BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 1130 HEARING: 4/11/12
AUTHOR: deLeón FISCAL: Yes
VERSION: 2/21/12 TAX LEVY: No
CONSULTANT: Grinnell
COMMERCIAL BUILDING ENERGY RETROFIT FINANCING ACT OF 2012
Enacts the Commercial Building Energy Retrofit Act of 2012
Background and Existing Law
When public agencies issue bonds, they borrow money from
investors, who provide cash in exchange for the agencies'
commitment to repay the principal amount of the bond plus
interest in the future. Bonds are divided into two
categories: revenue bonds, which repay investors out of
revenue generated from the project the agency buys with
bond proceeds, like a parking garage, and
general-obligation bonds, which the state pays out of
general revenues and is guaranteed by the agency's full
faith and credit.
California relies on the California Constitution and the
state's General Obligation Bond Law to issue
general-obligation debt. The Constitution allows the
Legislature to authorize general obligation bonds for
specific purposes with a two-thirds vote of the Assembly
and Senate, as it did with the Safe, Clean, and Reliable
Drinking Water Supply Act (SBx7 2, Cogdill, 2010), but must
be enacted by majority vote of the state's electorate.
State law allows many agencies to issue revenue bonds or
other credit instruments without voter approval.
The California Alternative Energy and Advanced
Transportation Financing Authority (CAEATFA) provides
financing for facilities that use alternative energy
sources and technologies. CAEATFA can issue revenue bonds,
make loans, loan loss reserves, and loan guarantees, as
well as other financial instruments to develop and
commercialize advanced transportation technologies that
conserve energy, reduce air pollution, and promote economic
SB 1130 (deLeón) -- 2/21/11 -- Page 2
development and jobs. However, state law limits CAEATFA's
total debt to $1 billion. CAEATFA's board, composed of
Treasurer, Controller, Director of Finance, Chairperson of
the Energy Commission and President of the Public Utilities
Commission, decides which projects to assist.
The California Constitution establishes the Board of
Equalization (BOE) as a five-member board composed of four
members elected by each district plus the State Controller.
Currently, BOE administers 34 separate fee programs, in
addition to tis duty to administer the state sales and use
tax and excise taxes.
Proposed Law
Senate Bill 1130 enacts the Commercial Building Energy
Retrofit Financing Program, administered by CAEATFA, to
help provide benefits from alternative energy and energy
efficiency improvements to participating owners of
commercial buildings. The Program provides financial
assistance to use one or more energy efficiency specialists
to retrofit the property with one or more alternative
energy sources or renewable energy improvements. Revenue
bonds or a short-term, revolving line of credit issued by
CAETFA provide the proceeds to pay for the improvements,
which are subsequently repaid by property owners. CAEATFA
may only fund those projects where the long-term savings
provided by the energy efficiency improvements exceed its
cost. Applicants must agree to recording an energy
remittance payment agreement on the eligible building to
secure repayment.
I. Application. First, CAEATFA must establish an
application process that may include one or more deadlines.
CAEATFA may charge an application fee to reimburse it for
costs incurred to review applications, which must be
disclosed to the applicant along with the loan loss reserve
fee and interest rate charged before the applicant submits
the application. The bill creates the Administrative
Account in the Commercial Building Energy Retrofit Debt
Servicing Fund (discussed below), where CAEATFA must
deposit application fees. The measure continuously
appropriates this account to CAETFA to implement the
program.
CAEATFA must also establish underwriting guidelines that
SB 1130 (deLeón) -- 2/21/11 -- Page 3
consider an applicant's qualification and other appropriate
factors, including credit reports and loan-to-value ratios,
necessary to obtain a bond rating for bonds issued under
the program.
Second, the commercial property owner desiring financial
assistance under the program applies to CAEATFA; the
application constitutes consent to record the energy
remittance repayment agreement. The application must state
in 12-point type that it serves as voluntary consent from
the property owner to record the agreement on the deed of
buildings and a lien against the property to secure
repayment for improvements authorized under the program.
The owner must include the following information in the
application:
Name, business address, and email address of all of
the owners of the eligible building,
Names and contact information for all entities with
a secured lien on the eligible building,
The total dollar amount of liens recorded on the
eligible building,
An appraisal of the value of the eligible building,
A detailed description of the energy efficiency
improvements,
Name of the financial institution providing
financing for the improvements and the structure of
the loan,
Any information that the authority requires to
verify that the owner will completer the improvement,
An analysis by an energy efficiency specialist to
quantify the costs of the energy efficiency
improvements, and total energy and water costs savings
realized by the owner. The analysis shall estimate
carbon impacts, and include a cash flow analysis,
Any other information CAEATFA requires, and
A detailed description of the property and the
transactional activities associated with the
retrofits, including all transactional costs and other
information deemed necessary by the authority.
II. Project Requirements. CAEATFA may only provide
financial assistance to applications where:
The costs of the energy efficiency improvements do
not exceed 10% of the value of the building according
to the appraisal required in the application.
SB 1130 (deLeón) -- 2/21/11 -- Page 4
For energy efficiency projects that exceed
$500,000, the contractor installing the improvements
or the property owner obtains a guarantee on the
energy and water costs savings detailed in the
application's analysis by obtaining a security in the
full amount of the savings. The security shall be
energy savings insurance issued by an A.M. Best "A" or
better rated carrier, an investment grade guarantee,
energy efficiency bond, or letter of credit or cash
collateral.
III. Repayment. CAEATFA and the applicant shall establish
a schedule of repayment required by the agreement and
collected by BOE, which then deposits any moneys into the
Commercial Building Energy Retrofit Debt Servicing Fund,
established by the bill and continuously appropriated to
repay bonds under the program and defraying any of the
Treasurer's direct or indirect costs under the program.
BOE may also charge a fee to the owner of the building to
cover its costs to implement this program. The bill
establishes the Collection Administration Account in the
Commercial Building Energy Retrofit Debt Servicing Fund,
and directs BOE to deposit funds from the fee into the
account, which is continuously appropriated to BOE for the
costs of implementing the program
The bill also creates the Loan Loss Reserve Account in the
Commercial Building Energy Retrofit Debt Servicing Fund,
and directs BOE to deposit the portion of the contractual
remittance that is the loan loss reserve fee into the
account, which is continuously appropriated to the
Treasurer to pay outstanding loan balances due under an
energy remittance repayment agreement on a building that
has been foreclosed upon and the proceeds generated from
the foreclosure are insufficient to pay any past due
payments.
The first installment becomes due and owing within 30 days
of the recording of the energy remittance repayment
agreement, and each subsequent installment becomes due and
owing 30 days after the previous one. The repayment period
cannot exceed the useful life of the energy efficiency
improvements, or 20 years, whichever is shorter.
Upon failure of the applicant to pay any installment, BOE
SB 1130 (deLeón) -- 2/21/11 -- Page 5
or CAEATFA may assess a penalty that is a percentage of the
delinquent payment. Either agency may also declare the
entire outstanding balance amount of the agreement,
including penalties, costs, and interest, immediately due
and owing, then foreclose on the agreement. Within an
unspecified amount of time, BOE shall provide CAEATFA and
the applicant and notice of default, and provide an
unspecified number of days for the applicant to cure the
default.
Additionally, CAEATFA shall notify the county tax collector
in the county in which the building is located if the
applicant fails to cure the default, and the tax collector
shall sell the building according to statutes guiding sales
of tax-defaulted property. Tax sale revenues shall be
distributed to satisfy liens on the eligible building in
accordance with priority of the liens as provided by law.
Applicants may pay the entire unpaid balance of the
agreement plus interest without prepayment penalty. Upon
full payment of the balance, BOE shall notify CAEATFA,
which shall record a release of the lien within an
unspecified period.
IV. Approval and Modification. CAEATFA must hold a public
hearing to approve an application for inclusion into the
loan portfolio, or to modify a previously approved
application. CAEATFA must post a notice of the hearing on
its website and provide notice to any existing lienholders
of a building eligible for financial assistance 30 days
prior to the hearing. The notice must inform lienholders
that any complaints or objections to the application must
be submitted to CAEATFA in writing prior to the hearing.
The notice must specify:
The name of the applicant,
The address of the eligible building,
The amount required to be repaid by the energy
remittance repayment agreement,
The date and place of the hearing,
The repayment schedule,
The interest rate, and
Any relevant modification.
CAEATFA shall consider the following items when considering
an application:
SB 1130 (deLeón) -- 2/21/11 -- Page 6
Whether loan recipients are legal owners of the
underlying property.
Whether loan recipients are current on any
outstanding mortgage and property tax payments.
Whether loan recipients are in default of in
bankruptcy proceedings.
Whether retrofits finance buy the program follow
applicable standards of energy efficiency.
CAEATFA shall approve applications by adopting a resolution
approving the application and authorizing recording the
repayment agreement, including the amount to be repaid, the
interest rate, and the repayment schedule. CAEATFA must
also approve any modifications by resolution. CAEATFA
shall send the resolution to BOE 30 days after adoption, or
30 days after a final, nonappealable judgment, and also
record the energy remittance repayment agreement with the
county in which the eligible building is located. Upon
recording, CAEATFA shall include the approved application
in the portfolio.
V. Liens. SB 1130 provides that any lien recorded to
secure repayment is subordinate to all existing liens, but
superior to any recorded thereafter. A tax sale does not
extinguish the obligation to satisfy the repayment
agreement. In the event of a foreclosure, the payment
shall not be extinguished unless the outstanding balance,
including penalties and interest is fully paid through the
foreclosure proceeding.
Additionally, a lienholder that has submitted a complaint
or objection may bring an action in the superior court an
action challenging the adoption of the resolution with the
superior court that has jurisdiction over the eligible
building. The building owner shall be the real party in
interest of such an action.
VI. Financing. The bill provides two ways to fund
financial assistance to the owners of commercial and
residential buildings.
First, the measure allows CAEATFA to develop a request for
proposal to contract with one or more financial
institutions to secure a short-term, revolving credit
facility (warehouse line of credit) for the purpose of
creating an interim financing mechanism for the loans that
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would be aggregated for the purposes of issuing a revenue
bond. CAEATFA may draw on the line of credit based on
adherence to underwriting criteria and standards of
creditworthiness it establishes to fund origination of
direct loans to qualified applicants or purchase or acquire
secondary market loans from financial institutions.
CAEATFA shall develop a request for proposal to contract
with an outside program administrator that will work with
it and a financial institution to identify the appropriate
underwriting criteria, loan processing procedures, loan
servicing and monitoring guidelines, and bond financing
parameters.
Second, the bill allows CAEATFA to incur indebtedness and
issue and renew negotiable bonds, notes, debentures, or
other securities of any kind or class for the purposes of
the program; CAEATFA already allows the issuance of
identical instruments for other purposes. All indebtedness
is payable solely from moneys received pursuant to this
program and proceeds of negotiable bonds and other
instruments, but would be subject to CAEATFA's general cap
of $1 billion. The bill does not specify that maximum
amount of debt.
CAEATFA shall semiannually meet to adopt a resolution to
issue bonds to generate sufficient money to fund approved
applications in the portfolio or to repay an outstanding
balance of a qualified applicant funded by the warehouse
line of credit. CAEATFA may issue bond anticipation notes
in advance of selling the bond. The notes may be renewed
from time to time, and may be paid from the proceeds of the
sale of the bond. Notes shall have a maximum maturity of
two years. All notes and bonds shall be general
obligations of the authority payable from revenues or
moneys received under the program, subject only to
agreements with holders of bonds or any other party.
CAEATFA can also expressly provide that bonds, notes, and
other obligations are not general obligations and not
payable from revenues or money payable from revenues under
the program. CAEATFA may also issue refunding bonds
according to procedures in the bill.
CAEATFA may authorize by resolution the issuance of term
bonds or serial bonds. The bonds shall bear the interest
rates maturity dates and times, but the measure does not
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specify the maximum maturity date. CAEATFA can direct the
Treasurer to sell the bonds within 60 days of receipts of a
resolution, although it may extend the period. The
Treasurer may sell bond at public or private sales, at
below par value (with a maximum discount of 6% of par), or
on any other terms CAEATFA deems fit. The Treasurer may
issue interim receipts, certificates, or temporary bonds
that shall be exchanged for definitive bonds.
The bond resolution may contain provisions that shall be a
part of the contract with the bondholders that:
Pledge money collected from payments from the
portfolio of approved applications funded by the bonds
to secure the bonds.
Setting aside reserves or sinking funds, and
regulate the reserves and sinking funds.
Limit the right of CAEATFA to restrict or regulate
the use of the project funded by bond proceeds, the
purposes that bond proceeds may be used for, or the
issuance of future bonds.
The procedures to abrogate or amend the contract
with bondholders.
Limit CAEATFA operating, administrative, or other
expenses.
Defining acts or omissions that constitute default,
and providing remedies and rights to bondholders in a
default event.
The bill additionally provides that:
Neither CAEATFA members nor persons executing bond
or note sales are personally liable for the debts,
CAEATFA may purchase its own bonds and notes out of
any funds available,
CAEATFA may issue bonds secured by a trust
agreement between it and a corporate trustee with
trust company powers or the Treasurer. The trust
agreement may pledge revenues received under the
program, and provide for and enforce the rights of
bondholders. The trust company may provide
indemnifying bonds or pledge other securities as
CAEATFA requires.
Bonds issued under the program are legal
investments for all trust funds, insurance companies,
banks, savings and loan associations, investment
SB 1130 (deLeón) -- 2/21/11 -- Page 9
companies, state school funds, or local agency
investment funds. The bonds may also be used as
securities legally deposited to secure public funds.
SB 1130 states that bonds issued under the program shall
not be deemed to constitute a debt or liability of the
state, serve as a pledge of the state's full faith and
credit or any authority except CAEATFA, or obligate the
state or any political subdivision to make an appropriation
to pay the bonds. This statement must appear on the face
of all the bonds.
The measure states that bonds issued under this section
shall be exempt from state taxation, and additionally
directs CAEATFA to apply to the United States Department of
the Treasury under the Energy Tax Incentive Act of 2005 to
issue tax advantaged bonds under the federal Clean
Renewable Energy Bonds program or any other applicable
program.
The bill additionally provides that a local agency that has
issued revenue bonds to provide financial assistance to
commercial and residential property owners may apply to
CAEATFA for participation. If CAEATFA approves the
application from the local government, and issues a bond
for the portfolio in which that application is located, it
shall purchase all outstanding revenue bonds issued by the
local agency. Upon purchase, CAEATFA succeeds to all
rights conferred upon the bondholder by those revenue
bonds, and the local agency shall remit revenue necessary
to secure the bonds to BOE.
VII. CAEATFA. The measure additionally directs CAEATFA
to:
Market the program to owners of eligible property,
and to encourage owners to obtain the special benefits
of completing energy improvements.
Establish standards, guidelines, and procedures
necessary to ensure the financial stability of the
program.
Collaborate with the State Energy Resources
Conservation and Development Commission to establish
qualifications for contractors to construct or install
energy efficiency improvements.
Borrow funds necessary to meet necessary expenses
for initial organization from the State Energy
SB 1130 (deLeón) -- 2/21/11 -- Page 10
Resources Conservation and Development Special Account
in the General Fund. CAEATFA must repay the funds
with interest within a reasonable time.
Contract with any party, public or private, to:
o Monitor the quality of energy efficiency
improvements
o Measure the total energy savings achieved
by the program
o Monitor total number of program
participants
o Determine total amount paid to
contractors
o Calculate the number of jobs created by
the program, the total number of defaults, total
losses from defaults, and the total dollar amount
of bonds issued by the authority.
o Develop a model energy aligned lease
provision that modifies a commercial lease
agreement allowing the owners to recover the
costs of the energy efficiency improvements that
result in operational savings based on the useful
life of the retrofit, upon agreement between the
owner and tenants. The model energy aligned
lease provision shall protect tenants from the
underperformance of the energy efficiency
retrofits.
VIII. Other Provisions. The bill requires the Bureau of
State Audits to perform a performance audit of the program
no later than June 30, 2014, and every five years
thereafter. The State Auditor shall prepare a report and
recommendations on each audit conducted, and present the
report and recommendations to the Speaker of the Assembly
and the President Pro Tempore of the Senate.
The bill defines many of its terms, and makes several
legislative findings and declarations.
State Revenue Impact
No estimate.
Comments
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1. Purpose of the bill . According to the Author, "Senate
Bill 1130 represents a win-win situation for California's
environment and our economy. SB 1130 creates the
statewide Building Employment Through Energy Retrofitting
(BETER) program, providing a market-driven plan that will
make energy efficiency upgrades an affordable undertaking
for commercial borrowers, while putting our construction
labor workforce back to work. Commercial banks have $2
trillion sitting on the side lines nationwide, meanwhile
hundreds of thousands of Californians in the construction
trade are without jobs. This bill will help put those
out-of-work skilled construction workers back to work, and
open the door to expanding the green technology job
market."
2. Growing up . SB 1130 allows CAEATFA to issue revenue
bonds and take out short-term lines of credit to fund
energy efficiency and renewable power projects, an
initiative that has not been previously attempted either in
California state government or the private sector. For
many years, CAEATFA was a mostly dormant authority within
the State Treasurers' Office, having issued $184 million in
conduit bonds between 1984 and 1995. In 2009, then
Governor Schwarzenegger used CAEATFA to assist a joint
venture between Tesla and Toyota Motors to purchase the
NUMMI assembly plant in Fremont, California where the two
companies focus on manufacturing hybrid and electric
vehicles, including the TESLA brand, by exempting equipment
purchased by Tesla from the sales and use tax. In 2010,
the Legislature authorized CAEATFA to provide eligible
projects financial assistance in the form of a sales and
use tax exemption on property used for the "design,
manufacture, production, or assembly" of either advanced
transportation technologies or alternative energy source
products, components or system (SB 71, Padilla).
However, unlike existing programs, SB 1130 allows the
authority to essentially issue structured finance products
composed of asset-backed securities in its own name; each
approved application will likely be funded out of a
short-term line of credit secured by CAEATFA. The
application then goes into a portfolio, which is then sold
as a bond to a third-party investor, which repays the
short-term line of credit. By directing CAEATFA to
construct and market structured finance products similar to
large investments banks, SB 1130 asks a lot of an agency
SB 1130 (deLeón) -- 2/21/11 -- Page 12
little used until recently. For many years, CAEATFA has
one employee, and is now up to eight. While the measure
allows CAEATFA to contract for financial expertise and
advice, does it have the resources, capacity, and track
record to know that the contractor is providing good advice
about highly complex, untried transactions? The Committee
may wish to consider whether this expansion of authority is
merited, especially when demand is uncertain.
3. Blankety blank . SB 1130 contains blanks where numbers
are needed to ensure program functionality and
accountability, limit financial risk, and allow CAEATFA to
appropriately understand legislative intent. Parts of the
bill with blanks include:
The percentage of the financing costs that is the
loan loss reserve fee.
The ratio of loan balance to actual value necessary
to apply for financial assistance.
The number of days after default when the BOE must
notice the authority and the applicant with a notice
of default, and the number of days the applicant has
to cure default.
The cap on the amount of total debt CAEATFA may
issue under the program.
The maximum years for a bond issued under the
program to mature.
The Committee may wish to consider moving forward a bill
that leaves several critical components unresolved.
4. Of free markets . SB 1130 allows CAEATFA to issue
revenue bonds or take out lines of credit to provide
financial assistance to building owners who install energy
efficiency or renewable power projects. The owners repay
CAEATFA by way of BOE over the useful life of the
improvement, and CAEATFA then repays its bondholders or
credit issuers with those repayments. While some private
market securitization of solar energy projects exists, most
demand has been spurred by federal tax credits. So farm
neither the public nor the private sector has yet to assert
itself in this market at the scale contemplated by this
bill, and future demand for these improvements is highly
uncertain. Generally, the private sector can better price
risk than the public sector. Given the relative youth of
the market for energy efficiency and renewable power
improvements, the unique structure of this program, and the
challenge facing CAEATFA to implement the program discussed
SB 1130 (deLeón) -- 2/21/11 -- Page 13
above, is this measure a premature venture that doesn't
adequately consider the risks? The Legislature may wish to
consider deferring action on this bill until the private
sector develops a sustainable model for the long-term
financing of these kinds of improvements.
5. Sons of PACE ? The Property Assessed Clean Energy Bond
Program (PACE) allows municipalities to accelerate the
retrofitting of residential and commercial buildings with
renewable energy and energy efficiency improvements. Local
agencies issue bonds, then loan the proceeds to property
owners to finance energy retrofits, who then repay their
loans over 20 years via an annual assessment on their
property tax bill. However, given declining property
values, lienholders are reluctant to allow additional debt
secured by the property, fearing they will be paid less
upon sale or foreclosure of the property because property
tax liens are superior to other debt. In July, 2010, the
Federal Housing Finance Agency, which oversees the Federal
National Mortgage Association or "Fannie Mae," and the
Federal Loan Mortgage Corporation or Freddie Mac, stopped
consenting to purchase loans with PACE loans, thereby
severely restricting PACE for properties with mortgages
they own or securitized. SB 1130 seeks to fill the gap
left by FHFA's decision to resist new PACE loans; however,
it is not the only effort to revive PACE. The California
Public Utilities Commission in a proposed decision issued
on March 20, 2012 is considering implementing an on-bill
financing program, essentially charging investor-owned
utility customers a separate line item on a bill, to
finance PACE projects. The Committee may wish to consider
whether PACE truly needs to be resuscitated, and whether
this model is superior to the CPUC's ideas.
6. Getting closure . The PACE program provided creditors
security that they would be repaid because property tax
liens are always senior; if the house is sold in
foreclosure or a tax sale, these creditors were paid while
subsequent lienholders may suffer losses. The lien order
led to FHFA's decision not to purchase loans with PACE
loans. SB 1130's solution is different. Instead of
priority lien status, the energy remittance repayment
agreement adheres to the traditional "first in line, first
by right" ordering, meaning that liens recorded before the
SB 1130 lien must be satisfied first, and liens recorded
after aren't paid until the SB 1130 is satisfied. However,
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the bill directs county tax collectors to foreclose at the
direction of BOE or CAEATFA according to law governing
sales for delinquent property taxes, which is problematic
for several reasons: first, a property could be current on
its mortgage and property taxes, yet the bill requires
foreclosure when an applicant is delinquent in repaying the
energy agreement. Second, tax collectors must acquire the
consent of its board of supervisors to sell a property in
tax sale, which may not be forthcoming, especially if the
property is current on its property taxes. Third, SB 1130
provides an allocation of tax sale proceeds that conflicts
with existing tax sale law. Lastly, even if these
conflicts are resolved, requiring tax collectors to perform
this function would likely be a reimbursable state mandated
local program. Suggested amendments below would strike the
involvement of the tax collector, but without the ability
to compel payment through foreclosure, thereby diminishing
the solidity of the revenue stream, and placing additional
risk on prospective bondholders, who would likely demand a
higher interest rate, raising the cost of borrowing for
CAEATFA.
7. Suggested Substantive Amendments . Committee Staff
recommends the following substantive amendments:
Develop a process for CAEATFA to calculate loan
loss reserve requirements, loan loss reserve fee, and
interest rate (page 9, after line 4).
Provide standards for acceptable commercial
property appraisals from applicants (page 9, line 33).
Lower the acceptable ratio of liens to appraised
value from 85% to 65% (page 10, line 20).
Strike the requirement for contractors to obtain
securities (page 10, line 23)
Limit forms of security solely to energy savings
insurance (page 10, lines 32 to 34).
Provide a single monthly due date for payment, and
require electronic payment of agreement amounts. (page
10, line 32)
Remove BOE as an agent that may foreclose. (page
11, line 15)
Delete direction to tax collectors to foreclose and
direction of tax sale proceeds. (page 11, lines 26
through 33)
Delete Sections 26226 that limits judicial remedies
that lienholders would enjoy but for the sections, and
renumber subsequent sections (page 13, lines 32
SB 1130 (deLeón) -- 2/21/11 -- Page 15
through 38, and page 14, lines 1 through 3).
Delete requirement for CAEATFA to purchase all
conforming bonds from a local agency if it approves
the local agency application by striking "shall," and
inserting "may," and striking "all." (page 14, line
30)
Apply general fund protections currently in the
bill applying to bonds to the short-term revolving
line of credit (warehouse line) of by inserting
"Credit issued under the provisions of this division
shall not be deemed to constitute a debt or liability
of the state or of any political subdivision thereof,
other than the authority, or a pledge of the faith and
credit of the state or of any such political
subdivision, other than the authority, but shall be
payable solely from the funds provided therefor. All
such credit instruments shall contain a statement to
the following effect: 'Neither the faith and credit
nor the taxing power of the State of California is
pledged to the payment of principal and interest on
this credit instrument.'"(page 15, line 39, after
"26242").
Delete authority for CAEATFA to use short-term
revolving line of credit to purchase loans on the
secondary market (page 16, strike lines 4 and 5).
Additionally clarify general fund protections on
page 17 by striking line 13, on line 14, striking
"authority," on line 16, after "division," striking
"subject only to any," strike lines 17 and 18, and on
line 19, striking "to any agreements with the
participating party."
Delete ability for CAEATFA to require Treasurer to
sell bonds within 60 days by striking on line 35, "the
bonds or notes shall be sold within" strike lines 36
through 38, inclusive.
Allow CAEATFA and BOE to issue regulations to
implement the program. (End of Bill)
Delete the ability of CAEATFA to modify previously
granted applications (several places)
8. Suggested Technical Amendments . Committee Staff
recommends the following technical amendments:
Clarity:
o On Page 6, line 28, strike "actual," and
insert "appraised."
o On Page 8, line 15, strike "on terms such
SB 1130 (deLeón) -- 2/21/11 -- Page 16
that," and insert "when."
o On Page 10, line 1, before "information,"
insert "any."
o On Page 10, line 1, make proposed 26219
subdivision (k) of 26218, and renumber 26219.5 as
26219.
o On Page 10, Line 16, before ""The costs,"
insert "the Authority may provide financial
assistance only for those applications that meet
all of the following conditions," on lines 17,
20, and 23, strike "shall," and on lines 17 and
20 insert "do."
o On Page 10, line 17, strike "estimated,"
and insert "appraised."
o On Page 11, line 9, strike "be consistent
with" and insert "calculated using."
o On Page 12, line 36, strike "all of the
following," and insert "the creditworthiness of
the applicant and the effectiveness of the energy
efficiency or renewable power project applying
the following criteria, including, but not
limited to:"
Consolidate terms:
o Use "retrofit or improvement" wherever
either word is used on its own.
o Insert "renewable energy or" before any
mention of energy efficiency, and vice versa.
o Substitute "renewable energy" for
"alternative energy," wherever it appears.
o Substitute references to "liens on the
building," to "liens on the property."
Support and Opposition (4/5/12)
Support : State Controller John Chiang (Sponsor).
Opposition : Construction Employers' Association (Unless
Amended)