BILL ANALYSIS �
AB 2045
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Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Roger Dickinson, Chair
AB 2045 (Rendon) - As Introduced: February 20, 2014
SUBJECT : Energy improvements: financing.
SUMMARY : Establishes the Nonresidential Real Property Energy
Retrofit Financing Act of 2014 (the Act) to be administered by
the California Energy Commission (CEC) to create a financing
program for energy efficiency improvements in nonresidential real
property. Specifically, this bill :
1)States that the purpose is to facilitate private financing to
enable nonresidential real property owners to invest in clean
energy improvements, renewable energy, and conservation to
incentivize private equity managers to invest in clean energy
improvements, integrate the smart energy economy, and to
stimulate the state economy by directly creating jobs.
2)Specifies that the Nonresidential Real Property Energy Retrofit
Financing Program (the Program) shall provide the special
benefits of water efficiency improvements, renewable energy
improvements, and building energy efficiency improvements to
owners of eligible real properties who voluntarily participate
in the program by establishing, developing, financing, and
administering a program to assist those owners in completing
improvements.
3)Defines terms used in the Act, including in part:
a) "Alternative sources of energy" as energy from renewable
cogeneration or gas-fired cogeneration technology that meets
the greenhouse gas (GHG) emissions and efficiency standards
in Self-Generation Incentive Program (SGIP), energy storage
technologies, or energy from solar, biomass, wind or
geothermal systems, or fuel cells. Specifies that
alternative energy systems shall be sized appropriately to
offset part or all of the applicant's electricity demand and
shall be located on-site.
b) "Conventional energy fuel" as any of the following:
i) A fuel derived from petroleum deposits, as specified;
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ii) Natural gas, including liquefied natural gas;
iii) Nuclear fissionable materials; and,
iv) Coal.
c) "Eligible real property" as a nonresidential building
that completed construction on or before January 1, 2015 and
located within the state.
d) "Energy remittance repayment agreement" (agreement) as a
contractual agreement between an eligible real property
owner and the CEC, secured by a lien, that establishes the
repayment schedule, as specified.
e) "Energy efficiency specialist" as an individual or
business certified by the CEC to analyze, evaluate, or
install a project.
f) "Financial assistance" as loans, loan loss reserves,
interest rate reductions, secondary loan purchase,
insurance, guarantees or other credit enhancements or
liquidity facilities, contributions of money, property,
labor, or other items of value, or any combination thereof,
as determined by CEC, and other types of assistance
determined by the CEC.
g) "Third-party administrator" as an entity selected by the
CEC through a request for proposal to manage project
applications and make recommendations to the CEC as to the
individual project's compliance with this chapter.
h) "Warehouse financier" means a financial entity, bank, or
pension fund, chosen by the CEC through a request for
proposal to provide an ongoing and revolving source of
financing for applications approved.
i) "Nonresidential Building Energy Retrofit Bond" as a bond
issued pursuant to the Act that is secured by an energy
remittance repayment agreement lien on real property and is
entered into voluntarily to finance the project.
j) "Program administration cost fee" as a fee imposed for
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the costs incurred by CEC, California Alternative Energy and
Advanced Transportation Financing Authority (CAEATFA), and
the State Board of Equalization (BOE) to administer the Act.
aa) "Qualified applicant" as a person or business entity
that:
i) Owns an eligible real property that has a ratio of
loan balance to appraised value not to exceed 85 % and
subject to adjustment by the Program administrator at the
time the application is approved, unless the holder of the
deed of trust or mortgage recorded against the eligible
property "that has priority over all other deeds of trust
or mortgages recorded against the eligible property has
consented in writing to the recording of an agreement
pursuant to the Act against the eligible property.
ii) Timely submits a complete application to CEC, which
notes the existence of any first priority mortgage or deed
of trust on the eligible property and the identity of the
holder of the mortgage or deed of trust, and consents to
the special assessment; and,
iii) Meets standards of credit worthiness as established
by CEC.
bb) "Renewable energy" as heat, processed heat, space
heating, water heating, steam, space cooling, refrigeration,
mechanical energy, electricity, fuel cells, or energy in any
form convertible to these uses, including energy storage
technologies, and that uses biomass, solar thermal,
photovoltaic, wind, or geothermal technologies.
4)Requires CEC to establish, develop, finance and administer the
Program, as well as:
a) Within 6 months after the first two years of
implementation of the Program or after the expenditure of
the first $250,000,000 of proceeds authorized, whichever
occurs earlier, the CEC will make public a report of the
efficacy of the Program and recommendations that would
enhance the ability of the Program. The report will be
posted on its Internet Web site.
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5)Provides that in order to receive financial assistance, a
qualified applicant shall contractually agree to the recording
of an energy remittance repayment agreement lien on the
eligible real property that is being retrofitted or benefited.
6)Requires the CEC to develop by July 1, 2015 a request for
proposal to develop the program by a third part administrator.
Requires the third party administrator to administer the
program and establish an automated, asset-based underwriting
system for all eligible real properties in the state. In
addition, the third party administrator shall:
a) Provide consultation to the CEC in developing guidelines
for the Program,
b) Provide an independent energy advisor to assist owners of
real properties in evaluating projects,
c) Provide a loan servicer to service the loans,
d) Establish underwriting guidelines,
e) Disclose to an owner of an eligible real property all
fees imposed, including the loan loss reserve fee, the
Program administration cost fee, and the interest rate
charged, prior to the submission of an application by the
owner; and,
f) Make recommendation to the CEC regarding the approval or
disapproval of an application.
7)Specifies what information must be included in an application
from an owner of an eligible real property.
8)Allows no more than 20 years or the effective useful life of
the improvement for the repayment of the energy remittance
repayment agreement
9)Requires the loan servicer to collect the repayment
installments that become due and payable. Funds collected will
be remitted to the CEC. The loan servicer will notify the
board of delinquency.
10)Requires BOE to collect the repayment installments that are
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delinquent and funds collected shall be remitted to the
commission. In addition, the BOE:
a) Shall assess liquidated damage on the delinquent
repayment installment of 10% of the unpaid installment. If
delinquent 60 days, the BOE will issue a demand letter and
allowing an additional 30 days before the BOE commences
further action;
b) Allows the BOE to perform the collection of delinquent
repayment installments and the foreclosure duties as a
ministerial function on behalf of the CEC; and,
c) Allow the BOE to prescribe, adopt and enforce guidelines
relating to the collection of the delinquent repayment
installments.
11)Upon the full repayment of the balance of the agreement,
including any interest and penalties, the BOE shall notify the
CEC and record a release of the agreement with the county.
12)Prior to approving an application or a modification of an
approved application, requires CEC to conduct a public hearing,
as specified. Specifies that the CEC approve an application by
adopting a resolution and recording the agreement on the deed
of the building, as specified.
13)Requires CEC to consider the creditworthiness of the applicant
and the effectiveness of the improvements using the following
criteria:
a) Whether the applicants are legal owners of the underlying
building;
b) Whether the applicants are current on any outstanding
mortgage and property tax payments;
c) Whether the applicants are in default or in bankruptcy
proceedings;
d) Whether the applicants have applied for incentives
available through the energy efficiency programs offered by
an electrical or gas corporation; and,
e) Whether improvements financed by the program follow
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applicable standards, including any guidelines adopted by
CEC.
14)Specifies that the agreement lien that is secured by a lien
recorded, shall have a prominent header on the document that
reads "Energy Remittance Repayment Agreement Lien" in 14-point
type and contains all of the following information related to
the affected real property:
a) The assessor's parcel number;
b) The owners of record;
c) The legal description;
d) The street address; and,
e) The amount of the lien.
15)Specifies that, the agreement lien shall have the force,
effect, and priority of a judgment lien from the time of
recording in the county where the real property is located.
16)Sixty days after the notice of recording of the agreement,
requires CEC to include the application in a portfolio posted
on its website.
17)Authorizes the Authority CAEATFA to issue $2 billion in bonds
for this program.
18)Beginning June 30, 2016, and every fifth year thereafter,
requires the California State Auditor to conduct a performance
audit of the Program and to report the results and
recommendations to the President pro Tempore and the Speaker.
19)Authorizes CAEATFA, on behalf of CEC, to "incur indebtedness
and issue and renew negotiable bonds, notes, debentures, or
other securities of any kind or class" (bonds). Specifies that
all indebtedness shall be payable solely from moneys received
pursuant to the Act. Limits total indebtedness to $2 billion
unless the Legislature authorizes additional bonds.
20)Requires CAEATFA to conduct a semiannual meeting to authorize
the issuance of bonds and establishes related requirements.
Specifies that every issue of bonds shall be general
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obligations of CAEATFA or CEC payable from revenues or moneys
received pursuant to the Act. Establishes various requirements
and limitations relating to the management of the bonds.
21)Specifies that bonds issued pursuant to the Act shall not be
deemed to constitute a debt or liability of the state or of any
political subdivision thereof, other than CAEATFA, or a pledge
of the faith and credit of the state or of any such political
subdivision. States that all bonds be payable solely from
funds obtained pursuant to the Act.
22)Authorizes CAEATFA to provide for the issuance of bonds for
the purpose of refunding any bonds, notes, or other securities
of (CAEATFA) then outstanding, including the payment of any
redemption premium thereon and any interest accrued or to
accrue to the earliest or subsequent date of redemption,
purchase, or maturity of such bonds. Specifies that any such
bonds may be applied to refund other bonds may be used at
maturity or placed in escrow.
23)Pending this use, specifies that any such escrowed proceeds
may be invested and reinvested by CAEATFA in obligations of, or
guaranteed by, the federal government, or in certificates of
deposit or time deposits secured by obligations of, or
guaranteed by, the federal government, maturing at such time to
ensure the prompt payment of the outstanding bonds.
24)Specifies that bonds issued by CAEATFA are legal investments
for all trust funds, the funds of all insurance companies,
commercial and savings banks, trust companies, savings and loan
associations, and investment companies, for executors,
administrators, trustees, and other fiduciaries, for state
school funds, and for any funds that may be invested in county,
municipal, or school district bonds, as specified.
25)Exempts bonds issued under the Act from all taxation and
assessments imposed under state law.
26)By February 1, 2015, requires CEC to apply to the US
Department of Treasury under the Energy Tax Incentives Act of
2005 for CAEATFA to issue tax advantage bonds under the federal
Clean Renewable Energy Bonds program or any other applicable
program.
27)Establishes the Loan Loss Reserve Account in the Non
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Residential Real Property Energy Retrofit Debt Servicing Fund
(the Fund) in the State Treasury, into which the CEC is
required to deposit a portion of the repayment installation
that is the loan loss reserve fee into the account.
Continuously appropriates the Account to CAEATFA to pay
outstanding balances due under an agreement on the building
that has been foreclosed if the proceeds from the foreclosure
are insufficient to pay any past due payments.
28)Establishes the Administration Account in the Fund, into which
CEC is required to deposit the administration fee and
liquidated damages collected. Continuously appropriates these
funds to CAEATFA, CEC, and the BOE for the costs of
implementing the Act.
29)Authorizes CEC, the BOE, and CAEATFA to promulgate regulations
to implement the Act.
30)Makes finding and declarations.
EXISTING LAW
1)Requires the CEC to establish criteria for adopting a statewide
home energy rating program for residential buildings, and
requires the CEC to adopt the program in consultation with
representatives of the Department of Real Estate, the
Department of Housing and Community Development, the PUC,
investor-owned and municipal utilities, cities and counties,
real estate licensees, home builders, mortgage lenders, home
appraisers and inspectors, home energy rating organizations,
contractors who provide home energy services, consumer groups,
and environmental groups. [Public Resources Code 25943]
2)Establishes several natural gas public purpose programs,
including a low-income rate assistance program, a research and
development program, and energy efficiency programs, which are
funded by a surcharge on natural gas bills of customers of
pipelines regulated by the PUC. [Public Utilities Code 739]
3)Establishes subsidy programs for the installation of solar
photovoltaic systems administered by the PUC and CEC. These
programs, known collectively as the California Solar Initiative
(CSI), are to provide $3.2 billion in subsidies over 10 years
in the form of rebates for the installation of photovoltaic
projects. CSI authorizes the PUC to award $101 million in
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subsidies for solar thermal and solar water heating devices.
[Public Utilities Code 2851]
4)Establishes the Solar Hot Water and Efficiency Act of 2007 to
fund the installation of 200,000 solar hot water systems in
California by 2017. [Public Utilities Code 2860]
5)Establishes the SGIP within the PUC to incentivize clean,
renewable distributed generation resources. [Public Utilities
Code 379.6]
6)Requires the CEC to adopt an integrated energy policy report
(IEPR) every two years to evaluate market trends and develop
energy policies that will "conserve resources, protect the
environment, ensure energy reliability, enhance the state's
economy, and protect public health and safety." [Public
Resources Code 25300]
7)Requires the PUC to have each electrical corporation identify a
separate rate component to collect revenue to fund
cost-effective energy efficiency and conservation activities.
[Public Utilities Code 381]
8)Requires all electric utilities, in procuring energy, to first
acquire all available energy efficiency and demand reduction
resources that are cost effective, reliable, and feasible.
[Public Utilities Code 454.5(b)(9)(C)]
9)Under the California Constitution and the General Obligation
Bond Law, authorizes the Legislature to issue general
obligation bonds for specified purposes with a two-thirds vote
of both the Senate and the Assembly. These bonds only become
enacted if they are approved by a majority vote of the state's
electorate. State law authorizes specified state agencies to
issue revenue bonds and other credit instruments without voter
approval. [Government Code 16720]
10)Authorizes the CAEATFA to provide financing for facilities
that use alternative energy sources and technologies. CAEATFA
can issue revenue bonds (without voter approval), make loans,
loan loss reserves, and loan guarantees to develop and
commercialize advanced transportation technologies that
conserve energy, reduce air pollution, and promote economic
development and jobs. State law limits CAEATFA's total debt to
$1 billion. [Public Resources Code 26011]
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FISCAL EFFECT : Unknown.
COMMENTS :
AB 2045 creates a statewide financing program to support
nonresidential (commercial) real property owners who wish to
retrofit their properties with energy efficiency or renewable
energy technology. Administered by the CEC, the measure
establishes standards for financing energy retrofits. It is the
hope that the CEC could pool the individual building financing
into a large enough pool in order to obtain lower interest rates.
The warehouse financier, defined in the measure as a financial
entity, bank, or pension fund, chosen by the CEC through a
request for proposal to provide an ongoing and revolving source
of financing for applications approved, would be paid by the
state revenue bonds. The loan payments to repay the revenue
bonds would be collected by the loan servicer. If the individual
financing goes into default, then the BOE would be able to
exercise its authority to collect this debt to the state.
Essentially, the goal of AB 2045 is to allow the CEC to bring
commercial property owners together to gain the benefits of
lower-cost financing.
The energy retrofit process starts with the commercial building
owner presenting an energy improvement plan to a third-party
administrator defined as an entity selected by the CEC through a
request for proposal to manage project applications and make
recommendations to the CEC as to the individual project's
compliance. Once the application is submitted and approved, the
third-party administrator: reviews plans for compliance with
state efficiency guidelines by CEC; arranges financing through a
warehouse line of credit, including a lien on the property;
aggregates individual loans into a package that lowers risk and
finance costs; and, then the State Treasurer issues revenue bonds
for the package and pays off the warehouse loans, allowing money
to be continuously borrowed.
NEED FOR THE BILL:
According to the author, AB 2045 is needed to accomplish three
important actions that are necessary to significantly scale up
energy retrofits on commercial buildings:
1)Creates statewide standards for energy retrofits.
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2)Allows energy financing to combine to a size that attracts
lower interest rates.
3)Gives the finance community assurances that the state will back
up the collection.
Retrofitting commercial buildings has the potential to lower
energy costs and increase the property value for nonresidential
owners while reducing the carbon footprint.
BACKGROUND
According to a Legislative Analyst's Office (LAO) report released
December 19, 2012, titled, "Energy Efficiency and Alternative
Energy Programs," California currently maintains over a dozen
major programs that are intended to support the development of
energy efficiency and alternative energy in the state. Over the
past 10 to 15 years, the state has spent a combined total of
roughly $15 billion on such efforts, the vast majority of which
has been funded by utility ratepayers. The LAO recommended that
the Legislature develop a comprehensive strategy for meeting the
state's energy efficiency and alternative energy objectives.
Given that the state has numerous programs administered by
multiple departments, the LAO recommended that the Legislature
designate a lead agency to develop such a comprehensive strategy
such as CEC. Accordingly, the LAO recommended that the
Legislature adopt legislation requiring CEC to develop, in
coordination with other relevant departments (such as PUC and the
Air Resources Board (ARB)) - a comprehensive strategy to be
submitted for legislative consideration by January 2014 with the
Governor's proposed budget.
AB 2045 AS IT RELATES TO THE BANKING AND FINANCE COMMITTEE:
AB 2045 establishes that the energy remittance repayment
agreement lien shall have a prominent header on the document that
reads "Energy Remittance Repayment Agreement Lien" in 14-point
type and contains all of the following information related to the
affected real property: the assessor's parcel number; the owners
of record, the legal description, the street address; and, the
amount of the lien.
In addition the measure clearly states, "The energy remittance
agreement lien shall have the force, effect, and priority of a
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judgment lien from the time of recording in the county where the
real property is located." If a commercial property has any
mortgage liens, these liens will come before the energy
remittance repayment agreement and take priority. This is very
unique because it seems most energy efficiency financing programs
such as the Property Assessed Clean Energy (PACE); the lien takes
priority over any mortgage lien.
AB 2045 also provides that the lien will stay with the property
so if the commercial property forecloses, the new owner will be
responsible for all past due payments, unless somehow all
payments are taken care of through foreclosure proceedings.
As far as the bond process, under AB 2045, CAEATFA would issue
bonds for the program proposed under the bill. The administration
of the program (evaluating and approval of the applicants into
the loan program and other front-end work) would reside with CEC.
CAEATFA's role would be in the back-end through issuance of a
bond to replenish the moneys for the program. CAEATFA's board
consists of the Treasurer, Controller, Director of Finance, Chair
of the CEC and President of the PUC, which determines which
projects to receive funding.
PACE Programs:
PACE is an important program to note because it has similarities
to AB 2045. It is a program to finance energy efficiency and
renewable energy upgrades to buildings. Interested property
owners evaluate measures that achieve energy savings and receive
100% financing, repaid as a property tax assessment for up to 20
years. The assessment mechanism has been used nationwide for
decades to access low-cost long-term capital to finance
improvements to private property that meet a public purpose.
PACE is voluntary. Property owners, acting in their own
self-interest, implement building upgrades that can save them
money, increase the value of their property. PACE was
introduced as a pilot program in 2008. Today, 28 states and the
District of Columbia adopted legislation that enables local
governments to offer PACE benefits to building owners. PACE is
available for residential and commercial buildings. California
enacted the PACE model in statute through AB 811 in 2008.
Unfortunately, in 2010, the Federal Housing Finance Agency (FHFA)
brought forward concerns with PACE. Federally controlled Fannie
Mae and Freddie Mac told lenders that they would refuse loans
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associated with PACE. Regulators also asked state and local
governments to put the programs on hold, claiming that first
liens for PACE loans were a departure from traditional mortgage
lending standards and present "unusual and difficult risk
management challenges" for lenders, servicers and mortgage
securities investors. The FHFA ruling has effectively ended
residential PACE financing, with many local governments
suspending their programs as a result. Commercial PACE programs
were not affected by the FHFA decision and have been moving
forward in various places.
A federal district court in California while not ordering the
FHFA to reverse its current position on underwriting mortgages
for properties with a PACE assessment, directed the agency to
proceed with a notice and comment period for rulemaking. In
March, 2013, the U.S. Court of Appeals for the Ninth Circuit
overturned a District Court ruling and dismissed a case against
the FHFA, which was undergoing a court-ordered rulemaking
procedure on Enterprise Underwriting Standards for PACE programs.
The appeals court held that FHFA acted within its role as
"conservator" of Fannie Mae and Freddie Mac (as opposed to a role
of "regulator") when it issued a decision in 2011 to cease
purchasing mortgages on PACE properties. The appeals court
therefore concluded that it had no jurisdiction in the matter, as
the Housing and Economic Recovery Act of 2008 that created FHFA
stated that any action the Agency took in its role as a
"conservator" could not be challenged in court. This argument was
the basis of FHFA's motion to dismiss the lawsuit, however the
lower court found that FHFA acted as a "regulator" in issuing its
decision and needed to undergo a rulemaking process. Despite an
effective ban on residential PACE programs, states continue to
enact laws enabling commercial PACE programs, and many
communities across the country have implemented such programs.
BOE ROLE:
As drafted, this measure provides a great deal of responsibility
to the BOE. AB 2045 requires the BOE to collect delinquent
repayment installments while a loan servicer chosen by the third
party administrator will collect current payments. The bill also
allows the BOE to prescribe, adopt, and enforce guidelines
relating to the collection of the energy remittance repayment
installments. AB 2045, causes more confusion by having one
entity collect payments but then once a payment is delinquent, in
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then diverts to BOE who would then be responsible to collect past
due payments and potentially foreclose. BOE currently is
responsible for administering tax programs such as sales and use
taxes, property taxes, special taxes and the tax appellate
programs. The BOE is a revenue generating department for the
State of California. Overall, the mission of the BOE is to serve
the public through fair, effective, and efficient tax
administration. While the BOE is fully capable of collecting
taxes, what AB 2045 provides is not a tax; it is an energy
remittance repayment agreement which as defined is a contractual
agreement between an eligible building owner and CEC, secured by
a lien that establishes the repayment schedule. AB 2045 also
allows the BOE to contract out to a foreclosure service provider
if needed. This raises a number of concerns: What is a
foreclosure service provider and should a state agency really be
contracting out to an entity described as such?
According to a previous BOE analysis on SB 1130 (discussed
below), "the BOE does not presently perform any collection duty
associated with installment payment collections from private
property owners nor does it service loans. The mission of the
BOE is to serve the public through fair, effective, and efficient
tax administration. The provisions in this bill represent a
departure from our traditional "tax collection" functions."
THE COMMISSION
The CEC was established by the Legislature in 1974 to address the
energy challenges facing the state. Created by the
Warren-Alquist State Energy Resources Conservation and
Development Act signed into law by then-Governor Ronald Reagan,
the CEC is the state's principal energy policy and planning
organization. Since 1974, successive administrations with
bipartisan legislative support have enacted more than 100
separate laws to assist the Commission in implementing state
energy policy.
The Commission has five major areas of responsibility carried out
by five divisions & and administrative arm. The divisions are:
Administrative and Financial Services Division
Electricity Supply Analysis Division
Efficiency Division
Renewable Energy Division
Siting, Transmission and Environmental Protection Division
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Energy Research and Development Division
Fuels and Transportation Division
Through the efficiency division within CEC, a number of energy
efficiency financing programs exist. Through these programs, the
CEC has established loan agreements and guidelines in regards to
interest rates, payments collected and what occurs if there is a
default.
PROPOSITION 39:
On November 6, 2012, California voters passed Proposition 39, The
California Clean Energy Jobs Act that establishes the Clean
Energy Job Creation Fund and requires moneys in the fund to be
available for appropriation during specified fiscal years for,
among other things, the purposes of funding energy efficiency
projects in school facilities.
It requires most multistate businesses to determine their
California taxable income using a single sales factor method, a
change that increases state corporate tax revenue.
For a five-year period (2013-14 through 2017-18), Proposition 39
requires that half of the annual revenue raised from the measure,
up to $550 million, be transferred to a new Clean Energy Job
Creation Fund to support projects intended to improve energy
efficiency and expand the use of alternative energy. Proposition
39 specifically requires that the funds maximize energy and job
benefits by supporting:
a)Energy efficiency retrofits and alternative energy projects in
public schools, colleges, universities, and other public
facilities;
b)Financial and technical assistance for energy retrofits; and
c)Job training and workforce development programs related to
energy efficiency and alternative energy.
Proposition 39 also requires that funded programs be coordinated
with the CEC and PUC in order to avoid duplication and leverage
existing energy efficiency and alternative energy efforts. In
addition, Proposition 39 states the funding is to be appropriated
only to agencies with established expertise in managing energy
projects and programs.
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On December 19, 2013, the CEC adopted the Proposition 39
guidelines in accordance with Proposition 3 (2012) and Senate
Bill 73 (Committee on Budget and Fiscal Review, Chapter 29,
Statues of 2013), as amended by Senate Bill 97 (Committee on
Budget and Fiscal Review, Chapter 357, Statutes of 2013). These
guidelines define how the State of California intends to
implement the California Clean Energy Jobs Act Program.
PREVIOUS LEGISLATION :
AB 122 (Rendon, 2013 Legislative Year) Would have established the
Nonresidential Building Energy Retrofit Financing Act of 2013 and
required the California Energy Commission (CEC) to establish the
Nonresidential Building Energy Retrofit Financing Program
(Program) by July 1, 2014 to provide financial assistance through
revenue bonds for owners of eligible buildings to implement
energy efficiency improvements and renewable energy generation.
Died in the Assembly Appropriations Committee.
AB 39 (Skinner, 2013 Legislative Year) requires the CEC to
administer grants, loans, or other financial assistance to K-12
public schools and community colleges to reduce energy demand and
requires moneys in the fund to be available for appropriation
during specified fiscal years. The bill uses funds from
Proposition 39. Gut and amended, on Senate Inactive.
SB 39 (De Leon & Steinberg, 2013 Legislative Year) establishes
the Clean Energy Job Creation Fund and requires moneys in the
fund to be available for appropriation during specified fiscal
years for, among other things, the purposes of funding energy
efficiency projects in school facilities. The bill uses funds
from Proposition 39. Gut and amended, Chapter 775.
SB 1130 (De Leon, 2012 Legislative Year) Would have established
the Nonresidential Building Energy Retrofit Financing Act of
2012 and required the California Energy Commission to establish
the Nonresidential Building Energy Retrofit Financing Program by
July 1, 2013 to provide financial assistance through revenue
bonds for owners of eligible buildings to implement energy
efficiency improvements and renewable energy generation. Died in
the Assembly Appropriations Committee.
AB 811 (Levine & Beall, Chapter 159, Statutes of 2008) This bill
authorizes all cities and counties in California to designate
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areas within which city officials and willing property owners may
enter into contractual assessments to finance the installation of
distributed generation renewable energy sources and energy
efficiency improvements.
RECOMMENDED AMENDMENTS
The amendments recommended delete the BOE in its entirety from
the bill. The amendments also delete the loan servicer entity.
The board is one more entity involved in the bill which is not
necessary. The commission is the dominant force throughout the
measure and has the capability to collect payments and create
agreements as seen through existing programs they oversee. In
addition, the commission is able to promulgate rules and
regulations as necessary stated in the bill; therefore, if the
commission decides to contract out loan servicing, nothing in
this measure prohibits it.
1)On page 4, delete line 28
2)On page 7, line 10 and 11, insert, "and" after commission, and
delete, " and the State Board of Equalization"
3)On page 9, line 11, delete, " and board"
4)On page 10, line 23 and 24, delete, "The third party
administrator shall provide a loan servicer to service the
loans."
5)On page 13, line 4, delete, "that may include the requirement
that the owner of eligible building obtain insurance issued by
an A.M. Best "A" or better rated insurance carrier or a similar
product as approved by the commission"
6)On page 13, line 33, delete, "loan servicer" and insert
"commission"
7)On page 13, line 34 and 35, delete. "Funds collected shall be
remitted to the commission."
8)On page 13, line 34, add after payable, "and repayment
installments that are delinquent."
9)On page 13, on line 37 and 38, delete, "The loan servicer shall
notify the board of the delinquency."
AB 2045
Page 18
10)On page 13, delete lines 39-40
11)On page 14, delete lines 1-39
12)On page 15, line 1 delete, "board" and insert "commission"
13)On page 16, line 32, delete, "affected" and insert "eligible"
14)On page 16, line 40, insert "eligible" after the
15)On page 24, line 11 delete, " and the board" and insert "and"
after commission
16)On page 24, line 13, delete "three" and insert "two"
17)On page 24, line 16 and 17, delete, "loan servicer" and insert
"commission"
18)On page 24, line 19, delete "board" and insert "commission"
19)On page 28, line 12, insert "and" after authority
20)On page 28, line 13, delete, "and the board"
21)On page 28, line 17, delete "the board"
22)On page 28, line 21, delete, "board"
23)On page 28, line 24, delete, "board"
24)On page 28, line 27, delete "board"
REGISTERED SUPPORT / OPPOSITION :
Support
California Municipal Utilities Association
California Solar Energy Industry Association (CalSEIA)
East Bay Municipal Utility District
Environment California
U.S. Green Building Council California
Opposition
AB 2045
Page 19
None on file.
Analysis Prepared by : Kathleen O'Malley / B. & F. / (916)
319-3081