Amended in Assembly August 19, 2014

Amended in Assembly July 1, 2014

Amended in Assembly June 10, 2014

Amended in Senate April 29, 2014

Amended in Senate April 10, 2014

Senate Bill No. 1121

Introduced by Senator De León

February 19, 2014

An act to add Chapter begin delete 5 (commencing with Section 26100) to Division 16 of the Public Resources end delete begin insert 7 (commencing with Section 63100) to Division 1 of Title 6.7 of the Government end insert Code, relating to greenhouse gases.

LEGISLATIVE COUNSEL’S DIGEST

SB 1121, as amended, De León. California Climate Technology and Infrastructure Financing Act.

begin delete

Existing law establishes the California Alternative Energy and Advanced Transportation Financing Authority consisting of specified members and authorizes the authority to provide financial assistance to projects related to the utilization of alternative energy sources or advanced transportation technologies.

end delete begin insert

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.

end insert

This bill would enact the California Climate Technology and Infrastructure Financing Act and would require the begin delete authority, end delete begin insert bank, end insert in consultation with the State Air Resources Board, to begin delete develop end delete begin insert administer end insert the California Climate begin delete Technology and Infrastructure Financing Program end delete begin insert Solutions Accelerator Account, which would be established by the bill in the California Infrastructure and Economic Development Bank Fund, end insert to provide financial assistance to eligible greenhouse gas emissions reduction projects, as begin delete defined. The bill would establish the Climate Technology and Infrastructure Finance Fund and would, upon appropriation by the Legislature, require the authority to expend moneys in the fund for the purposes of the program. end delete begin insert defined, upon appropriation by the Legislature. end insert

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

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

SECTION 1.  

Chapter begin delete 5 end delete begin insert 7 end insert (commencing with Section begin delete 26100) end delete
begin insert 63100) end insert is added to Division begin delete 16 end delete begin insert 1 end insert of begin insert Title 6.7 of end insert the begin delete Public
Resources end delete begin insert Government end insert Code, to read:

 

Chapter   begin delete 5. end delete begin insert 7. end insert California Climate Technology and
Infrastructure Financing Act

 

Article 1.  General Provisions and Definitions

 

begin delete 26100. end delete
begin insert 63100. end insert   

begin insert (a) end insert begin insert   end insert The Legislature finds and declares all of the
following:

begin delete

(a)

end delete

begin insert (1) end insert  The California Global Warming Solutions Act of 2006
(Division 25.5 (commencing with Section 38500) of the Health
and Safety Code) requires the reduction of statewide greenhouse
gas emissions to 1990 levels by 2020.

begin delete

(b)

end delete

begin insert (2) end insert  As a result of the act and complimentary policies, California
has established itself as a leader in the development of clean
technologies, helping to drive innovation and deployment of a
variety of greenhouse gas emissions reducing technologies.

begin delete

(c)

end delete

begin insert (3) end insert  However, there exist barriers to the widespread adoption
and commercial scale deployment of these technologies and, as a
result, cleaner, lower-carbon, cheaper, and more reliable energy
remains unavailable to many California consumers and businesses.

begin delete

(d)

end delete

begin insert (4) end insert  Among the most critical barriers is the availability of
financing options for consumers and businesses, and the lack of
familiarity and perceived risk for investors due to limited data,
and, often, small and expensive financial transactions.

begin delete

(e)

end delete

begin insert (5) end insert  To achieve the state’s climate goals, the state should better
optimize our limited public dollars to attract more private
investment, so that each dollar of public funds provides multiple
dollars of private capital.

begin delete

(f)

end delete

begin insert (6) end insert  A statewide financing entity focused on fostering private
investments in low-carbon projects can provide significant
leveraging of private dollars to make public funds go further.

begin delete

(g)

end delete

begin insert (7) end insert  A statewide financing entity in California could accelerate
the transition to a low-carbon economy, achieve the state’s climate
goals, and improve access for all Californians to cleaner energy.
A financing entity could help achieve all of the following goals:

begin delete

(1)

end delete

begin insert (A) end insert  Evaluate, coordinate, and increase private investment in
greenhouse gas emissions reduction projects that are not currently
able to obtain financing in the capital markets at a reasonable cost
and with a reasonable rate of return to project developers at scale
and with significant private sector participation.

begin delete

(2)

end delete

begin insert (B) end insert  Lower 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
and water supplies, increase the climate resilience of the state’s
infrastructure, increase the use of clean energy, promote energy
efficiency, and advance the state’s energy- and
infrastructure-related economy.

begin delete

(3)

end delete

begin insert (C) end insert  Foster increasingly efficient, low-cost capital financing at
scale and with maximum private sector participation for eligible
projects through the creation, where appropriate, of financial
performance data, standardized contracts, underwriting standards,
and measurement and verification protocols.

begin delete

(4)

end delete

begin insert (D) end insert  Coordinate with, and enhance, existing clean energy
financing programs to fill financing gaps not currently filled by
existing programs or markets and further enhance the scale and
scope of existing programs or markets to enabling financing at
scale and with maximum private sector participation.

begin delete

(5)

end delete

begin insert (E) end insert  Implement a variety of financing tools, including, but not
limited to, loans, loan guarantees, securitization, warehousing, and
other forms of financing support and risk management, to support
greenhouse gas emissions reduction projects necessary to advance
the state’s policy objectives, including the reduction of greenhouse
gas emissions within the state.

begin insert

(b) Moneys appropriated by the Legislature for the purposes of
this chapter from the Greenhouse Gas Reduction Fund shall be
expended consistent with the appropriation processes and criteria
established by the Greenhouse Gas Reduction Fund Investment
Plan and Communities Revitalization Act (Chapter 4.1
(commencing with Section 39710) of Part 2 of Division 26 of the
Health and Safety Code) to ensure investments made pursuant to
this chapter benefit disadvantaged communities identified pursuant
to Section 39711 of the Health and Safety Code.

end insert

begin delete 26101. end delete
begin insert 63101. end insert   

For the purposes of this chapter, the following terms
mean the following:

begin insert

(a) “Account” means the California Climate Solutions
Accelerator Account established pursuant to Section 63130.

end insert begin delete

(a)

end delete

begin insert (b) end insert  “Clean agriculture project” means a project, product, service,
function, or measure, or an aggregation of projects, products,
services, functions, or measures, having the primary purpose of
deploying a product or service that avoids or reduces emissions
of greenhouse gases directly or indirectly caused by the production
or processing of crops or livestock.

begin delete

(b)

end delete

begin insert (c) end insert  “Clean energy infrastructure project” means the construction,
alteration, or repair of types 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, the following:

(1) Electric transmission and distribution facilities
interconnected to renewable energy projects or system efficiency
projects.

(2) Hydrogen transportation and distribution systems.

(3) Car sharing, ridesharing, and bicycle sharing facilities.

(4) Improvements to infrastructure used for the transportation
of passengers, goods, or freight.

begin delete

(c)

end delete

begin insert (d) end insert  “Demand response project” means a project, product, service,
function, or measure, or an aggregation of projects, products,
services, functions, or measures, that results in reductions in
greenhouse gas emissions by reducing electric usage by end-use
customers in the state from their normal consumption pattern 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 or when system reliability is
jeopardized.

begin delete

(d)

end delete

begin insert (e) end insert  “Energy efficiency project” means a project, product, service,
function, or measure, or an aggregation of projects, products,
services, functions, or measures, that results in the reduction of
energy usage required to achieve the same level of service or output
prior to the application of the project, 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, product, service, function, or measure, including, but not
limited to, either of the following:

(1) Water capture, conveyance, distribution, use, reuse, and
recycling.

(2) Wastewater collection, treatment, and disposal.

begin delete

(e) “Fund” means the California Climate Technology and
Infrastructure Finance Fund established pursuant to Section 26130.

end delete

(f) “Greenhouse gas emissions reduction project” means a
project, product, service, function, or measure, or an aggregation
of projects, products, services, functions, or measures, that avoids
or reduces emissions of greenhouse gases, including, but not
limited to, any of the following:

(1) Energy efficiency projects.

(2) Clean energy infrastructure projects.

(3) Innovation energy technology projects.

(4) Renewable begin insert and small scale distributed end insert energy projects.

(5) System efficiency projects.

(6) Clean agriculture projects.

(7) Low-carbon transportation projects.

(8) Demand response projects.

(9) Land-based greenhouse gas sequestration projects.

(10) A combination of the projects specified in paragraphs (1)
to (9), inclusive.

(g) “Innovation energy technology project” means a project
having either of the following primary purposes:

(1) Deployment 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 begin delete authority end delete begin insert bank end insert pursuant to
this chapter.

(2) Manufacturing of a commercially ready energy technology
or product that avoids or reduces emissions of air pollutants and
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 begin delete authority end delete begin insert bank end insert pursuant to this chapter.

(h) “Land-based greenhouse gas sequestration project” means
a project, product, service, function, or measure, or an aggregation
of projects, products, services, functions, or measures, having a
primary purpose of begin delete developing, constructing, or deploying a project
in forests, grasslands, wetlands, or other habitat types in California
for which a carbon credit or offset protocol has been adopted by
the state board. end delete begin insert reducing greenhouse gas emissions, including
carbon sequestration in forests, urban forests, grasslands,
wetlands, or other habitat types in California. end insert

(i) “Low-carbon transportation project” means a project, product,
service, function, or measure, or an aggregation of projects,
products, services, functions, or measures, that results in reductions
in greenhouse gas emissions from the transportation of people,
goods, freight, or off-road equipment.

begin delete

(j) “Program” means the California Climate Technology and
Infrastructure Financing Program developed pursuant to Section
26110.

end delete begin delete

(k)

end delete

begin insert (j) end insert  “Renewable energy project” means the development,
construction, deployment, or alteration of an eligible renewable
energy resource, as defined in Section 399.12 of the Public Utilities
Code, that avoids or reduces greenhouse gas emissions.

begin delete

(l)

end delete

begin insert (k) end insert  “State board” means the State Air Resources Board.

begin delete

(m)

end delete

begin insert (l) end insert  “System efficiency project” means the development,
construction, deployment, alteration, or repair of a distributed
generation, energy storage, smart grid, advanced battery, microgrid,
fuel cell, water pumping, or combined heat and power, technology
or system that results in the reductions of greenhouse gas
emissions.

 

Article 2.  California Climate Change begin delete Technology and
Infrastructure Financing Program end delete begin insert Solutions Accelerator end insert

 

begin delete 26110. end delete
begin insert 63110. end insert   

(a) The begin delete authority, end delete begin insert bank, end insert in consultation with the state
board, shall begin delete develop and end delete administer the California Climate
begin delete Technology and Infrastructure Financing Program end delete begin insert Solutions
Accelerator Account end insert to provide financial assistance for greenhouse
gas emissions reduction projects consistent with this chapter, the
guiding document developed pursuant to Section begin delete 26120, end delete begin insert 63120, end insert
and both of the following:

(1) Earning a net positive return on the financial assistance made
pursuant to this chapter.

(2) Maximizing net greenhouse gas emissions reductions for
each dollar provided by focusing financial support on filling
demonstrated financing gaps that are the key barriers to greater
investment or market transformation.

(b) Greenhouse gas emissions reduction projects eligible for
financial assistance pursuant to this chapter shall demonstrate all
of the following:

(1) Reduction in net emissions of greenhouse gases.

(2) Partnership with a private financial institution or lender.

(3) Ability for the project to meet applicable permitting
requirements.

(4) Ability to create jobs in the state.

(5) Technological viability.

(6) Ability to, over time, pay back the financial assistance
provided pursuant to this chapter.

(7) The existence of a financing gap that is a barrier to project
implementation or market growth.

(8) Other requirements deemed necessary by the begin delete authority. end delete begin insert bank. end insert

(c) The begin delete authority end delete begin insert bank end insert shall establish a portfolio approach to
the provision of financial assistance to address different industry
needs and different development and commercialization stages of
technology.

(d) The begin delete authority end delete begin insert bank end insert may accept applications for financial
assistance pursuant to the program on an ongoing and open
solicitation basis.

begin insert

(e) (1) Sections 10295 of, and Article 4 (commencing with
Section 10335) of Chapter 2 of Part 2 of Division 2 of, the Public
Contract Code shall not apply to agreements entered into by the
bank in connection with financial assistance provided pursuant
to this chapter.

end insert begin insert

(2) To the extent that this chapter is inconsistent with other state
laws, this chapter shall prevail over those laws.

end insert

begin delete 26111. end delete
begin insert 63111. end insert   

(a) The begin delete authority, end delete begin insert bank, end insert in consultation with the state
board, shall establish guidelines for the program and project
eligibility that are consistent with the requirements of the California
Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code)
and the Greenhouse Gas Reduction Fund Investment Plan and
Communities Revitalization Act (Chapter 4.1 (commencing with
Section 39710) of the Health and Safety Code). The guidelines
shall include consideration of whether providing financial
assistance for a greenhouse gas emissions reduction project will
do the following:

(1) Increase private investment in greenhouse gas emissions
reduction projects that are not currently able to obtain financing
at attractive terms or through an existing state program.

(2) Enable the implementation and scaling of greenhouse gas
emissions reduction projects to increase deployment of innovative
financing by leveraging limited public dollars to attract private
capital.

(3) Facilitate the deployment of greenhouse gas emissions
reduction projects at an accelerated rate.

(4) Enhance the competitiveness of California-based companies
and reduce leakage of greenhouse gas emissions to other
jurisdictions.

(5) Achieve cobenefits, such as enhanced water supply,
improved water quality, improved air quality, enhanced urban
environments, begin insert local reliability and resiliency, end insert and improved public
health and wildlife habitat.

(6) Address barriers that have prevented adequate commercial
financing of greenhouse gas emissions reduction projects.

(b) Priority shall be given to projects that demonstrate the ability
to meet the following criteria:

(1) Increase private investment in otherwise commercially viable
greenhouse gas emissions reduction projects not currently able to
obtain financing in the capital markets at a reasonable cost with a
reasonable rate of return.

(2) Increase private investment in greenhouse gas emissions
reduction projects located in disadvantaged communities identified
pursuant to Section 39711 of the Health and Safety Code.

(3) Maximize economic, environmental, and public health
benefits to the begin delete state. end delete begin insert state, including the competitiveness of
California companies to achieve greenhouse gas emissions
reduction. end insert

begin delete 26112. end delete
begin insert 63112. end insert   

begin insert (a) end insert begin insert   end insert The begin delete authority end delete begin insert bank board end insert shall appoint an executive
officer to oversee and implement begin delete the program, end delete begin insert this chapter, end insert who
meets begin delete all end delete begin insert both end insert of the following requirements:

begin delete

(a)

end delete

begin insert (1) end insert  Demonstrates significant experience and knowledge of
private sector financing of low-carbon technologies and projects.

begin delete

(b)

end delete

begin insert (2) end insert  Does not have any financial interest in any greenhouse gas
emissions reduction project under consideration or any financial
interest in an investment institution or its affiliates or any other
entity seeking or likely to seek financial assistance for any
greenhouse gas emissions reduction project pursuant to this chapter.

begin delete

(c) Has

end delete

begin insert (b) end insert begin insert   end insert begin insert The executive officer shall have end insert the ability to hire staff with
experience and knowledge of private sector financing structures
and tools.

begin delete 26113. end delete
begin insert 63113. end insert   

The begin delete authority end delete begin insert bank end insert shall convene, at least twice each
year, in a public process, an advisory stakeholder group consisting
of clean energy stakeholders with experience in clean energy
begin delete financing end delete begin insert financing, financing assistance for low-income
communities, end insert or technological expertise. The advisory group shall
provide to the begin delete authority end delete begin insert bank end insert information on topics, including, but
not limited to, current market needs, financial feasibility of
financial tools, commercial feasibility of greenhouse gas emissions
reducing technologies and projects, and relevant studies.

 

Article 3.  Oversight and Coordination

 

begin delete 26120. end delete
begin insert 63120. end insert   

(a)  begin delete The authority end delete begin insert On or before December 30, 2015,
the bank end insert shall prepare a three-year guiding document, consistent
with the three-year investment plan developed pursuant to Section
39716 of the Health and Safety Code, outlining planned financial
assistance categories and how financial assistance furthers the
reductions of greenhouse gas emissions. The guiding document
shall establish priorities for investment of funds to achieve the
goals of this chapter and describe how funding will complement
existing public and private investments, including existing state
programs that further the goals of this chapter. The guiding
document shall identify gaps in existing programs or private
financing markets that can be filled by financial assistance made
pursuant to this chapter to achieve the goals of this chapter. begin insert The
bank may use the three-year investment plan developed pursuant
to Section 39716 of the Health and Safety Code to guide
investments made prior to the completion of the guiding document
pursuant to this section. end insert

(b) In developing the guiding document, the begin delete authority end delete begin insert bank end insert shall
convene and consult with a climate and energy incentive
coordination advisory body consisting of the following:

(1) The chair of the state board or his or her designee.

(2) The chair of the State Energy Resources Conservation and
Development Commission or his or her designee.

(3) The President of the Public Utilities Commission or his or
her designee.

(4) The Treasurer or his or her designee.

(5) The Director of the Governor’s Office of Business and
Economic Development or his or her designee.

(6) The Director of Water Resources or his or her designee.

(7) Two members appointed by the Speaker of the Assembly.

(8) Two members appointed by the Senate Committee on Rules.

begin insert

(9) Not less than one member appointed pursuant to paragraph
(7) or (8) shall represent the interest of disadvantaged
communities, as identified pursuant to Section 39711 of the Health
and Safety Code, and shall have appropriate expertise.

end insert

(c) The advisory body is subject to the requirements of the
Bagley-Keene Open Meeting Act (Article 9 (commencing with
Section 11120) of Chapter 1 of Part 1 of Division 3 of Title begin delete 2 of
the Government Code). end delete begin insert 2). end insert

begin delete 26121. end delete
begin insert 63121. end insert   

(a) No later than July 30, begin delete 2016, end delete begin insert 2017, end insert and annually
thereafter, the begin delete authority end delete begin insert bank end insert shall report to the Legislature on the
progress of the financial assistance provided pursuant to this
chapter, the performance of the begin delete program, end delete begin insert investments made
pursuant to this chapter, end insert how the financial assistance provided has
supported the goals of this chapter, and how the financial assistance
has been coordinated with other state incentive programs.

(b) The report required pursuant to subdivision (a) shall be
submitted in accordance with Section begin delete 9795 of the Government
Code. end delete begin insert 9795. end insert

 

Article 4.  Financial Provision

 

begin delete 26130. end delete
begin insert 63130. end insert   

(a) The begin insert California end insert Climate begin delete Technology and
Infrastructure Finance Fund end delete begin insert Solutions Accelerator Account end insert is
hereby established in the begin delete State Treasury. end delete begin insert California Infrastructure
and Economic Development Bank Fund. end insert Moneys in the begin delete fund, end delete
begin insert account, end insert upon appropriation of the Legislature, shall be expended
by the begin delete authority end delete begin insert bank end insert for the purpose of this chapter.

(b) The begin delete fund end delete begin insert account end insert is a repository of both of the following:

(1) Moneys transferred by the Legislature from the Greenhouse
Gas Reduction Fund established pursuant to Section 16428.8 begin delete of
the Government Code end delete for the purposes of carrying out this chapter.

(2) Other moneys, including, but not limited to, revenues from
bonds and other securities issued by the begin delete authority end delete begin insert bank end insert and fees
collected pursuant to this division, and gifts and grants to the
begin delete authority, end delete begin insert bank, end insert if issued, collected, granted, or gifted for the
purposes of this chapter.