Amended in Senate April 10, 2014

Senate Bill No. 1121

Introduced by Senator De León

February 19, 2014

begin delete An act relating to the California Green Bank. end delete begin insert An act to add and repeal Part 11.5 (commencing with Section 15880) to Division 3 of Title 2 of the Government Code, and to amend Section 39712 of the Health and Safety Code, relating to state government, and making an appropriation therefor. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 1121, as amended, De León. The California Green Bank.

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(1) The Bergeson-Peace Infrastructure and Economic Development Bank Act authorizes the California Infrastructure and Economic Development Bank, governed by a board of directors, to make loans, issue bonds, and provide other assistance for various types of economic development projects, among other things. The activities of the bank under these provisions are funded from the California Infrastructure and Economic Development Bank Fund, which is continuously appropriated for these purposes.

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This bill would establish until January 1, 2036, the California Green Bank to, among other things, serve as a provider of bond guarantees, loans, loan guarantees, the warehousing of loans, securitization, insurance, portfolio insurance, credit enhancements, and other forms of financing support and risk management for clean energy projects and innovative energy technology projects, as those terms are defined. The bank would be governed by a board of directors composed of 11 members appointed by the Governor, the Legislature, and various heads of executive branch entities, as specified, to serve terms of office to be determined by the board. The act would authorize the board to select a chief executive officer to manage and conduct the business of the bank, at the direction of the board, and to select an executive vice president and 2 divisional vice presidents and hire staff. The act would require these employees to be compensated at prevailing rates of compensation for similar positions in private industry. The act would authorize the bank to employ or contract with banks, credit agencies, and attorneys, at customary commercial rates to carry out the activities and mission of the bank, including, but not limited to, administrative and operative functions.

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The act would specifically authorize the bank to issue bonds that may have a maturity of not more than 50 years and are exempt from state taxation. The act would limit the repayment of bonds to the extent funds are available to the bank and would provide that repayment is not backed by the full faith and credit of the state. The act would require the bank to establish a program to provide loans, loan guarantees, securitization, insurance, portfolio insurance, and other forms of financing support, as the bank determines is appropriate for qualified clean energy projects. The act would require the bank to charge fees for bond guarantees, and would authorize the bank to facilitate financing in tax equity markets and take a nonvoting equity or membership interest in innovative energy technology projects or developers. The act also would authorize the bank to take certain actions if a sponsor or developer of an innovative energy technology projects defaults on its financing support.

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The act would establish the California Green Bank Fund, to receive local, state, federal, and private moneys, as a continuously appropriated fund for the purpose of implementing the act.

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The act annually requires the bank to submit a report to the Governor and the Legislature on its activities and to be independently audited.

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(2) The California Global Warming Solutions Act of 2006 requires the State Air Resources Board to adopt regulations to require the reporting and verification of emissions of greenhouse gases and, among other things, authorizes the state board to include use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation by the Legislature. Existing law authorizes the allocation of moneys appropriated from the Greenhouse Gas Reduction Fund for the purpose of reducing greenhouse gas emissions through, among other things, investments in programs implemented by local and regional agencies and collaboratives, and by nonprofit organizations coordinating with local governments.

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This bill would specify that these investments include the California Green Infrastructure Bank.

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(3) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

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This bill would make legislative findings to that effect.

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Existing law establishes various programs throughout the state to promote energy efficiency, reduce greenhouse gases, and encourage private economic development.

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This bill would state the intent of the Legislature to enact legislation that would establish the California Green Bank to coordinate, align, and enhance the state’s efforts to provide energy finance programs for advanced energy technologies and projects throughout the state.

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Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . 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 Part 11.5 (commencing with Section 15880) is
added to Division 3 of Title 2 of the end insert begin insert Government Code end insert begin insert , to read: end insert

begin insert

 

PART  begin insert 11.5. end insert   The California Green Bank Act

 

begin insert 15880. end insert   

The Legislature finds and declares the purposes of the
California Green Bank is to do all of the following:

(a) Evaluate and coordinate financing support and increase
private investment in otherwise commercially viable clean energy
projects, other than innovative energy technology projects, not
currently able to obtain financing in the capital markets at a
reasonable cost with a reasonable rate of return to a clean energy
project developer.

(b) Evaluate and coordinate financing support and increase
private investment in innovative energy technology projects not
currently able to obtain financing in the capital markets to achieve
commercialization, drawing upon the state’s unique combination
of experts in technology, clean-tech investment, and low-carbon
innovations to carefully evaluate and proactively support these
investments.

(c) Reduce rates and decrease costs for utility ratepayers within
the state, expand the accessibility and affordability of clean energy
for end users, ensure the reliability and safety of the state’s energy
supply, increase the use of clean energy, promote energy efficiency,
and advance the state’s energy and infrastructure-related economy,
including, but not limited to, credit enhancement tools that enable
low- and moderate-income homeowners to obtain financing for
clean energy projects.

(d) Foster increasingly efficient, low-cost private capital
financing for clean energy projects through the creation of
financial performance data, standardized contracts, underwriting
standards, and measurement and verification protocols for clean
energy projects.

(e) Serve as a provider of bond guarantees, loans, loan
guarantees, the warehousing of loans, securitization, insurance,
portfolio insurance, credit enhancements, and other forms of
financing support and risk management for clean energy projects.

(f) Achieve the level of financing support for clean energy
projects necessary to advance the state’s policy objectives,
including, but not limited to, the reduction of greenhouse gas
emissions within the state.

begin insert 15880.5. end insert   

The following definitions shall apply to this part,
unless the context requires otherwise:

(a) “Act” means the California Green Bank Act created under
this part.

(b) “Bank” means the California Green Bank.

(c) “Board” means the Board of Directors of the California
Green Bank.

(d) “Bonds” means bonds, including structured, senior, and
subordinated bonds or other securities, loans, notes, including
bond, revenue, tax, or grant anticipation notes, commercial paper,
floating rate and variable maturity securities, and any other
evidences of indebtedness or ownership, including, but not limited
to, certificates of participation or beneficial interest, asset backed
certificates, or lease-purchase or installment purchase agreements.

(e) “Clean agriculture project” means any project, technology,
product, service, function, or measure, or an aggregation of
projects, technologies, products, services, functions or measures,
whose primary purpose is the development or deployment,
including manufacturing, of a technology, product, or service that
avoids or reduces emissions of greenhouse gases directly or
indirectly caused by the production or processing of crops or
livestock.

(f) “Clean energy infrastructure project” means the
construction, alteration, or repair of any of type of infrastructure
necessary for the deployment of technologies, products, or services
that will avoid or reduce emissions of greenhouse gases including,
but not limited to, electric transmission and distribution facilities
interconnected to renewable energy projects or system efficiency
projects, hydrogen transportation and distribution systems,
including hydrogen vehicle fueling stations, or electric vehicle
charging stations, or improvements to infrastructure used for the
transportation of passengers, goods, or freight.

(g) “Clean energy project” means any project, technology,
product, service, function, or measure, or an aggregation of
projects, technologies, products, services, functions or measures
that avoids or reduces emissions of greenhouse gases, including,
but not limited to, energy efficiency projects, clean energy
infrastructure projects, innovative energy technology projects,
renewable energy projects; system efficiency projects, clean
agriculture projects, low-carbon transportation projects, and
demand response projects or an aggregation of any of these types
of projects.

(h) “Demand response project” means any project, technology,
product, service, function, or measure, or an aggregation of
projects, technologies, products, services, functions, or measures
that changes electric usage by end-use customers in the state from
their normal consumption patterns in response to any of the
following:

(1) Changes in the price of electricity over time.

(2) Incentive payments designed to induce lower electricity use
at times of high market prices.

(3) System reliability.

(i) “Energy efficiency project” means any project, technology,
product, service, function, or measure, or an aggregation of
projects, technologies, products, services, functions, or measures,
that results in the reduction of energy use required to achieve the
same level of service or output prior to the application of the
project, technology, product, service function, or measure, and
reduces emissions of greenhouse gas relative to emissions that
would have occurred prior to the application of the project,
technology, product, service, function, or measure, including, but
not limited to, projects, technologies, products, services, functions,
or measures that reduce the amount of greenhouse gas emissions
associated with water capture, conveyance, use, reuse, recycling,
or treatment.

(j) “Fund” means the California Green Bank Fund.

(k) “Innovative energy technology project” means any project
whose primary purpose is either of the following:

(1) Development or deployment, including manufacturing, of a
technology, infrastructure, practice, product, or service that avoids
or reduces emissions of greenhouse gases and that employs new
or significantly improved technologies or practices as compared
to technologies or practices that are in general use in the
commercial marketplace in the United States at the time the project
is approved by the bank.

(2) Manufacturing of a commercially ready energy technology
or product that avoids or reduces emissions of air pollutants or
greenhouse gases, and that incorporates an innovative
manufacturing process or processes not in general use in the
commercial marketplace in the United States at the time the project
is approved by the bank.

(l) “Low-carbon transportation project” means any project,
technology, product, service, function, or measure, or an
aggregation of projects, technologies, products, services, functions,
or measures, that result in reductions in greenhouse gas emissions
from the transportation of people, goods, or freight.

(m) “Renewable energy project” means the development,
construction, deployment, alteration, or repair of any solar, wind,
geothermal, appropriately sourced biomass, anaerobic digestion
of organic waste streams, small hydropower projects, ocean or
tidal, fuel cell using renewable fuels, or advanced biofuel or other
renewable fuel energy generation facility.

(n) “System efficiency project” means the development,
construction, deployment, alteration, or repair of any distributed
generation, energy storage, smart grid technologies, advanced
battery, microgrid, fuel cell using renewable fuels, or combined
heat and power systems.

begin insert 15880.10. end insert   

There is in state government the California Green
Bank. The bank shall have two separate divisions, as follows:

(a) The clean energy division, which shall oversee all clean
energy projects, other than innovative energy technology projects.

(b) The innovative energy technologies division, which shall
oversee innovative energy technology projects.

begin insert 15880.15. end insert   

The bank shall be an independent entity in state
government. Neither the bank nor any of its functions, powers, or
duties shall be transferred to or consolidated with any other
department or agency, of the state.

begin insert 15880.20. end insert   

The California Green Bank Fund is established
within the State Treasury for the purpose of implementing this act.
Moneys shall be deposited in the fund pursuant to Section
15880.65. Notwithstanding Section 13340, all moneys in the fund
are continuously appropriated without regard to fiscal year for
the support of the bank and shall be available for expenditure by
the bank for the purposes stated in the act.

begin insert 15880.25. end insert   

(a) The bank shall be governed by a board of
directors, composed of 11 members as follows:

(1) The Governor shall appoint three members.

(2) The Senate Committee on Rules shall appoint one member.

(3) The Speaker of the Assembly shall appoint one member.

(4) The Treasurer shall appoint one member.

(5) The Department of Finance shall appoint one member.

(6) The Public Utilities Commission shall appoint one member.

(7) The Energy Commission shall appoint one member.

(8) The State Air Resources Board shall appoint one member.

(9) The Department of Water Resources shall appoint one
member.

(b) The members of the board appointed by the Governor, the
Senate Committee on Rules, and the Speaker of the Assembly shall
have private sector financial experience.

(c) The initial terms of the members of the board shall be four
years. For terms beginning after the first term of four years, the
board shall, in its bylaws, create staggered terms of 2, 3, and 4
years for members of the board.

(d) Any member of the board whose term has expired may
continue to serve on the board until the earlier of either of the
following:

(1) The date on which that member’s successor is appointed.

(2) The end of the six-month period beginning on the date the
member’s term expired.

(e) Members of the board may be reappointed for additional
terms as members of the board.

(f) Any vacancy on the board shall be filled in the same manner
in which the original appointment was made.

(g) Any member of the board appointed to fill a vacancy
occurring before the expiration of the term for which the member’s
predecessor was appointed shall be appointed only for the
remainder of that term.

begin insert 15880.30. end insert   

Six of the members of the board shall constitute a
quorum. The affirmative vote of a majority of a quorum shall be
necessary for any action to be taken by the board.

begin insert 15880.35. end insert   

(a) The board shall adopt, and may amend, bylaws
as are necessary for the proper management and functioning of
the bank.

(b) The board shall adopt an official seal.

(c) The board may establish committees and subcommittees as
it deems necessary to carry out the activities and purposes of the
bank.

(d) At the request of any two members of the board, the
chairman shall place an item pertaining to the policies or
procedures of the bank on the agenda for discussion by the board.
Not later than 30 days after the date that a request is made, the
chairman shall hold a meeting of the board at which the item shall
be discussed.

(e) The board may sue or be sued in its own name or delegate
the authority to the chief executive officer.

begin insert 15880.40. end insert   

(a) (1) The board shall select a chief executive
officer. The chief executive officer shall manage and conduct the
business and affairs of the bank at the direction of the board.

(2) The chief executive officer shall have significant expertise
in management and administration of a financial institution, or
significant expertise in the financing and development of energy
or infrastructure projects.

(3) The chief executive officer shall not have any financial
interest in either of the following:

(A) A clean energy project being considered by the board, unless
that interest is placed in a blind trust.

(B) An investment institution, its affiliates, or any other entity
seeking or likely to seek financial assistance for any clean energy
project from the bank, unless the interest is placed into a blind
trust for the tenure of the service of the chief executive officer, plus
two additional years.

(b) The chief executive officer may appoint an executive vice
president who shall serve as chief executive officer during the
absence or disability of, or in the event of a vacancy in the office,
of chief executive officer. The executive vice president shall perform
functions as the chief executive officer prescribes.

(c) The chief executive officer may appoint one divisional vice
president for each of the bank’s two divisions who shall direct,
control, and oversee the function of his or her respective division
and perform functions as the chief executive officer prescribes.

(d) Except as the board may otherwise determine, the chief
executive officer may employ staff as he or she determines is
necessary to carry out the activities and purposes of the bank.

begin insert 15880.45. end insert   

(a) The bank may, consistent with Article VII of the
California Constitution, contract with banks, credit agencies, and
attorneys at customary commercial rates to provide services to
carry out the activities and mission of the bank, including, but not
limited to, administrative and operative functions.

(b) Notwithstanding any other law, the bank shall compensate
its employees at prevailing rates for compensation for similar
positions in private industry.

(c) The bank may purchase insurance for itself or for its
fiduciaries to cover liability or losses occurring by reason of the
act or omission of the bank or of a fiduciary, if the insurance
permits recourse by the insurer against the fiduciary in the case
of a breach of a fiduciary obligation by the fiduciary.

begin insert 15880.50. end insert   

(a) A director, officer, attorney, agent, or employee
of the bank shall not, in any manner directly or indirectly,
participate in the deliberation upon, or the determination of, any
question affecting the individual’s personal interests, or the
interests of any corporation, partnership, or association in which
the individual is directly or indirectly personally interested.

(b) The members of the board shall be subject to the Political
Reform Act of 1974 (Title 9 (commencing with Section 81000))
and all other applicable laws relating to the prohibitions and
limitations of financial interests of public officials and employees.

begin insert 15880.55. end insert   

(a) Members of the board shall not receive a salary,
but be paid a per diem in the amount of $____ for each day away
from home working on bank business.

(b) The chief executive officer shall be compensated at an
amount set by the board that is commensurate with a similar
private sector position.

(c) The executive vice president and divisional vice presidents
shall be compensated at an amount set by the chief executive officer
and shall be commensurate with similar private sector financial
positions.

begin insert 15880.60. end insert   

(a) The bank is authorized to issue bonds, the
proceeds from which shall be deposited into the fund.

(b) Bonds issued by the bank shall be in the forms and
denominations as determined by the bank, have a maturity of no
more than 50 years, and bear an interest rate set by the bank.

(c) The repayment of bonds issued by the bank shall be paid by
the bank, only to the extent funds are available to the bank and
shall not be backed by the full faith and credit of the state. Each
bond shall include on its face a notation to this effect.

(d) The aggregate face amount of the bonds issued under this
section shall be in an amount to be determined by the bank.

(e) The bank shall issue bonds through a competitive bidding
process that encourages aggressive bidding and in a manner that
ensure there are at least four different unaffiliated purchasers.

(f) Any and all bonds issued by the bank, their transfer and the
income therefrom, shall at all times be free from taxation of every
kind by the state and by all political subdivisions of the state.

begin insert 15880.65. end insert   

(a) The bank may receive for deposit into the fund
any local, state, or federal moneys to provide financing support
for clean energy projects pursuant to the act.

(b) The bank may receive for deposit into the fund charitable
gifts, grants, contributions, loans, and other financial conveyance
from private individuals, corporations, and philanthropic
foundations for providing financing support for clean energy
projects generally, or for the express purpose of financing a
specific clean energy project or category of clean energy projects.
Moneys in the fund other than from a gift, grant, contribution,
loan, or other financial conveyance made to support a clean energy
projects shall not be dedicated for financing support for any
specific project or category projects.

begin insert 15880.70 end insert   

The bank shall assess reasonable fees on its activities,
including loans, loan guarantees, insurance, portfolio insurance,
and other forms of financing support or risk management it
provides to cover its reasonable costs and expenses, as determined
by the board. The bank shall deposit fees it collects into the fund.

begin insert 15880.75. end insert   

The bank may own or take interest in property to
the extent necessary to carry out its activities.

begin insert 15880.80. end insert   

(a) The bank shall establish a program to provide,
on a competitive basis, loans, loan guarantees, securitization,
insurance, portfolio insurance, and other forms of financing
support or risk management, as the bank determines appropriate,
for any clean energy project that meets the qualifications set forth
in this act and the guidelines established by the bank.

(b) The board may determine lending guidelines, including, but
not limited to, the setting of maturity and interest rates for loans.

(c) An applicant may be any public or private entity, whether
organized for profit or nonprofit, that is engaged in business or
operations within the state.

(d) The bank shall establish guidelines and criteria for selecting
clean energy projects to receive financing support. Clean energy
projects shall comply with the criteria, priorities, and guidelines
adopted by the bank to the maximum extent feasible. Those criteria
shall include, but not be limited to, a consideration of the
following:

(1) Maximizing economic, environmental, and public health
benefits to the state.

(2) Fostering job creation by promoting the reduction of
greenhouse gas emissions by California workers and businesses.

(3) Complementing efforts to improve air quality.

(4) Directing investment toward the most disadvantaged
communities and households in the state.

(5) Providing opportunities for businesses, public agencies,
nonprofits, and other community institutions to participate in and
benefit from statewide efforts to reduce greenhouse gas emissions.

(6) Lessening the impacts and effects of climate change on the
state’s communities, economy, and environment.

(7) Funding to reduce greenhouse gas emissions through energy
efficiency, clean and renewable energy generation, distributed
renewable energy generation, energy transmission and storage,
and other related actions, including, but not limited to, energy
efficiency in public universities, state and local public buildings,
and industrial and manufacturing facilities.

(8) Funding to reduce greenhouse gas emissions through the
development of state-of-the-art systems to move goods and freight,
advanced technology vehicles and vehicle infrastructure, advanced
biofuels, and low-carbon and efficient public transportation.

(9) Funding to reduce greenhouse gas emissions associated
with water use and supply, land, and natural resource conservation
and management, forestry, and sustainable agriculture.

(10) Funding to reduce greenhouse gas emissions through
strategic planning and development of sustainable infrastructure
projects, including, but not limited to, transportation and housing.

(11) Funding to reduce greenhouse gas emissions through
increased diversion of municipal solid waste from disposal through
waste reduction, diversion, and reuse.

(12) Funding to reduce greenhouse gas emissions through
investments in programs implemented by local and regional
agencies, local and regional collaboratives, and nonprofit
organizations coordinating with local governments.

(13) Funding in research, development, and deployment of
innovative technologies, measures, and practices related to
programs and projects funded pursuant to this part.

(14) Creating robust private markets for low-carbon
technologies.

(e) The bank shall provide financing support, including, but not
limited to, loans, loan guarantees, securitization, insurance,
portfolio insurance, bond guarantees, and other forms of financing
support or risk management, to a clean energy project only if all
of the following criteria are met:

(1) The clean energy project is located within the state.

(2) Except in the case of an innovative energy technology
project, the clean energy project can support a commercial rate
of debt, adjusted downward to account for the bank’s lower costs.

(3) The requested financing support is secured as the chief
executive officer of the bank determines appropriate for the sector
and the project.

(4) The clean energy project satisfies all statutory requirements
or conditions related to the receipt of revenues from the
Greenhouse Gas Reduction Fund, consistent with paragraph (6)
of subdivision (c) of Section 39712 of the Health and Safety Code.

(5) The clean energy project is consistent with any criteria,
priorities, and guidelines established by the bank.

(6) The board determines one or more of the following:

(A) The bank’s participation in the financing support for a clean
energy project would enable otherwise creditworthy or
commercially viable entities to deploy that clean energy projects
at a reasonable cost with a reasonable rate of return to the clean
energy project developer of and on its invested capital.

(B) The financing support will facilitate deployment of a clean
energy project at an accelerated rate.

(C) The financing support will stimulate, aid, or otherwise
support manufacturing of finished products or component parts
used in an innovative energy technology project located within
the state.

(D) The financing support is necessary to create liquid markets
for energy securities.

(E) The financing support otherwise addresses barriers that
have prevented adequate commercial financing of clean energy
projects.

(f) In addition to any other methods the bank may use to identify
clean energy projects that satisfy the requirements for financing
support, the bank shall utilize existing clean energy development
networks to identify clean energy projects that satisfy the
requirements for financing support, including the creation of
advisory committees comprised of public and private stakeholders
to the extent deemed appropriate by the board. The bank will also
endeavor to coordinate with existing state clean energy research,
development, and deployment programs.

(g) Any recipient of funds under this part that utilizes the funds
for construction purposes shall certify that the contractors are
properly licensed under all applicable state laws.

(h) The bank shall charge any fees for bond guarantees as the
board determines appropriate.

(i) The bank may facilitate financing transactions in tax equity
markets and long-term purchasing of clean energy by governmental
and nongovernmental nonprofit entities, to the degree and extent
that the board determines the financing activity is appropriate and
consistent with carrying out the terms of this part.

(j) The clean energy division shall only conduct financing
activities for those clean energy projects that meet the criteria and
guidelines established by the board for clean energy projects.

(k) A sponsor or developer of, or a financing party for, a clean
energy project that seeks financing support under this part shall
submit an application to the board in a form and manner required
by the board.

begin insert 15880.85. end insert   

(a) The bank shall allocate between 15 and 30
percent of its capital to provide financing support for innovative
energy technology projects.

(b) The bank may provide convertible debt or warrants to
support innovative energy technology projects, and as a result,
may take a nonvoting equity or membership interest in innovative
energy technology projects or developers thereof.

(c) If the sponsor or developer defaults on its obligations that
are a condition of the financing support it receives with regard to
an innovative energy technology project, the bank may,
notwithstanding any other law, do either of the following:

(1) Complete, maintain, operate, lease, or otherwise dispose of
any property acquired pursuant to a guarantee or related
agreements, including, but not limited to, all intellectual property
and technology necessary for any person designated by the bank
to complete and operate the innovative energy technology project.

(2) Permit the sponsor or developer, pursuant to an agreement
with the bank, to continue to pursue the purposes of the innovative
energy technology project, if the bank determines this to be in the
public interest.

begin insert 15880.90. end insert   

The board may fix and collect insurance premiums
or loan loss reserve contributions from applicants that are
adequate to cover the financial risks associated with the bank’s
financing support programs.

begin insert 15880.95. end insert   

(a) The chief executive officer shall do all of the
following:

(1) Require any entity receiving financing support pursuant to
this part to report quarterly, in a format specified by the chief
executive officer, on the entity’s use of the support and its progress
fulfilling the objectives for which that support was granted, and
the chief executive officer shall make these reports available to
the public.

(2) Pursue a diversified portfolio of clean energy projects for
which the bank provides financing support.

(3) Establish appropriate mechanisms to ensure appropriate
use and compliance with all terms of any financing support made
available pursuant to this part.

(4) Create and maintain a fully searchable database accessible
on the bank’s Internet Web site at no cost to the public that
contains all of the following:

(A) A list of each entity that has applied for a loan, loan
guarantee, insurance, portfolio insurance, or other forms of
financing support or risk management under this section.

(B) A description of each application.

(C) The status of each application.

(D) The name of each entity receiving funds made available
pursuant to this section.

(E) The purpose for which that entity is receiving those funds.

(F) The quarterly report submitted by the entity pursuant to this
part.

(G) Any other information sufficient to allow the public to
understand and monitor loans, loan guarantees, insurance,
portfolio insurance, and other forms of financing support or risk
management provided under this part.

(5) Assist in and ensure the development of underwriting
standards for the financing of clean energy projects consistent
with good industry practices for public and private financial
institutions.

(6) Establish a risk committee that develops and publishes
operational performance metrics including operations, risk
management, financial and market metrics, and energy and
environmental metrics.

(7) Receive public comment in writing on the activities of the
bank.

(b) The chief executive officer may do any of the following:

(1) Establish additional reporting and information requirements
for any recipient of financing support made available pursuant to
this part.

(2) In accordance with procedures set forth in bylaws
established by the board, withdraw financing support made
available pursuant to this part to entities that demonstrate an
insufficient level of performance, or wasteful or fraudulent
spending, as defined in advance of the granting of any financing
support, and award these funds competitively to new or existing
applicants in accordance with this section.

begin insert 15880.100. end insert   

To the extent necessary and appropriate, the chief
executive officer may redact any information regarding applicants
and borrowers to protect confidential business information.

begin insert 15880.105. end insert   

The bank shall, not later than February 1 of each
year, submit to the Governor and the Joint Legislative Budget
Committee, pursuant to Section 9795, a report of its activities
pursuant to this act for the preceding fiscal year. The report shall
include all of the following:

(a) A listing of applications accepted.

(b) A specification of bonds sold and interest rates thereon.

(c) The amount of other public and private funds leveraged by
the assistance provided.

(d) A report of revenues and expenditures for the preceding
fiscal year, including all of the bank’s costs. The information
provided pursuant to this subdivision shall include, but need not
be limited to, both of the following:

(1) The amount and source of total bank revenues. Revenues
shall be shown by main categories of revenues, including interest
earnings, fees collected, and bond proceeds, for each bank
program.

(2) The amount and type of total bank expenditures.
Expenditures shall be shown by major categories of expenditures,
including loans provided, debt service payments, and program
support costs, for each bank program.

(e) Projection of the bank’s needs and requirements for the
coming year.

(f) Recommendations for changes in state law necessary to meet
the objectives of this part.

begin insert 15880.110. end insert   

The bank shall be audited annually. The audit shall
be conducted using generally accepted accounting standards by
an independent certified public accountant.

begin insert 15880.115. end insert   

The board shall commission independent,
comprehensive biennial evaluations of the performance of the
bank. The evaluations shall assess the effectiveness and
cost-effectiveness of all of the bank’s activities in meeting the
purpose of the bank as set forth in this part.

begin insert 15880.120. end insert   

This part shall remain in effect only until January
1, 2036, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2036, deletes or extends
that date.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 39712 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

39712.  

(a) (1) It is the intent of the Legislature that moneys
shall be appropriated from the fund only in a manner consistent
with the requirements of this chapter and Article 9.7 (commencing
with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title
2 of the Government Code.

(2) The state shall not approve allocations for a measure or
program using moneys appropriated from the fund except after
determining, based on the available evidence, that the use of those
moneys furthers the regulatory purposes of Division 25.5
(commencing with Section 38500) and is consistent with law. If
any expenditure of moneys from the fund for any measure or
project is determined by a court to be inconsistent with law, the
allocations for the remaining measures or projects shall be
severable and shall not be affected.

(b) Moneys shall be used to facilitate the achievement of
reductions of greenhouse gas emissions in this state consistent
with Division 25.5 (commencing with Section 38500) and, where
applicable and to the extent feasible:

(1) Maximize economic, environmental, and public health
benefits to the state.

(2) Foster job creation by promoting in-state greenhouse gas
emissions reduction projects carried out by California workers and
businesses.

(3) Complement efforts to improve air quality.

(4) Direct investment toward the most disadvantaged
communities and households in the state.

(5) Provide opportunities for businesses, public agencies,
nonprofits, and other community institutions to participate in and
benefit from statewide efforts to reduce greenhouse gas emissions.

(6) Lessen the impacts and effects of climate change on the
state’s communities, economy, and environment.

(c) Moneys appropriated from the fund may be allocated,
consistent with subdivision (a), for the purpose of reducing
greenhouse gas emissions in this state through investments that
may include, but are not limited to, any of the following:

(1) Funding to reduce greenhouse gas emissions through energy
efficiency, clean and renewable energy generation, distributed
renewable energy generation, transmission and storage, and other
related actions, including, but not limited to, at public universities,
state and local public buildings, and industrial and manufacturing
facilities.

(2) Funding to reduce greenhouse gas emissions through the
development of state-of-the-art systems to move goods and freight,
advanced technology vehicles and vehicle infrastructure, advanced
biofuels, and low-carbon and efficient public transportation.

(3) Funding to reduce greenhouse gas emissions associated with
water use and supply, land and natural resource conservation and
management, forestry, and sustainable agriculture.

(4) Funding to reduce greenhouse gas emissions through
strategic planning and development of sustainable infrastructure
projects, including, but not limited to, transportation and housing.

(5) Funding to reduce greenhouse gas emissions through
increased in-state diversion of municipal solid waste from disposal
through waste reduction, diversion, and reuse.

(6) Funding to reduce greenhouse gas emissions through
investments in programs implemented by local and regional
agencies, local and regional collaboratives, begin delete and end delete nonprofit
organizations coordinating with local begin delete governments. end delete begin insert governments,
and, until January 1, 2036, the California Green Bank (Part 11.5
(commencing with Section 15880) to Division 3 of Title 2 of the
Government Code). end insert

(7) Funding research, development, and deployment of
innovative technologies, measures, and practices related to
programs and projects funded pursuant to this chapter.

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

The Legislature finds and declares that Section 1 of
this act, which adds Section 15880.100 of the Government Code,
imposes a limitation on the public’s right of access to the meetings
of public bodies or the writings of public officials and agencies
within the meaning of Section 3 of Article I of the California
Constitution. Pursuant to that constitutional provision, the
Legislature makes the following findings to demonstrate the interest
protected by this limitation and the need for protecting that
interest:

end insert begin insert

Protecting confidential business information is necessary to
protect the legitimate, private interests of California businesses.

end insert

begin delete

SECTION 1.  

(a) It is the intent of the Legislature to enact
legislation that would establish the California Green Bank to
coordinate, align, and enhance the state’s efforts to provide energy
finance programs for advanced energy technologies and projects
throughout the state by accomplishing all of the following:

(1) Reducing rates and decreasing costs for California ratepayers
while expanding the accessibility and affordability of clean energy
for all Californians.

(2) Increasing private investment in clean energy projects that
currently are not able to obtain financing in traditional capital
markets at a reasonable cost by providing a variety of financial
tools to stimulate private investment.

(3) Achieving California’s environmental and economic
objectives by reducing greenhouse gas emissions and increasing
investments in disadvantaged communities.

(4) Facilitating efficient, low-cost private financing markets for
clean energy projects.

(5) Supporting California’s unique position as a worldwide
leader in clean energy innovation by helping to bring innovative
technologies to market.

(b) It is the intent of the Legislature to enact legislation that
would establish a board of directors for the California Green Bank
to be composed of appointees by the Governor, the Legislature,
the Treasurer, the Department of Finance, the California Public
Utilities Commission, the California Energy Commission, and the
California Air Resources Board, who possess expertise in financing
and green investments. The legislation would further provide for
the creation of governing documents for the California Green Bank
and the position of an executive director to manage and conduct
the business of the California Green Bank, subject to the direction
of its board.

end delete