting from
expansion or repowering of the facility.
(ii) The facility has been part of the existing baseline of
eligible renewable energy resources of a retail seller established
pursuant to paragraph (2) of subdivision (b) of Section 399.15 of the
Public Utilities Code or has been part of the existing baseline of
eligible renewable energy resources of a local publicly owned
electric utility established pursuant to Section 387 of the Public
Utilities Code.
(3) For the purposes of this subdivision, "solid waste conversion"
means a technology that uses a noncombustion thermal process to
convert solid waste to a clean-burning fuel for the purpose of
generating electricity, and that meets all of the following criteria:
(A) The technology does not use air or oxygen in the conversion
process, except ambient air to maintain temperature control.
(B) The technology produces no discharges of air contaminants or
emissions, including greenhouse gases as defined in Section 38505 of
the Health and Safety Code.
(C) The technology produces no discharges to surface or
groundwaters of the state.
(D) The technology produces no hazardous wastes.
(E) To the maximum extent feasible, the technology removes all
recyclable materials and marketable green waste compostable materials
from the solid waste stream prior to the conversion process and the
owner or operator of the facility certifies that those materials will
be recycled or composted.
(F) The facility at which the technology is used is in compliance
with all applicable laws, regulations, and ordinances.
(G) The technology meets any other conditions established by the
commission.
(H) The facility certifies that any local agency sending solid
waste to the facility diverted at least 30 percent of all solid waste
it collects through solid waste reduction, recycling, and
composting. For purposes of this paragraph, "local agency" means any
city, county, or special district, or subdivision thereof, which is
authorized to provide solid waste handling services.
(c) "Procurement entity" means any person or corporation that
enters into an agreement with a retail seller to procure eligible
renewable energy resources pursuant to subdivision (f) of Section
399.14 of the Public Utilities Code.
(d) "Renewable energy public goods charge" means that portion of
the nonbypassable system benefits charge authorized to be collected
and to be transferred to the Renewable Resource Trust Fund pursuant
to the Reliable Electric Service Investments Act (Article 15
(commencing with Section 399) of Chapter 2.3 of Part 1 of Division 1
of the Public Utilities Code).
(e) "Report" means the report entitled "Investing in Renewable
Electricity Generation in California" (June 2001, Publication Number
P500-00-022) submitted to the Governor and the Legislature by the
commission.
(f) "Retail seller" means a "retail seller" as defined in Section
399.12 of the Public Utilities Code.
SEC. 3. Section 26003 of the Public
Resources Code is amended to read:
26003. As used in this division, unless the context otherwise
requires:
(a) "Authority" means the California Alternative Energy and
Advanced Transportation Financing Authority established pursuant to
Section 26004, and any board, commission, department, or officer
succeeding to the functions of the authority, or to which the powers
conferred upon the authority by this division shall be given.
(b) "Cost" as applied to a project or portion of the project
financed under this division means all or part of the cost of
construction and acquisition of all lands, structures, real or
personal property or an interest in the real or personal property,
rights, rights-of-way, franchises, easements, and interests acquired
or used for a project; the cost of demolishing or removing any
buildings or structures on land so acquired, including the cost of
acquiring any lands to which those buildings or structures may be
moved; the cost of all machinery, equipment, and furnishings,
financing charges, interest prior to, during, and for a period after,
completion of construction as determined by the authority; the cost
of the purchase or sale of energy derived from an alternative source
pursuant to subdivision (g) of Section 26011; provisions for working
capital; reserves for principal and interest and for extensions,
enlargements, additions, replacements, renovations, and improvements;
the cost of architectural, engineering, financial, accounting,
auditing and legal services, plans, specifications, estimates,
administrative expenses, and other expenses necessary or incident to
determining the feasibility of constructing any project or incident
to the construction, acquisition, or financing of a project.
(c) (1) "Alternative sources" means the application of
cogeneration technology, as defined in Section 25134; the
conservation of energy; or the use of solar, biomass, wind,
geothermal, hydroelectricity under 30 megawatts, or any other source
of energy, the efficient use of which will reduce the use of fossil
and nuclear fuels.
(2) "Alternative sources" does not include a hydroelectric
facility that does not meet state laws pertaining to the control,
appropriation, use, and distribution of water, including, but not
limited to, the obtaining of applicable licenses and permits.
(d) "Advanced transportation technologies" means emerging
commercially competitive transportation-related technologies
identified by the authority as capable of creating long-term, high
value-added jobs for Californians while enhancing the state's
commitment to energy conservation, pollution reduction, and
transportation efficiency. Those technologies may include, but are
not limited to, any of the following:
(1) Intelligent vehicle highway systems.
(2) Advanced telecommunications for transportation.
(3) Command, control, and communications for public transit
vehicles and systems.
(4) Electric vehicles and ultralow-emission vehicles.
(5) High-speed rail and magnetic levitation passenger systems.
(6) Fuel cells.
(e) "Financial assistance" includes, but is not limited to,
either, or any combination, of the following:
(1) Loans, loan loss reserves, interest rate reductions, proceeds
of bonds issued by the authority, insurance, guarantees or other
credit enhancements or liquidity facilities, contributions of money,
property, labor, or other items of value, or any combination thereof,
as determined by, and approved by the resolution of, the board.
(2) Any other type of assistance the authority determines is
appropriate.
(f) "Participating party" means either of the following:
(1) A person , or an entity or group of entities
engaged in business or operations in the state, whether organized for
profit or not for profit, that does either of the following:
(A) Applies for financial assistance from the authority for the
purpose of implementing a project in a manner prescribed by the
authority.
(B) Participates in the purchase or sale of energy derived from an
alternative source pursuant to subdivision (g) of Section 26011.
(2) A public agency or nonprofit corporation that does either of
the following:
(A) Applies for financial assistance from the authority for the
purpose of implementing a project in a manner prescribed by the
authority.
(B) Participates in the purchase or sale of energy derived from an
alternative source pursuant to subdivision (g) of Section 26011.
(g) (1) "Project" means a land, building, improvement to the land
or building, rehabilitation, work, property, or structure, real or
personal, stationary or mobile, including, but not limited to,
machinery and equipment, whether or not in existence or under
construction, that utilizes, or is designed to utilize, an
alternative source, or that is utilized for the design, technology
transfer, manufacture, production, assembly, distribution, or service
of advanced transportation technologies, or an arrangement for the
purchase, including prepayment, or sale of energy derived from an
alternative source pursuant to subdivision (g) of Section 26011.
(2) "Project," for the purposes of Section 26011.8, means any
tangible personal property that is utilized for the design,
manufacture, production, or assembly of advanced transportation
technologies or alternative source products, components, or systems.
(h) "Public agency" means a federal or state agency, department,
board, authority, state or community college, university, or
commission, or a county, city and county, city, regional agency,
public district, school district, or other political entity.
(i) (1) "Renewable energy" means a device or technology that
conserves or produces heat, processes heat, space heating, water
heating, steam, space cooling, refrigeration, mechanical energy,
electricity, or energy in any form convertible to these uses, that
does not expend or use conventional energy fuels, and that uses any
of the following electrical generation technologies:
(A) Biomass , including algae .
(B) Solar thermal.
(C) Photovoltaic.
(D) Wind.
(E) Geothermal.
(2) For purposes of this subdivision, "conventional energy fuel"
means any fuel derived from petroleum deposits, including, but not
limited to, oil, heating oil, gasoline, fuel oil, or natural gas,
including liquefied natural gas, or nuclear fissionable materials.
(3) Notwithstanding paragraph (1), for purposes of this section,
"renewable energy" also means ultralow-emission equipment for energy
generation based on thermal energy systems such as natural gas
turbines and fuel cells.
(j) "Revenue" means all rents, receipts, purchase payments, loan
repayments, and all other income or receipts derived by the authority
from a project, or the sale, lease, or other disposition of
alternative source or advanced transportation technology facilities,
or the making of loans to finance alternative source or advanced
transportation technology facilities, and any income or revenue
derived from the investment of money in any fund or account of the
authority.
SECTION 1. It is the intent of the Legislature
to enact legislation to create the California Business Development
Authority in state government.