Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2597

Introduced by Assembly Member Ting

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(Principal coauthor: Senator Pavley)

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February 21, 2014

An act to begin delete add and repeal Section 25230 end delete begin insert amend Sections 26052, 26055, 26060, 26061, 26062, and 26063 end insert of the Public Resources Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2597, as amended, Ting. Energy: begin delete electric vehicles: grid impact. end delete begin insert PACE program. end insert

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Existing law authorizes a public agency and a property owner to enter into voluntary contractual assessments to finance the installation of distributed generation renewable energy sources or energy or water efficiency improvements that are permanently affixed on real property (PACE financing program).

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Existing law requires the California Alternative Energy and Advanced Transportation Financing Authority to establish a Property Assessed Clean Energy (PACE) Reserve program to assist local jurisdictions in financing, among other things, the installation of distributed generation renewable energy sources or energy or water efficiency improvements on residential projects. Existing law requires the authority, in considering the eligibility of a public agency’s PACE financing program for assistance under the PACE Reserve program, to consider whether the PACE program provides a loan that is less than 10% of the value of the property.

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This bill would authorize the PACE program to provide an assessment that is less than 15% of the value of the property.

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Existing law establishes the State Energy Resources Conservation and Development Commission and requires the commission to conduct assessments and forecasts of all aspects of energy industry supply, production, transportation, delivery, and distribution.

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This bill would require the commission, on or before December 1, 2015, to submit a report to the Legislature on the feasibility, potential benefits, and electrical grid impacts of using electric vehicles as an energy storage device for meeting load demands placed on the electrical grid. The bill would repeal this provision on January 1, 2020.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

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begin insert SECTION 1. end insert   

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begin insert Section 26052 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

26052.  

“Applicant” means, for the purposes of Article 2
(commencing with Section 26060), a public agency as defined in
paragraph (3) of subdivision (c) of Section 5898.20 of the Streets
and Highways Code, or an entity administering a PACE begin delete loan end delete
begin insert assessment end insert program on behalf of and with written consent of a
public agency, and, for the purposes of Article 3 (commencing
with Section 26070), a financial institution providing a loan
pursuant to that chapter to finance the installation of distributed
generation renewable energy sources, electric vehicle charging
infrastructure, or energy or water efficiency improvements.

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begin insert SEC. 2. end insert   

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begin insert Section 26055 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

26055.  

“PACE program” means a program established by an
applicant that is financed by the PACE bond or a PACE begin delete loan end delete
begin insert assessment end insert program regardless of funding sources.

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begin insert SEC. 3. end insert   

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begin insert Section 26060 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

26060.  

(a) The authority shall develop and administer a PACE
Reserve program to reduce overall costs to the property owners
of PACE bonds issued by an applicant by providing a reserve of
no more than 10 percent of the initial principal amount of the PACE
bond.

(b) The authority shall develop and administer a PACE risk
mitigation program for PACE begin delete loans end delete begin insert assessments end insert to increase their
acceptance in the marketplace and protect against the risk of default
and foreclosure.

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begin insert SEC. 4. end insert   

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begin insert Section 26061 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

26061.  

To qualify for assistance pursuant to this chapter, the
PACE program shall require all of the following:

(a) The interest rate on the PACE bond does not exceed a
percentage as determined by the authority to be appropriate.

(b) Minimum legal begin delete loan end delete begin insert assessment end insert structure and credit
underwriting criteria as determined by the authority are met.

(c) Proceeds of the PACE bonds are used to finance qualified
energy and water efficiency, electric vehicle charging
infrastructure, and clean energy improvements.

(d) The improvement financed is for a residential project of
three units or fewer, or a commercial project that costs less than
twenty-five thousand dollars ($25,000) in total.

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begin insert SEC. 5. end insert   

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begin insert Section 26062 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

26062.  

An applicant shall submit to the authority an application
providing a detailed description of the PACE program, a detailed
description of the transactional activities associated with the PACE
bond issuance, including all transactional costs, information
regarding any credit enhancement or begin delete loan end delete insurance associated
with begin delete a end delete begin insert the end insert PACE begin delete loan end delete begin insert assessment end insert program, and other information
deemed necessary by the authority.

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begin insert SEC. 6. end insert   

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begin insert Section 26063 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

26063.  

(a) In evaluating eligibility, the authority shall consider
whether the applicant’s PACE program includes the following
conditions:

(1)  begin delete Loan end delete begin insert Assessment end insert recipients are legal owners of underlying
property.

(2)  begin delete Loan end delete begin insert Assessment end insert recipients are current on mortgage and
property tax payments.

(3)  begin delete Loan end delete begin insert Assessment end insert begin insert end insert recipients are not in default or in
bankruptcy proceedings.

(4)  begin delete Loans are end delete begin insert Assessment is end insert for less than begin delete 10 end delete begin insert 15 end insert percent of the
value of the property.

(5) The property is within the geographical boundaries of the
PACE program.

(6) The program offers financing for energy efficiency
improvements or electric vehicle charging infrastructure.

(7) Improvements financed by the program follow applicable
standards of energy efficiency retrofit work, including any
guidelines adopted by the State Energy Resources Conservation
and Development Commission.

(b) In evaluating an application, the authority shall consider all
of the following factors:

(1) The use by the PACE program of best practices, adopted by
the authority, to qualify eligible properties for participation in
underwriting the PACE program.

(2) The cost efficiency of the applicant’s PACE program,
including bond issuance, credit enhancement, or begin delete loan end delete insurance.

(3) The projected number of jobs created by the PACE program.

(4) The applicant’s PACE program requirements for quality
assurance and consumer protection as related to achieving
efficiency and clean energy production.

(5) The mechanisms by which savings produced by this program
are passed on to the property owners.

(6) Any other factors deemed appropriate by the authority.

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SECTION 1.  

Section 25230 is added to the Public Resources
Code, to read:

25230.  

(a) On or before December 1, 2015, the commission
shall, pursuant to Section 9795 of the Government Code, submit
to the Legislature a report on the feasibility, potential benefits, and
electrical grid impacts of using electric vehicles as an energy
storage device for meeting load demands placed on the electrical
grid.

(b) Pursuant to Section 10231.5 of the Government Code, this
section is inoperative on December 1, 2019, and is repealed on
January 1, 2020.

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