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<ns0:Id>20250AB__078694CHP</ns0:Id>
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<ns0:ActionText>INTRODUCED</ns0:ActionText>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
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<ns0:ActionText>PASSED_ASSEMBLY</ns0:ActionText>
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<ns0:ActionDate>2025-09-09</ns0:ActionDate>
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<ns0:ActionText>ENROLLED</ns0:ActionText>
<ns0:ActionDate>2025-09-12</ns0:ActionDate>
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<ns0:ActionText>CHAPTERED</ns0:ActionText>
<ns0:ActionDate>2025-10-13</ns0:ActionDate>
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<ns0:ActionText>APPROVED</ns0:ActionText>
<ns0:ActionDate>2025-10-13</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>FILED</ns0:ActionText>
<ns0:ActionDate>2025-10-13</ns0:ActionDate>
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<ns0:LegislativeInfo>
<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>AB</ns0:MeasureType>
<ns0:MeasureNum>786</ns0:MeasureNum>
<ns0:MeasureState>CHP</ns0:MeasureState>
<ns0:ChapterYear>2025</ns0:ChapterYear>
<ns0:ChapterType>CHP</ns0:ChapterType>
<ns0:ChapterSessionNum>0</ns0:ChapterSessionNum>
<ns0:ChapterNum>710</ns0:ChapterNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Solache</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Solache</ns0:Name>
</ns0:Legislator>
</ns0:Authors>
<ns0:Title>An act to amend Sections 6588.7, 7924.505, and 12100.33 of the Government Code, to amend Sections 40448.6, 41503.6, 44391.4, 44500, 44501, 44504, 44515, 44558, 44559.1, 44559.13, 44559.14, and 53545.14 of the Health and Safety Code, to amend Sections 14584 and 42652.5 of the Public Resources Code, and to amend Sections 201.5 and 6010.10 of the Revenue and Taxation Code, relating to state government.</ns0:Title>
<ns0:RelatingClause>state government</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>California Pollution Control Financing Authority: name change.</ns0:Subject>
</ns0:GeneralSubject>
<ns0:DigestText>
<html:p>Existing law establishes the California Pollution Control Financing Authority, which consists of 3 members: the Director of Finance, the Treasurer, and the Controller. Existing law requires the authority to provide the maximum opportunity for the use of the authority’s financing by individuals, businesses engaged in agricultural operations, and small businesses or corporations by providing information, assistance, and coordination to facilitate financing for small projects and other financing that benefits the environment and the economy of the state, as specified.</html:p>
<html:p>This bill would rename the authority as the Capital Programs and Climate Financing Authority.</html:p>
<html:p>This bill would incorporate additional changes
to Section 42652.5 of the Public Resources Code proposed by AB 70 to be operative only if this bill and AB 70 are enacted and this bill is enacted last.</html:p>
</ns0:DigestText>
<ns0:DigestKey>
<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>NO</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
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<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>NO</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
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<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
<ns0:BillSection id="id_2401170D-6C32-4ECA-B343-1EC9E08D2208">
<ns0:Num>SECTION 1.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:GOV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'7.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'5.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'6588.7.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 6588.7 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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<ns0:LawSection id="id_06740A22-42A1-4DBF-85D7-18290AB883D3">
<ns0:Num>6588.7.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
An authority whose financing activities are limited to financing utility projects and projects for the use or benefit of public agencies providing water, wastewater, or electrical service may finance utility projects as provided in this section, including the issuance of rate reduction bonds and the imposition and adjustment of utility project charges.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A local agency that owns and operates a publicly owned utility may apply to an authority specified in subdivision (a) to finance costs of a utility project for the publicly owned utility with the proceeds of rate reduction bonds if at the time of application, bonds payable from revenues of the publicly owned
utility are, or upon issuance would be, rated investment grade by a nationally recognized rating agency. In its application to an authority for the financing or refinancing, the local agency shall specify the utility project to be financed by the rate reduction bonds, the maximum principal amount, the maximum interest rate, and the maximum stated terms of the rate reduction bonds.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
In order to allow the state to review the issuance of rate reduction bonds, collect data, ensure transparency, and conduct an independent analysis of the effectiveness of the use of rate reduction bonds pursuant to this section, the Capital Programs and Climate Financing Authority, as defined in Section 44504 of the Health and Safety Code, shall review each issue of bonds and shall determine whether the issue is qualified for
issuance under the provisions of this section. The
Capital Programs and Climate Financing Authority shall determine that an issue of rate reduction bonds is qualified for issuance under this section, if the issuance satisfies all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The issuance meets the criteria specified in paragraphs (1) to (3), inclusive, of subdivision (c), or, if the local agency elects to make a determination under paragraph (4) of subdivision (c), meets the criteria specified in paragraphs (1), (2), and (4) of subdivision (c).
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
The projected financing costs fall within the normal range of financing costs for comparable types of debt issuance.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The
Capital Programs and Climate Financing Authority shall determine that an issue of rate reduction bonds is qualified for issuance pursuant to subparagraph (A) solely on the basis of the submitted documentation referred to in subparagraph (A), and the determination shall not be conditional in any respect, including conditional on the submission or review of additional material after the determination.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The Capital Programs and Climate Financing Authority shall establish procedures for the expeditious review of a proposed issuance pursuant to this section, including, but not limited to, the establishment of reasonable application fees to reimburse the
Capital Programs and Climate Financing Authority for costs incurred in administering this section. The Capital Programs and Climate Financing Authority may charge additional fees in an amount equal to the amount of any additional expenses incurred by the authority in retaining an independent financial advisor to review the application under circumstances involving the verification of all requirements of this section. Any fees for review and processing of the application shall be nonrefundable.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The Capital Programs and Climate Financing Authority shall provide an explanation in writing for any refusal to qualify a proposed issuance but may not alter or modify any term or condition related to the utility project property.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The Capital Programs
and Climate Financing Authority shall take action on any completed application submitted to it pursuant to this section no later than the next meeting of the Capital Programs and Climate Financing Authority that occurs after at least 60 days following receipt of the application.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
The review and qualification pursuant to this section may be concurrent with an authority’s processing of an application for financing or refinancing so as to allow for the issuance of rate reduction bonds as quickly as feasible.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Notwithstanding any other law, the Capital Programs and Climate Financing Authority may adopt regulations relating to this section as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3. For purposes
of that chapter, including Section 11349.6, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Annually, no later than March 31, the Capital Programs and Climate Financing Authority shall submit to the Legislature, including to the relevant legislative policy committees having jurisdiction over energy and public utilities issues, a report of its activities pursuant to this section for the preceding calendar year ending December 31. The
Capital Programs and Climate Financing Authority shall require information from applicants to ensure that the necessary data is available to complete this report. The report may be submitted as a part of the report required pursuant to Section 44538 of the Health and Safety Code. The report shall include all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
A listing of applications received.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
A listing of proposed issuances qualified under the provisions of this section.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
A report of bonds sold, the interest rates on the bonds, whether the bond sales were pursuant to public bid or were negotiated, and any rating given the bonds by a nationally recognized securities rating organization.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
A specification of proposed issuances qualified but not yet issued.
</html:p>
<html:p>
(v)
<html:span class="EnSpace"/>
A comparison of the interest rates and transactional costs on issuances qualified under this section with interest rates on comparable types of debt issuance occurring at or near the same time as the issuances.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A report to be submitted pursuant to this paragraph shall be submitted in compliance with Section 9795.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
The provisions of paragraphs (2) to (8), inclusive, shall not apply to the issuance of rate reduction bonds for a publicly owned utility if the determinations of the local agency pursuant to subdivision (c) are subject to review by a ratepayer advocate or similar
entity whose function is to provide public independent analysis of a public utility’s actions as they relate to water, wastewater, or electric rates.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A local agency shall not apply to an authority for financing or refinancing of a utility project pursuant to this section unless the legislative body of the local agency has determined all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The project to be financed or refinanced is a utility project.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The local agency is electing to finance or refinance costs of the utility project pursuant to this section and the financing costs associated with the financing or refinancing are to be paid from utility project property, including the utility project charge for the rate reduction bonds issued for
the utility project in accordance with this section.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Based on information available to, and projections used by, the legislative body, the rates of the publicly owned utility plus the utility project charge resulting from the financing or refinancing of the utility project with rate reduction bonds are expected to be lower than the rates of the publicly owned utility if the utility project was financed or refinanced with bonds payable from revenues of the publicly owned utility.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A local agency with a publicly owned utility having 500,000 or more retail customers may, in lieu of making the determination in paragraph (3), determine that the use of rate reduction bonds to finance or refinance utility projects provides substantial benefits to the publicly owned utility.
These benefits may include, but are not limited to, lower interest rates on rate reduction bonds and more favorable capitalization and debt service coverage ratio treatment that results in gross or present value lifetime savings for the publicly owned utility.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Subject to the requirements of Article XIII D of the California Constitution, to the extent applicable, an authority financing the costs of a utility project or projects for a local agency’s publicly owned utility with rate reduction bonds is authorized and directed to impose and collect a utility project charge with respect to the rate reduction bonds as provided in this section. The imposition of the utility project charge shall be made and evidenced by the adoption of a financing resolution by the governing body of the authority. Upon the issuance of
rate reduction bonds, the financing resolution adopted in connection with the issuance of rate reduction bonds shall be irrevocable. The financing resolution with respect to financing or refinancing a utility project or projects with rate reduction bonds for a publicly owned utility shall include all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The addition of a separate charge to the bill of each customer of the publicly owned utility in the class or classes of customers specified in the financing resolution.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A description of the financial calculation, formula, or other method that the authority is to use to determine the utility project charge. The calculation, formula, or other method shall include a periodic adjustment method to the then current utility project charge, to be applied at least
annually, that shall be used by the authority to correct for any overcollection or undercollection of financing costs from the utility project charge or any other adjustment necessary to ensure timely payment of the financing costs of the rate reduction bonds, including, but not limited to, the adjustment of the utility project charge to pay any debt service coverage requirement for the rate reduction bonds. The financial calculation, formula, or other method, including the periodic adjustment method, established in the financing resolution pursuant to this section, and the allocation of utility project charges to, and among, customers of the publicly owned utility shall be decided solely by the governing body of the authority and shall be final and conclusive. In no event shall the periodic adjustment method established in the financing resolution be applied less frequently than required by the
financing resolution and the documents relating to the applicable rate reduction bonds. Once the financial calculation, formula, or other method for determining the utility project charge, and the periodic adjustment method, have been established in the financing resolution and have become final and conclusive as provided in this section, they shall not be changed.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Notwithstanding any other provision of this section, the imposition of a utility project charge shall comply with the requirements of Article XIII
<html:span class="ThinSpace"/>
D of the California Constitution, to the extent applicable, including, but not limited to, the provision of a notice containing the initial amount of the proposed utility project charge and the periodic adjustment method by which the utility project charge amount could subsequently change.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A requirement that the authority enter into a servicing agreement for the collection of the utility project charge with the local agency for which the financing is undertaken or its publicly owned utility and the local agency or its publicly owned utility shall act as a servicing agent for purposes of collecting the utility project charge as long as the servicing agreement remains in effect. Moneys collected by the local agency or its publicly owned utility, acting as a servicing agent on behalf of the authority, as a utility project charge shall be held in trust for the exclusive benefit of the persons entitled to the financing costs to be paid, directly or indirectly, from the utility project charge and shall not lose their character as revenues of the authority by virtue of possession by the local agency or its publicly owned utility. The
local agency or its publicly owned utility shall provide the authority with the information as to estimated sales of water, wastewater, or electrical services and any other information concerning the publicly owned utility required by the authority in connection with the initial establishment and the adjustment of the utility project charge.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The determination of the legislative body of the local agency that a project to be financed with rate reduction bonds is a utility project shall be final and conclusive and the rate reduction bonds issued to finance the utility project and the utility project charge imposed relating to the rate reduction bonds shall be valid and enforceable in accordance with the terms of the financing resolution and the documents relating to the rate reduction bonds. The
authority shall require, in its financing resolution with respect to a utility project charge, that as long as a customer in the class or classes of customers specified in the financing resolution receive water or electricity or discharge wastewater through the facilities of the publicly owned utility, the customer shall pay the utility project charge regardless of whether or not the customer has an agreement to purchase water or electricity or discharge wastewater from a person or entity other than the publicly owned utility. The utility project charge shall be a nonbypassable charge to all customers of the publicly owned utility in the class or classes of customers specified in the financing resolution at the time of adoption of the financing resolution and all future customers in that class or classes. If a customer of the publicly owned utility that is subject to a utility project
charge enters into an agreement to purchase water or electricity or discharge wastewater from a person or entity other than the publicly owned utility, the customer shall remain liable for the payment of its share of the utility project charge as if it had not entered into the agreement. The liability may be discharged by the continued payment of its share of the utility project charge as it accrues or by a one-time payment, as determined by the authority. All provisions of a financing resolution adopted pursuant to this subdivision shall be binding on the authority.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The timely and complete payment of all utility project charges by a person liable for the charges shall be a condition of receiving water, wastewater, or electrical service, as applicable, from the publicly owned utility of the local agency and each of the local agencies
and their publicly owned utilities is authorized to use its established collection policies and all rights and remedies provided by law to enforce payment and collection of the utility project charge. In no event shall a person liable for a utility project charge be entitled or authorized to withhold payment, in whole or in part, of the utility project charge for any reason.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The authority shall determine whether adjustments to the utility project charge relating to rate reduction bonds are required upon the issuance of the rate reduction bonds and at least annually, and at additional intervals as may be provided for in the financing resolution or the documents relating to the rate reduction bonds. Each adjustment shall be made and put into effect in accordance with the financial calculation, formula, or other method that the authority is
to use to determine the utility project charge pursuant to the financing resolution expeditiously after the authority’s determination that the adjustment is required.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
All revenues with respect to utility project property related to rate reduction bonds, including payments of the utility project charge, shall be applied first to the payment of the financing costs of the related rate reduction bonds then due, including the funding of reserves for the rate reduction bonds, with any excess being applied as determined by the authority for the benefit of the utility for which the rate reduction bonds were issued.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
The authority shall be obligated to impose and collect the utility project charge relating to rate reduction bonds in amounts, based on estimates of water or electricity
usage or wastewater discharge subject to the utility project charge, sufficient to pay on a timely basis the financing costs associated with the rate reduction bonds when due. The pledge of a utility project charge to secure the payment of rate reduction bonds shall be irrevocable, and the State of California, the authority, or any limited liability company acting pursuant to subdivision (j) shall not reduce, impair, or otherwise adjust the utility project charge, except that the authority shall implement the periodic adjustments to the utility project charge relating to rate reduction bonds as required by the applicable financing resolution and the documents relating to the rate reduction bonds. Revenue from a utility project charge shall be deemed special revenue of the authority and shall not constitute revenue of the local agency or its publicly owned utility for any purpose, including, without
limitation, any dedication, commitment, or pledge of revenue, receipts, or other income that the local agency or its publicly owned utility has made or will make for the security of any of its obligations.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
A utility project charge shall constitute utility project property when, and to the extent that, a financing resolution authorizing the utility project charge has become effective in accordance with its terms, and the utility project property shall thereafter continuously exist as property for all purposes with all of the rights and privileges of this section for the period, and to the extent, provided in the financing resolution, but in any event until all financing costs with respect to the related rate reduction bonds are paid in full, including all arrearages thereon.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
Utility project property shall constitute a current property right notwithstanding that the value of the property right will depend on consumers using water, wastewater, or electrical services or, in those instances where consumers are customers of the publicly owned utility, the publicly owned utility performing certain services.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
If a local agency for which rate reduction bonds have been issued and remain outstanding ceases to operate a water, wastewater, or electric utility, either directly or through its publicly owned utility, references in this section to the local agency or to its publicly owned utility shall be to the entity providing water, wastewater, or electrical services in lieu of the local agency and the entity shall assume and perform all obligations of the local agency and its publicly owned utility
required by this section and the servicing agreement with the local agency while the rate reduction bonds remain outstanding.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Rate reduction bonds shall be within the parameters of the financing or refinancing set forth by the local agency pursuant to subdivision (b) in connection with the rate reduction bonds and the proceeds of the rate reduction bonds made available to the local agency or its publicly owned utility shall be used for the utility project identified in the application for financing or refinancing of the utility project or projects pursuant to subdivision (b).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
An authority shall authorize the issuance of rate reduction bonds by a resolution of its governing body. An authority issuing rate reduction bonds shall include in its preliminary
notice and final report for the rate reduction bonds submitted to the California Debt and Investment Advisory Commission pursuant to Section 8855 a statement that the rate reduction bonds are being issued pursuant to this section. An authority issuing rate reduction bonds shall include in its final report for the rate reduction bonds submitted to the California Debt and Investment Advisory Commission pursuant to Section 8855 the estimated savings or local agency benefit, if applicable pursuant to paragraph (4) of subdivision (c), realized by issuing the rate reduction bonds rather than bonds payable from the revenues of the publicly owned utility for whose benefit the rate reduction bonds were issued. Rate reduction bonds shall be nonrecourse to the credit or any assets of the local agency and the publicly owned utility for which the utility
project is financed and shall be payable from, and secured by a pledge of, the utility project property relating to the rate reduction bonds and any additional security or credit enhancement specified in the documents relating to the rate reduction bonds.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
An authority issuing rate reduction bonds shall pledge the utility project property relating to the rate reduction bonds as security for the payment of the rate reduction bonds, which pledge shall be made pursuant to, and with the effect set forth in Section 5451. All rights of an authority with respect to utility project property pledged as security for the payment of rate reduction bonds shall be for the benefit of, and enforceable by, the beneficiaries of the pledge to the extent provided in the documents relating to the rate reduction bonds.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
To the extent that any interest in utility project property is pledged as security for the payment of rate reduction bonds, the applicable local agency or its publicly owned utility shall contract with the authority, which contract shall be part of the utility project property, that the local agency or its publicly owned utility will continue to operate its publicly owned utility system that includes the financed utility project to provide service to its customers, will, as servicer, collect amounts in respect of the utility project charge for the benefit and account of the authority and the beneficiaries of the pledge of the utility project charge and will account for and remit these amounts to, or for the account of, the authority.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Notwithstanding any other law, any requirement under
this section, a financing resolution, any other resolution of the authority, or the provisions of the documents relating to rate reduction bonds to the effect that the authority shall take action with respect to the utility project property relating to the rate reduction bonds shall be binding upon the authority, as its governing body may be constituted from time to time, and the authority shall have no power or right to rescind, alter, or amend any resolution or document containing the requirement.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Notwithstanding any other law, except as otherwise provided in this section with respect to adjustments to a utility project charge, the recovery of the financing costs for the rate reduction bonds from the utility project charge shall be irrevocable and the authority shall not have the power either by rescinding, altering, or amending the
applicable financing resolution or otherwise, to revalue or revise for ratemaking purposes the financing costs of rate reduction bonds, determine that the financing costs for the related rate reduction bonds or the utility project charge is unjust or unreasonable, or in any way reduce or impair the value of utility project property that includes the utility project charge, either directly or indirectly; nor shall the amount of revenues arising with respect to the financing costs for the related rate reduction bonds or the utility project charge be subject to reduction, impairment, postponement, or termination for any reason until all financing costs to be paid from the utility project charge are fully met and discharged. Except as otherwise provided in this section with respect to adjustments to a utility project charge, the State of California does hereby pledge and agree with the owners of rate reduction
bonds that the State of California shall neither limit nor alter the financing costs or the utility project property, including the utility project charge, relating to the rate reduction bonds, or any rights in, to, or under, the utility project property until all financing costs with respect to the rate reduction bonds are fully met and discharged. This section does not preclude limitation or alteration if and when adequate provision shall be made by law for the protection of the owners. The authority is authorized to include this pledge and undertaking by the State of California in the governing documents for rate reduction bonds. Notwithstanding any other provision of this section, the authority shall make the adjustments to the utility project charge relating to rate reduction bonds provided by this section and the documents related to those rate reduction bonds as may be necessary to ensure timely payment of
all financing costs with respect to the rate reduction bonds. The adjustments shall not impose the utility project charge upon classes of customers that were not subject to the utility project charge pursuant to the financing resolution imposing the utility project charge.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Financing costs in connection with rate reduction bonds do not constitute a debt or liability of the State of California or of any political subdivision thereof, other than the special obligation of the authority, and do not constitute a pledge of the full faith and credit of the State of California or any of its political subdivisions, including the authority, but are payable solely from the funds provided therefor under this section and in the documents relating to the rate reduction bonds. This subdivision shall in no way preclude guarantees
or credit enhancements in connection with rate reduction bonds. All the rate reduction bonds shall contain on the face thereof a statement to the following effect:
</html:p>
<html:p>Neither the full faith and credit nor the taxing power of the State of California or any political subdivision thereof is pledged to the payment of the principal of, or interest on, this bond.</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The issuance of rate reduction bonds shall not directly, indirectly, or contingently obligate the State of California or any political subdivision thereof to levy or to pledge any form of taxation to pay the rate reduction bonds or to make any appropriation for their payment.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Utility project property shall constitute property for all purposes, including
for contracts securing rate reduction bonds, whether or not the revenues and proceeds arising with respect thereto have accrued.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Subject to the terms of the pledge document with respect to a pledge of utility project property, the validity and relative priority of a pledge created or authorized under this section is not defeated or adversely affected by the commingling of revenues arising with respect to the utility project property with other funds of the local agency or the publicly owned utility collecting a utility project charge on behalf of an authority.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
There shall exist a statutory lien on the utility project property relating to rate reduction bonds. Upon the effective date of the financing resolution relating to rate reduction bonds, there shall
exist a first priority statutory lien on all utility project property, then existing or, thereafter arising, to secure the payment of the rate reduction bonds. This lien shall arise pursuant to law by operation of this section automatically without any action on the part of the authority, the local agency or its publicly owned utility, or any other person. This lien shall secure the payment of all financing costs, then existing or subsequently arising, to the holders of the rate reduction bonds, the trustee or representative for the holders of the rate reduction bonds, and any other entity specified in the financing resolution or the documents relating to the rate reduction bonds. This lien shall attach to the utility project property regardless of who shall own, or shall subsequently be determined to own, the utility project property including any local agency or its publicly owned utility, the authority,
or any other person. This lien shall be valid and enforceable against the owner of the utility project property and all third parties upon the effectiveness of the financing resolution without any further public notice.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The statutory lien on utility project property created by this section is a continuously perfected lien on all revenues and proceeds arising with respect thereto, whether or not the revenues or proceeds have accrued. Utility project property shall constitute property for all purposes, including for contracts securing rate reduction bonds, whether or not the revenues or proceeds arising with respect thereto have accrued.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
In addition, the authority may require, in a financing resolution creating utility project property, that, in the event of default
by the local agency or its publicly owned utility, in payment of revenues arising with respect to the utility project property, any court in the state, upon the application by the beneficiaries of the statutory lien, and without limiting any other remedies available to the beneficiaries by reason of the default, shall order the sequestration and payment to the beneficiaries of revenues arising with respect to the utility project property.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Notwithstanding any other law, an authority or a limited liability company acting pursuant to subdivision (j) that has financed a utility project through the issuance of rate reduction bonds is not authorized, and no governmental officer or organization shall be empowered to authorize the authority, to become a debtor in a case under the United States Bankruptcy Code (11 U.S.C. Sec. 101 et seq.) or to become
the subject of any similar case or proceeding under any other law, whether federal or State of California, as long as any payment obligation from utility project property remains with respect to the rate reduction bonds.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
An authority may elect to implement a financing of a utility project pursuant to this section by forming a single member limited liability company and by authorizing the company to adopt the financing resolution. The authority may issue rate reduction bonds payable from, and secured by a pledge of, amounts paid by the company to the authority from the applicable utility project property pursuant to an agreement. The provisions of subdivisions (g) and (h) shall apply to and be the exclusive method of perfecting a pledge of utility project property by the company securing the payment of financing costs under any
agreement of the company in connection with the issuance of rate reduction bonds. Reference to the authority in this section and in all related defined terms shall mean or include the company as necessary to implement this
subdivision.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
After December 31, 2036, the authority to issue rate reduction bonds under this section terminates.
</html:p>
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</ns0:BillSection>
<ns0:BillSection id="id_427B1F6F-53A7-4A2A-9067-1D0AB63DAD78">
<ns0:Num>SEC. 2.</ns0:Num>
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Section 7924.505 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_EF288217-51F1-486F-89E7-1FF56C81300C">
<ns0:Num>7924.505.</ns0:Num>
<ns0:LawSectionVersion id="id_5CF113F6-4B20-457D-A67E-22CB1E801B1F">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Except as provided in Sections 7924.510, 7924.700, and 7929.610, this division does not require the disclosure of financial data contained in an application for financing under Division 27 (commencing with Section 44500) of the Health and Safety Code, if an authorized officer of the Capital Programs and Climate Financing Authority determines that disclosure of the financial data would be competitively injurious to the applicant and the data is required in order to obtain a guarantee from the United States Small Business Administration.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The Capital Programs and Climate Financing Authority shall adopt rules for review of individual requests for confidentiality under
this section and for making available to the public those portions of an application that are subject to disclosure under this division.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
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<ns0:BillSection id="id_AB4722AC-D4FC-4075-9FFE-21C515E09A26">
<ns0:Num>SEC. 3.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:GOV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'1.6.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'6.6.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'12100.33.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 12100.33 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_63C8ABCF-433E-4B11-86BA-311BC16C009C">
<ns0:Num>12100.33.</ns0:Num>
<ns0:LawSectionVersion id="id_6270FDDE-E117-4A95-924C-3E3253C9061D">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Upon appropriation by the Legislature, CalOSBA shall establish the California Employee Ownership Hub, administered by an Employee Ownership Hub Manager, appointed by the advocate.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The manager shall administer the Employee Ownership Hub, and may be responsible for the following duties:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Work with all California state agencies whose regulations and programs affect employee-owned companies, and businesses with the potential to become employee-owned, to enhance opportunities and reduce barriers.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Partner with relevant private, nonprofit, and public organizations
including, but not limited to, professional and trade
associations, financial institutions, labor unions, worker centers, Small Business Development Centers, economic and workforce development organizations, and nonprofit entities to educate business owners and employees about the benefits of employee ownership and employee ownership transition succession models.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Share materials regarding employee ownership benefits and employee ownership transition succession models.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Provide a referral service to help business owners, labor unions, workers, and worker centers find appropriate legal, financial, and technical employee ownership resources and services to assist in employee ownership transitions and the growth of employee-owned businesses.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Work with the California Infrastructure and Economic Development Bank, the
Capital Programs and Climate Financing Authority, and related entities to develop recommendations and enhance the ability of broad-based employee ownership vehicles to access California capital programs. Those recommendations shall only apply to ESOPs to the extent that the ESOPs satisfy one of the following conditions:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The ESOP has appointed an independent ESOP trustee.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The ESOP has, as a trustee, a person or entity that has completed education on ESOP trustee best practices.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Report to the Legislature, in accordance with Section 9795, on activities undertaken by the hub during the prior fiscal year, including recommendations for improvement.
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The
first report shall be due on January 15, following the first fiscal year in which funding is provided to implement any portion of this article.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
This reporting requirement may be met separately or the information may be included in the annual report required by subdivision (b) of Section 12098.4.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
CalOSBA shall also post the report to its internet website.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Report employee ownership transition related concerns and recommendations to the advocate.
</html:p>
</ns0:Content>
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</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_482D54AF-9833-4C2C-823D-AC57CC220887">
<ns0:Num>SEC. 4.</ns0:Num>
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Section 40448.6 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_3B229ABC-B2C8-4ACC-8F92-C309F239EC93">
<ns0:Num>40448.6.</ns0:Num>
<ns0:LawSectionVersion id="id_9B5C64DA-E751-420D-8ED6-500917D3FE32">
<ns0:Content>
<html:p>The Legislature hereby finds and declares all of the following:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
It is necessary to increase the availability of financial assistance to small businesses that are subject to the rules and regulations of the south coast district, in order to minimize economic dislocation and adverse socioeconomic impacts.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
It is in the public interest that a portion of the funds collected by the south coast district from violators of air pollution regulations be allocated for the purpose of guaranteeing or otherwise reducing the financial risks of providing financial assistance to small businesses which face increased borrowing requirements in order to
comply with air pollution control requirements.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Public agencies and private lenders have a variety of methods available for providing financing assistance to small businesses and other employers, including taxable bonds, composite or pooled financing instruments, loan guarantees, and credit insurance, which could be utilized in combination with the penalties collected by the south coast district to expand the availability and reduce the cost of financing assistance.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The Capital Programs and Climate Financing Authority has funds set aside from previous bond issues, which could be used to guarantee the issuance of bonds or other financing for small businesses for the purchase and installation of pollution control equipment.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The Governor’s Office of Business and Economic Development, through the small business financial development corporations established pursuant to Chapter 1 (commencing with Section 14000) of Part 5 of Division 3 of Title 1 of the Corporations Code, has the ability to provide state loan guarantees and technical assistance to small businesses needing financial assistance.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
The Job Training Partnership Division of the Employment Development Department makes funds available for job training programs, including funds for dislocated workers, through the federal Job Training Partnership Act (29 U.S.C. Sec. 1501 et seq.).
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
It is the policy of the state that the Job Training Partnership Division of the Employment Development Department, in cooperation with the
districts and the state board, are encouraged to provide job training programs for workers who, as determined by the department or the local private industry council, have been laid off or dislocated as a result of actions resulting from air quality regulations.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
It is the policy of the state that the
Capital Programs and Climate Financing Authority and other state agencies implementing small business assistance programs, in cooperation with the districts and the state board, are encouraged to provide technical and financial assistance to small businesses to facilitate compliance with air quality regulations.
</html:p>
</ns0:Content>
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</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_50F027A5-C27B-4275-80AB-B9548633615D">
<ns0:Num>SEC. 5.</ns0:Num>
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Section 41503.6 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_98BC41F3-D3D1-4F7D-BE01-1BA4A27C4C69">
<ns0:Num>41503.6.</ns0:Num>
<ns0:LawSectionVersion id="id_93D32D44-6D59-4B66-A657-A3FC9457F3FA">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The Legislature finds and declares that the Capital Programs and Climate Financing Authority, working with the south coast district, has established successful programs to assist small businesses in complying with district rules and financing the purchase of pollution control equipment.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The Treasurer and the
Capital Programs and Climate Financing Authority shall work with, and provide all feasible assistance to, districts to increase opportunities for small businesses to comply with the rules and regulations of the district. That assistance may include loans, loan guarantees, and other forms of financial assistance.
</html:p>
</ns0:Content>
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</ns0:LawSection>
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<ns0:BillSection id="id_BCCBA13A-2553-4542-BA9D-57F4AD35F958">
<ns0:Num>SEC. 6.</ns0:Num>
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Section 44391.4 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_81B5CC4F-0A44-4F89-BB0B-D28D1199D553">
<ns0:Num>44391.4.</ns0:Num>
<ns0:LawSectionVersion id="id_E225427B-8C0B-4DAD-9D87-0295661880B5">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Funds made available pursuant to an appropriation from the Greenhouse Gas Reduction Fund to reduce mobile and stationary sources of criteria air pollutants or toxic air contaminants consistent with the community emissions reduction programs developed pursuant to Section 44391.2 shall be available to districts, as distributed by the state board, and shall be used for projects that complement and further the rules and regulatory requirements that the state board or districts have established or are in the process of developing to reduce or mitigate emissions from mobile or stationary sources in affected communities pursuant to Section 44391.2. The funds shall be allocated for projects that are intended to benefit
communities that the state board has selected or is considering for selection in future years pursuant to Section 44391.2.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Funds shall be allocated to projects consistent with priorities identified by the affected community in a transparent meaningful public process.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Funds shall only be allocated to projects that will provide emission reductions that are in excess of those otherwise required by law or regulation.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Projects eligible for funding include the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Projects that provide financial assistance for the purchase of cleaner technologies with a priority on zero-emission equipment either through the Community Air Protection Funds
Moyer Guidelines Supplement or in accordance with the state board’s guidelines for the Highway Safety, Traffic Reduction, Air Quality, and Port Security Bond Act of 2006 (Chapter 12.49 (commencing with Section 8879.20) of Division 1 of Title 2 of the Government Code) relative to funding amount and truck evaluation.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Zero-emission charging infrastructure projects with a priority toward infrastructure that supports medium- and heavy-duty vehicles.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A) Projects that provide financial assistance to owners of stationary sources that are not subject to the requirements adopted by the state board pursuant to subdivision (c) of Section 38562 for replacement of equipment with technologies that will result in direct emission reductions of toxic air contaminants and criteria air
pollution, including zero-emission technologies.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The state board may contract with the State Treasurer to expend funds for purposes of this paragraph through programs implemented by the State Treasurer or the
Capital Programs and Climate Financing Authority.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
In addition to subdivision (b), the state board may also fund a program developed by a district, with community input through a public process, that is consistent with actions identified in the applicable community emissions reduction program developed pursuant to Section 44391.2.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1) Notwithstanding Section 10231.5 of the Government Code, by March 1 of each year, the state board shall report to the Legislature on the use, in the prior fiscal year, of funds that are subject to this section. The report shall include all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A list of projects funded.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
An
identification of the communities designed to be benefited by the projects.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The anticipated reduction in the emissions of criteria pollutants, toxic air contaminants, and greenhouse gases resulting from the projects.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
How the projects further the relevant community emissions reduction program.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The report required by paragraph (1) may be submitted as a part of the annual report required pursuant to Section 39720.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_CB9EA445-E67A-4FB0-BD07-2857E4264147">
<ns0:Num>SEC. 7.</ns0:Num>
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Section 44500 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:LawSection id="id_12C602C7-83C7-402A-9C3D-50D1AAA2A040">
<ns0:Num>44500.</ns0:Num>
<ns0:LawSectionVersion id="id_DCF3FF98-6FCA-438D-95A2-9A31A876F032">
<ns0:Content>
<html:p>This division may be cited as the Capital Programs and Climate Financing Authority Act.</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_26E4EF57-67B7-4C86-9B90-2EB6E5BDD04B">
<ns0:Num>SEC. 8.</ns0:Num>
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Section 44501 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_F14FB41D-7E3D-4F81-B0A5-EE95E0F2ACF8">
<ns0:Num>44501.</ns0:Num>
<ns0:LawSectionVersion id="id_6D829FB5-8282-4574-B686-3FB14C3B03B0">
<ns0:Content>
<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
It is necessary and essential that the state, in cooperation with the federal government, use all practical means and measures to control, remediate, and eliminate pollution hazards to the environment, provide clean water, and enable alternative and renewable sources of energy. Industry within this state utilizes processes and facilities that have significant environmental impact. These processes and facilities need to be modified and supplemented to meet the quality standards established, and to be established, for the control and remediation of environmental pollution. Industry needs and requires new methods to finance the capital outlays
required for the devices, equipment, and facilities utilized in pollution control if they are to rapidly comply with the quality standards established by the state and federal governments, and if they are to rapidly remediate contaminated properties so that those properties can be reused for economically beneficial purposes.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The disposal of waste products by methods such as incineration and landfill pollute the environment by degrading air and water quality. In order to reduce the environmental pollution that currently occurs in connection with the disposal of waste products, there is a need to develop new and alternative processes and facilities that provide for the disposal of those waste products in ways that prevent or reduce environmental degradation. Those new and alternative processes and facilities include those that recover
resources and energy from waste products. In order to prevent further environmental degradation resulting from contamination caused by the release of waste products and hazardous materials, there is a need to encourage the remediation of that contamination of properties with the potential for economically beneficial reuse.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The alternate method of financing provided in this division is in the public interest and serves a public purpose and will promote the health, welfare, and safety of the citizens of the state.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
California is expected to undergo tremendous population growth by the addition of millions of new jobs, new residents, and new households. This constitutes more rapid growth than California experienced during the 1950s, 1960s, and 1970s, combined. As a result of
this unprecedented growth, the long-term environmental quality of the state depends, in part, on altering current growth patterns by adopting policies and programs that promote new forms of sustainable development and that will help reduce pollution and the degradation of the environment. A key element of sustainable development is infill development and the revitalization of existing communities. Sustainable development will result in the remediation of brownfields, reduce traffic and auto pollution, and help preserve open spaces. Many communities in California do not have the resources or expertise to identify and compete for state, federal, or private assistance in order to develop and implement environmentally sensitive growth policies and programs for economically struggling neighborhoods. Assisting economically distressed counties and cities to develop and implement sustainable and
environmentally sensitive growth policies and programs that increase the utilization of unproductive properties within existing communities will help reduce environmental hazards created by brownfields and traffic congestion, while aiding in the revitalization of economically struggling neighborhoods and the preservation of open space at the urban edges. The grant and loan program provided in this division is in the public interest, serves a public purpose, and will promote the health, welfare, and safety of the citizens of the state.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Real property contaminated with hazardous substances is a continuing blight on communities. Estimates suggest there are between 67,000 and 119,000 contaminated sites, commonly referred to as “brownfields,” throughout the state. Located in existing communities, many of these sites are abandoned, idle, or underutilized
due to a combination of factors, including legal liability concerns, regulatory issues, and the costs of pollution cleanup. Additionally, many of the undeveloped brownfields in the state are located within communities with depressed land values and pressing economic need, communities often characterized by a lack of capital investment. The remediation and development of brownfields is an important component of revitalizing existing communities and supporting sustainable growth patterns. While
remediation and development activities should focus on brownfield sites that, although contaminated, have the potential for economically beneficial reuse, there currently exist few, if any, sources for financing the assessment, planning, and reporting activities that are the necessary first steps toward determining whether a site has the potential for economically beneficial reuse.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
The Capital Programs and Climate Financing Authority should work in conjunction with public and private sector entities, including, but not limited to, cities, counties, school districts, redevelopment agencies, and financial institutions, to assist in financing, through loans, the cost of performing or obtaining site assessments, remedial action plans technical assistance, and reports, and where it is determined that a site has the potential
for economically beneficial reuse, the cleanup, remediation, or development of brownfield sites. The loan program provided by this division is in the public interest, serves a public purpose, and will promote the health, welfare, and safety of the citizens of the state.
</html:p>
</ns0:Content>
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</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_122E1C5D-BBC7-4E70-A3DE-D56E00415F9A">
<ns0:Num>SEC. 9.</ns0:Num>
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Section 44504 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_A77EB2E4-1C8D-40D7-8B63-3E4F7C783F82">
<ns0:Num>44504.</ns0:Num>
<ns0:LawSectionVersion id="id_D0DA92B9-4A8A-490D-91E2-949DFF219A2B">
<ns0:Content>
<html:p>“Authority” means the Capital Programs and Climate Financing Authority established pursuant to Section 44515 and any board, commission, department, or officer succeeding to the functions thereof or to whom the powers conferred upon the authority by this division shall be given by law.</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_53E9CF9E-8DCD-4757-B00A-9220AB424AD3">
<ns0:Num>SEC. 10.</ns0:Num>
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Section 44515 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_47C7820F-04A0-4C96-9DCF-E57CEBB4F37E">
<ns0:Num>44515.</ns0:Num>
<ns0:LawSectionVersion id="id_DBC2757E-A2FA-4CE3-8147-F9D9AA030551">
<ns0:Content>
<html:p>There is in the state government the Capital Programs and Climate Financing Authority. The authority constitutes a public instrumentality and a political subdivision of the State of California, and the exercise by the authority of the powers conferred by this division shall be deemed and held to be the performance of an essential public function. The authority shall consist of three members: the Director of Finance, the State Treasurer, and the State Controller.</html:p>
<html:p>The Director of Finance may designate a deputy or other official in the Department of Finance to act for him or her and represent him or her at all meetings of the authority.</html:p>
<html:p>The first meeting of the authority shall
be convened by the Director of Finance.</html:p>
</ns0:Content>
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</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_58377DB2-68A9-41FD-926F-F3CF240F0DD4">
<ns0:Num>SEC. 11.</ns0:Num>
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Section 44558 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_A5B8DD05-27D6-4441-B41C-E5D481A3137C">
<ns0:Num>44558.</ns0:Num>
<ns0:LawSectionVersion id="id_2146B0C6-3DD6-42A7-BBAD-687CD96723D7">
<ns0:Content>
<html:p>For purposes of this article:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Administration expenses” means the reasonable and necessary expenses incurred by the authority in the administration of this article, including, without limitation, the fees and costs of attorneys, consultants, and other individuals.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“Applicant” means an eligible applicant that applies to the authority for a grant pursuant to this article.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Authority” means the Capital Programs and Climate Financing
Authority.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
“Community development financial institution” means any community development financial institution certified by the federal Community Development Financial Institutions Fund under Part 1805 (commencing with Section 1805.100) of Chapter XVIII of Title 12 of the Code of Federal Regulations.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
“Disadvantaged community” means a census tract in which the median household income is less than 80 percent of the statewide or county annual median household income level, whichever is less.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
“Eligible applicant” means a community development financial institution for which all of the following applies:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The applicant shall have a
current certification pursuant to Section 1805 of Title 12 of the Code of Federal Regulations.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The applicant shall have a minimum net worth of twenty-five thousand dollars ($25,000) as indicated on its financial statements prepared in accordance with generally accepted accounting principles.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The applicant shall have made a minimum of five loans in the 12 months prior to submitting its application.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Either of the following applies:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The community development financial institution has a principal office in California, the officers of which are domiciled in California.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The
community development financial institution has a record of lending in this state, based on either of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
At least 25 percent of the community development financial institution’s loan portfolio, at the time of the application, provides financial assistance to persons or projects located in this state.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
The community development financial institution has provided financing assistance in this state totaling at least ten million dollars ($10,000,000) in the three years prior to its application.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
“Executive director” means the Executive Director of the
Capital Programs and Climate Financing Authority.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
“Fund” means the California Investment and Innovation Fund created in subdivision (b) of Section 44558.1.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
“Low-income communities” has the same meaning as defined in Section 39713 of the Health and Safety Code.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
“Lower income household” has the same meaning as defined in Section 50079.5 of the Health and Safety Code.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
“Program” means the California Investment and Innovation Program established in subdivision (a) of Section 44558.1.
</html:p>
<html:p>
(
<html:i>l</html:i>
)
<html:span class="EnSpace"/>
“Small and emerging community development financial institution” means a community
development financial institution that has less than ten million dollars ($10,000,000) in assets.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_BDE4FB66-3609-4A54-BDCB-EA4462A2C3BC">
<ns0:Num>SEC. 12.</ns0:Num>
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Section 44559.1 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_EBE3EF34-98EF-499C-A35A-DC89E512FD8C">
<ns0:Num>44559.1.</ns0:Num>
<ns0:LawSectionVersion id="id_C5BD7C46-04DC-4896-AC22-40A5624D0F3B">
<ns0:Content>
<html:p>As used in this article, unless the context requires otherwise, all of the following terms have the following meanings:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Authority” means the Capital Programs and Climate Financing Authority.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“California Capital Access Fund” means a fund created within the authority to be used for purposes of the program.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Executive director” means the Executive Director of the
Capital Programs and Climate Financing Authority.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
“Financial institution” means a federal- or state-chartered bank, savings association, credit union, not-for-profit community development financial institution certified under Part 1805 (commencing with Section 1805.100) of Chapter XVIII of Title 12 of the Code of Federal Regulations, or a consortium of these entities. A consortium of those entities may include a nonfinancial corporation, if the percentage of capitalization by all nonfinancial corporations in the consortium does not exceed 49 percent.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
“Financial institution” also includes a lending institution that has executed a participation agreement with the Small Business Administration under the
guaranteed loan program pursuant to Part 120 (commencing with Section 120.1) of Chapter I of Title 13 of the Code of Federal Regulations and meets the requirements of Section 120.410 of Chapter I of Title 13 of the Code of Federal Regulations, a small business investment company licensed pursuant to Part 107 (commencing with Section 107.20) of Chapter I of Title 13 of the Code of Federal Regulations, and a small business financial development corporation, as defined in Chapter 1 (commencing with Section 14000) of Part 5 of Division 3 of Title 1 of the Corporations Code, or microbusiness lender, as defined in Section 12100 of the Government Code, that meets standards that shall be established by the authority. For loans where all or part of the fees and matching contributions are paid by an entity participating in the program pursuant to subdivision (e) of Section 44559.2, “financial institution”
also includes financial lenders, as defined in Section 22009 of the Financial Code, making commercial loans, as defined in Section 22502 of the Financial Code.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A financial institution described in this paragraph shall be domiciled or have its principal office in the State of California.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Financial institution” also includes an insured depository institution, insured credit union, or community development financial institution, as these terms are defined in Section 4702 of Title 12 of the United States Code.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
“Loss reserve account” means an account in the State Treasury or any financial institution that is established and maintained by the authority for the benefit of a financial institution participating
in the Capital Access Loan Program established pursuant to this article for the purposes of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Depositing all required fees paid by the participating financial institution and the qualified business.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Depositing contributions made by the state and, if applicable, the federal government or other sources.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Covering losses on enrolled qualified loans sustained by the participating financial institution by disbursing funds accumulated in the loss reserve account.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
“Participating financial institution” means a financial institution that has been approved by the authority to enroll qualified loans in the program and has agreed to all terms and conditions
set forth in this article and as may be required by any applicable federal law providing matching funding.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
“Passive real estate ownership” means ownership of real estate for the purpose of deriving income from speculation, trade, or rental, but does not include any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The ownership of that portion of real estate being used or intended to be used for the operation of the business of the owner of the real estate.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The ownership of real estate for the purpose of construction or renovation, until the completion of the construction or renovation phase.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
“Program” means the Capital Access Loan Program created pursuant to this
article.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
“Qualified business” means a small business concern that meets both of the following criteria, regardless of whether the small business concern has operations that affect the environment:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
It is a corporation, partnership, cooperative, or other entity, whether that entity is a nonprofit entity or an entity established for profit, that is authorized to conduct business in the state.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
It has its primary business location within the boundaries of the state.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
“Qualified loan” means a loan or a portion of a loan made by a participating financial institution to a qualified business for any business activity that has its
primary economic effect in California. A qualified loan may be made in the form of a line of credit, in which case the participating financial institution shall specify the amount of the line of credit to be covered under the program, which may be equal to the maximum commitment under the line of credit or an amount that is less than that maximum commitment. A qualified loan made under the program may be made with the interest rates, fees, and other terms and conditions agreed upon by the participating financial institution and the
borrower.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Qualified loan” does not include any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A loan for the construction or purchase of residential housing.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A loan to finance passive real estate ownership.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
A loan for the refinancing of an existing loan when and to the extent that the outstanding balance is not increased.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A loan, the proceeds of which will be used in any manner that could cause the interest on any bonds previously issued by the authority to become subject to federal income tax.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
“Severely affected community”
means any area classified as an enterprise zone pursuant to the Enterprise Zone Act (Chapter 12.8 (commencing with Section 7070) of Division 7 of Title 1 of the Government Code), any area, as designated by the executive director, contiguous to the boundaries of a military base designated for closure pursuant to Section 2687 of Title 10 of the United States Code, as amended, and any other comparable economically distressed geographic area so designated by the executive director from time to time.
</html:p>
<html:p>
(l)
<html:span class="EnSpace"/>
“Small Business Assistance Fund” means a fund created within the authority pursuant to Section 44548.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
“Small business concern” has the same meaning as in Section 632 of Title 15 of the United States Code, or as otherwise provided in regulations of the
authority.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_ED3814F8-E4B7-4CD7-B5F5-1F0FFDFF2990">
<ns0:Num>SEC. 13.</ns0:Num>
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Section 44559.13 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Fragment>
<ns0:LawSection id="id_62409396-157D-4212-86C7-ECD84168D42D">
<ns0:Num>44559.13.</ns0:Num>
<ns0:LawSectionVersion id="id_0B2EE936-9004-4A1D-8369-0EBC1F0D8576">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
It is the intent of the Legislature in this act to create and fund the California Americans with Disabilities Act Small Business Capital Access Loan Program to assist small businesses in complying with the Americans with Disabilities Act. It is not the intent of the Legislature to assist the physical expansion of small businesses that includes modifications that comply with the Americans with Disabilities Act. The program shall be administered by the Capital Programs and Climate Financing Authority and follow the terms and conditions for the Capital Access Loan Program for Small Businesses in this article with the additional program requirements specified under this section.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, unless the context requires otherwise, the following words and terms shall have the following meanings:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Americans with Disabilities Act” means the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101 et seq.) and amendments thereto.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“California Americans with Disabilities Act Small Business Capital Access Loan Program Fund” or “fund” means a fund established and administered by the authority pursuant to Sections 44548 and 44549 to be used for purposes of this program.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
“Eligible cost” means and includes all or any part of the price of construction, purchase price of real or personal property, the price of
demolishing or removing any buildings or structures, the price of all machinery and equipment, the amount of financing charges and interest before, during, and for a period not to exceed the later of one year or one year following completion of construction, as determined by the authority, the price of insurance during construction, the amount of funding or financing noncapital expenses, the amount of reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements, the price of engineering, financial, and legal services and other service contracts, the price of plans, specifications, studies, surveys, estimates, administrative expenses, and any other expenses of funding or financing, that are necessary and allocable to the eligible project.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
“Eligible cost” shall not include costs not
directly related to physical alterations necessary for compliance with the Americans with Disabilities Act.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Eligible project” means the physical alterations or retrofits to an existing small business facility of less than 10,000 square feet necessary to ensure that facility is in compliance with the Americans with Disabilities Act, and the financing necessary to pay eligible costs of the project.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Qualified loan” means a loan or portion of a loan as defined in subdivision (j) of Section 44559.1, where the proceeds of the loan or portion of the loan are limited to the eligible costs for an eligible project under this program, and where the loan or portion of the loan does not exceed fifty thousand dollars ($50,000).
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
“Small business” or “qualified business” means a business that is independently owned and operated and not dominant in its field that meets both of the following additional criteria:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
It has 30 or fewer full-time equivalent employees, or it has less than five million dollars ($5,000,000) in total gross annual income from all sources.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
It does not provide overnight accommodations.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The California Americans with Disabilities Act Small Business Capital Access Loan Program Fund is established in the State Treasury for, and shall be administered by the authority pursuant to Sections 44548 and 44549 for, this program. Notwithstanding Section 13340 of the Government Code, all money
in the fund is continuously appropriated to the authority for carrying out the purposes of this section. The authority may divide the fund into separate accounts. All moneys accruing to the authority pursuant to this section from any source shall be deposited into the fund.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
All moneys in the fund derived from any source shall be held in trust for the life of this program, subject to the program expenditures and costs of administering this section, as follows:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Program expenditures shall include all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Contributions paid by the authority in support of qualified loans.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Payments made to borrowers enrolling loans to participate in
the program, to the extent that moneys other than the initial appropriation are deposited into the fund by the authority and are authorized for that use pursuant to paragraph (3) of subdivision (d).
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Reasonable costs to educate the small business community and participating lenders about the program, including travel within the state.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Administrative expenditures shall be limited to 5 percent of the initial appropriation plus 5 percent of all moneys recaptured, and shall include all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Personnel costs.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Service and vending contracts necessary to carry out the program.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Other reasonable direct and indirect administrative costs.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The authority may direct the Treasurer to invest moneys in the fund that are not required for its current needs in the eligible securities specified in Section 16430 of the Government Code as the authority shall designate. The authority may direct the Treasurer to deposit moneys in interest-bearing accounts in state or national banks or other financial institutions having principal offices located in the state. The authority may alternatively require the transfer of moneys in the fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code. All interest or other increment resulting from an investment or deposit shall be deposited into the fund,
notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, excepting the Surplus Money Investment Fund.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The authority shall adopt regulations pursuant to subdivision (c) of Section 44520 to implement the program, including provisions specific to this program as described in this section and
further including provisions to:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Establish a new loss reserve account for each participating lender enrolling loans in this program.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Obtain a certification from each participating lender and small business upon enrollment of a qualified loan that the proceeds of the loan will be used for the eligible costs of an eligible project.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Contribute an additional incentive from the fund for each loan enrolled for a qualified business located in a severely affected community, or make nonreimbursable payments from other moneys to participating borrowers to offset all or a portion of the reasonable costs of architectural inspections obtained from a person who is certified as an access specialist pursuant to the
program described in Section 4459.5 of the Government Code.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Restrict the enrollment of a qualified loan in any other Capital Access Loan Program for small business offered by the authority as long as funds are available for this program.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Limit the term of loss coverage for each qualified loan to no more than five years.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Recapture from the loss reserve account the authority’s contribution for each enrolled loan upon the maturation of such loan or after five years from the date of enrollment, whichever happens first, to be deposited in the fund and applied to future program and administrative expenditures.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_BAA10DDD-8059-40E2-8D77-35DED92B64C7">
<ns0:Num>SEC. 14.</ns0:Num>
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Section 44559.14 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_8022D530-0953-4798-9722-5910681FEDAD">
<ns0:Num>44559.14.</ns0:Num>
<ns0:LawSectionVersion id="id_EBDE11A9-A683-457A-9E3B-4E60C00DEC1F">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
It is the intent of the Legislature in enacting the act adding this section to create and fund a program to assist residential property owners and small business owners in seismically retrofitting residences and small businesses with a priority on soft-story buildings and unreinforced brick and concrete buildings. It is not the intent of the Legislature to assist the physical expansion of small businesses and residences.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Legislature hereby establishes the California Seismic Safety Capital Access Loan Program. The program shall cover losses on qualified loans by participating lenders to qualified residential property owners or qualified small
businesses for eligible projects, as specified under this section. The program shall
be administered by the
Capital Programs and Climate Financing Authority and follow the terms and conditions for the Capital Access Loan Program in this article with the additional program requirements specified under this section.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, unless the context requires otherwise, the following words and terms shall have the following meanings:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Seismic retrofit construction” means alteration performed on or after January 1, 2017, of a qualified building or its components to substantially mitigate seismic damage. “Seismic retrofit construction” includes, but is not limited to, all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Anchoring the structure to the foundation.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Bracing cripple walls.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Bracing hot water heaters.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Installing automatic gas shutoff valves.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Repairing or reinforcing the foundation to improve the integrity of the foundation against seismic damage.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Anchoring fuel storage.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
Installing an earthquake-resistant bracing system for mobilehomes that are registered with the Department of Housing and Community Development.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
Strengthening a building’s lateral load resisting system.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Eligible costs”
means the costs paid or incurred on or after January 1, 2017, for an eligible project, including any engineering or architectural design work necessary to permit or complete the eligible project less the amount of any grant provided by a public entity for the eligible project. “Eligible costs” do not include costs paid or incurred for any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Maintenance, including abatement of deferred or inadequate maintenance, and correction of violations unrelated to the seismic retrofit construction.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Repair, including repair of earthquake damage.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Seismic retrofit construction required by local building codes as a result of addition, repair, building relocation, or change of use or occupancy.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Other work or improvement required by local building or planning codes as a result of the intended seismic retrofit construction.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Rent reductions or other associated compensation, compliance actions, or other related coordination involving the qualified residential property owner or qualified small business and any other party, including a tenant, insurer, or lender.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
Replacement of existing building components, including equipment, except as needed to complete the seismic retrofit construction.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
Bracing or securing nonpermanent building contents.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
The offset of costs,
reimbursements, or other costs transferred from the qualified residential property owner or qualified small business to others.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Eligible project” means seismic retrofit construction that is necessary to ensure that the qualified building is capable of substantially mitigating seismic damage, and the financing necessary to pay eligible costs of the project.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Qualified building” means a residential or commercial building that is identified by the local building code official for the jurisdiction in which the building is located as a building in need of seismic retrofitting and is either a building of a type that is potentially vulnerable in the event of a catastrophic earthquake or a building constructed before 1981.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Qualified loan” means a loan or portion of a loan as defined in subdivision (j) of Section 44559.1, where the proceeds of the loan or portion of the loan are limited to the eligible costs for an eligible project under this program, and where the loan or portion of the loan does not exceed two hundred fifty thousand dollars ($250,000).
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
“Qualified small business” means a business referred to in subdivisions (i) and (m) of Section 44559.1 that owns a qualified building regardless of owner occupancy, notwithstanding the restriction on passive real estate ownership in subparagraph (B) of paragraph (2) of subdivision (j) of Section 44559.1.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
“Qualified residential property owner” means either an owner of a residential building that is a qualified building or a
qualified small business that owns one or more residential buildings, including a multiunit housing building, that is a qualified building, notwithstanding the restriction on passive real estate ownership in subparagraph (B) of paragraph (2) of subdivision (j) of Section 44559.1.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The California Seismic Safety Capital Access Loan Program Fund is established in the State Treasury and shall be administered by the authority pursuant to Sections 44548 and 44549 for this program. For purposes of this section, the references in Sections 44548 and 44549 to “small business” shall include “qualified residential property owner,” as defined in this section. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the authority for carrying out this section. The
authority may divide the fund into separate accounts. All moneys accruing to the authority pursuant to this section from any source shall be deposited into the fund.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
All moneys in the fund derived from any source shall be held in trust for the life of this program, for program expenditures and costs of administering this section, as follows:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Program expenditures shall include both of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Contributions paid by the authority in support of qualified loans.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Costs for a qualified expert to validate that the proceeds of the loans are eligible costs, as defined under this section.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Reasonable costs to educate the small business community, residential property owners, and participating lenders about the program, including travel within the state.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Administrative expenditures shall be limited to 5 percent of the initial appropriation plus 5 percent of all moneys recaptured, and shall include all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Personnel costs.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Service and vending contracts, other than program expenditures described in subparagraph (A), that are necessary to carry out the program.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Other reasonable direct and indirect administrative costs.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The authority may
direct the Treasurer to invest moneys in the fund that are not required for its current needs in the eligible securities specified in Section 16430 of the Government Code as the authority shall designate. The authority may direct the Treasurer to deposit moneys in interest-bearing accounts in state or national banks or other financial institutions having principal offices located in the state. The authority may alternatively require the transfer of moneys in the fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code. All interest or other increment resulting from an investment or deposit shall be deposited into the fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provision of
Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, excepting the Surplus Money Investment Fund.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The authority shall adopt regulations pursuant to Section 44520 to implement the program, including, but not limited to, provisions to:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Establish a new loss reserve account for each participating lender enrolling loans in this program.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Obtain a certification from each participating lender and qualified small business or qualified residential property owner upon enrollment of a qualified loan that the proceeds of the loan will be used for the eligible costs of an eligible project.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Contribute an additional incentive
from the fund for each loan enrolled for a qualified small business or qualified residential property owner located in a severely affected community.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Restrict the enrollment of a qualified loan in any other Capital Access Loan Program for a qualified small business or qualified residential property owner offered by the authority as long as funds are available for this program.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Limit the term of loss coverage for each qualified loan to no more than 10 years.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
Recapture from the loss reserve account the authority’s contribution for each enrolled loan upon the maturation of that loan or after 10 years from the date of enrollment, whichever happens first, to be deposited in the fund and applied to future program
and administrative expenditures.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The authority may adopt regulations relating to residential property owner or small business financing as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of that Chapter 3.5, including Section 11349.6 of the Government Code, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. The regulations shall be repealed 180 days after their effective date, unless the adopting authority or agency complies with that Chapter 3.5.
</html:p>
</ns0:Content>
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</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_EB61CA64-E774-49F3-8C53-A19C95E3575F">
<ns0:Num>SEC. 15.</ns0:Num>
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Section 53545.14 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_C9DA534A-B16A-4BB0-908E-38A5CEC6884B">
<ns0:Num>53545.14.</ns0:Num>
<ns0:LawSectionVersion id="id_21512556-04DD-4814-954D-11087997CA03">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Upon appropriation of funds by the Legislature for purposes of implementing paragraph (2) of subdivision (b) of Section 53545, the Capital Programs and Climate Financing Authority, in consultation with the Department of Housing and Community Development, shall administer loans or grants under the California Recycle Underutilized Sites (CALReUSE) program established under Article 9 (commencing with Section 8090) of Division 11 of Title 4 of the California Code of Regulations, for the purpose of brownfield cleanup that promotes infill residential and mixed-used development, consistent with regional and local land use plans.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For each fiscal year covering the duration
of the program, the authority shall include within its report to the Legislature, pursuant to Section 44525.7, information on its activities relating to the program. At a minimum, the report shall include a summary of the projects that receive loans or grants pursuant to this section for each fiscal year loans or grants are awarded. The report shall include the description, location and estimation of completion for each recipient project. The report shall also include an update on the status of each project and the number of infill housing units facilitated by the program.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_63BC0514-6704-4B2B-92A5-DFD992430C2F">
<ns0:Num>SEC. 16.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:PRC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'12.1.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'7.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'14584.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
Section 14584 of the
<ns0:DocName>Public Resources Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_1539C7D5-0D2E-4612-8702-7C72755C32F1">
<ns0:Num>14584.</ns0:Num>
<ns0:LawSectionVersion id="id_7623AA61-06F1-463C-AE3C-D3AA4DB66612">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
Operators of reverse vending machines or processors may apply to the Capital Programs and Climate Financing Authority for financing pursuant to Section 44526 of the Health and Safety Code, as a means of obtaining capital for establishment of a convenience network. For purposes of Section 44508 of the Health and Safety Code, “project” includes the establishing of a recycling location pursuant to the division.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Corporations, companies, or individuals may apply for loan and grant funds from the Energy Technologies Research,
Development, and Demonstration Account specified in Section 25683 by applying to the State Energy Resources Conservation and Development Commission for the purpose of demonstrating equipment for enhancing recycling opportunities.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_5B8213B5-9AE8-4D72-8A0F-FA869413A34D">
<ns0:Num>SEC. 17.</ns0:Num>
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Section 42652.5 of the
<ns0:DocName>Public Resources Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_9296DB61-54BE-4E33-9202-465D97577B93">
<ns0:Num>42652.5.</ns0:Num>
<ns0:LawSectionVersion id="id_AF3FCF07-108A-47E5-92D2-FC8C9B5E9CA7">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The department, in consultation with the State Air Resources Board, shall adopt regulations to achieve the organic waste reduction goals for 2020 and 2025 established in Section 39730.6 of the Health and Safety Code. The regulations shall comply with all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
May require local jurisdictions to impose requirements on generators or other relevant entities within their jurisdiction and may authorize local jurisdictions to impose penalties on generators for noncompliance.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Shall include requirements intended to meet the goal that not less than 20 percent of edible food that is
currently disposed of is recovered for human consumption by 2025.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The department shall evaluate ways to maximize the local benefits of edible food recovery programs, and explore circumstances in which recovered food may be more suitable for use in local animal feed operations.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Shall not establish a numeric organic waste disposal limit for individual landfills.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Shall evaluate ways to incentivize carbon farming that advances healthy soils.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
May include different levels of requirements for local jurisdictions and phased timelines based upon their progress in meeting the organic waste reduction goals for 2020 and 2025 established in Section
39730.6 of the Health and Safety Code. The department shall base its determination of progress on relevant factors, including, but not limited to, reviews conducted pursuant to Section 41825, the amount of organic waste disposed compared to the 2014 level, per capita disposal rates, the review required by Section 42653, and other relevant information provided by a local jurisdiction.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
May include penalties to be imposed by the department for noncompliance. If penalties are included, they shall not exceed the amount authorized pursuant to Section 41850.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Notwithstanding any other law, administrative civil penalties for a local jurisdiction that fails to procure a quantity of recovered organic waste products that meets or exceeds its recovered organic waste
product procurement target established by the department pursuant to Section 18993.1 of Title 14 of the California Code of Regulations shall be imposed pursuant to the following schedule:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
On or after January 1, 2023, each jurisdiction shall procure a quantity of recovered organic waste products that meets or exceeds 30 percent of its recovered organic waste product procurement target.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
On or after January 1, 2024, each jurisdiction shall procure a quantity of recovered organic waste products that meets or exceeds 65 percent of its recovered organic waste product procurement target.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
On or after January 1, 2025, each jurisdiction shall procure a quantity of recovered organic waste products that meets or exceeds
100 percent of its recovered organic waste product procurement target.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Shall take effect on or after January 1, 2022, except the imposition of penalties pursuant to paragraph (1) shall not take effect until two years after the effective date of the regulations.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
For purposes of determining a jurisdiction’s recovered organic waste procurement target pursuant to Section 18993.1 of Title 14 of the California Code of Regulations, the jurisdiction’s population shall not include the number of residents included in low population or elevation waivers granted by the department pursuant to Section 18984.12 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
Recognizing the continued economic and logistical challenges
of organic waste recycling and procurement in rural jurisdictions, a jurisdiction in possession of a rural exemption pursuant to subdivision (c) of Section 18984.12 of Title 14 of the California Code of Regulations, as that section read on January 1, 2024, shall remain exempt from complying with the organic waste collection services requirements specified in Article 3 (commencing with Section 18984) of, and the procurement
requirements specified in Article 12 (commencing with Section 18993.1) of, Chapter 12 of Division 7 of Title 14 of the California Code of Regulations until January 1, 2037. The department shall adopt regulations to establish a process to renew the exemptions after that date for periods of up to five years.
</html:p>
<html:p>
(10)
<html:span class="EnSpace"/>
Specify that bear bins are not required to comply with the lid color requirements established by Chapter 12 (commencing with Section 18981.1) of Division 7 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(11)
<html:span class="EnSpace"/>
The department may, in its discretion, create an adjusted recovered organic waste product procurement target schedule, not to exceed the requirements of the schedule set forth in this subdivision, which shall be exempt from the Administrative Procedure
Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
A local jurisdiction may charge and collect fees to recover the local jurisdiction’s costs incurred in complying with the regulations adopted pursuant to this section.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A local jurisdiction facing continuing violations of the regulations adopted pursuant to subdivision (a) that commence during the 2022 calendar year may submit to the department a notification of intent to comply, as described in this section. Upon approval by the department, and implementation by the local jurisdiction, of a notification of intent to comply that meets the requirements of subdivision (e), a local jurisdiction may be eligible for both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Administrative civil penalty relief for the 2022 calendar year pursuant to subdivision (d).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A corrective action plan pursuant to Section 18996.2 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For violations of the regulations that are disclosed in a notification of intent to comply that is approved by the department as meeting the requirements of subdivision (e), the department shall waive administrative civil penalties under paragraph (6) of subdivision (a) during the 2022 calendar year if, and administrative civil penalties shall not accrue under paragraph (6) of subdivision (a) during the 2022 calendar year if, the local jurisdiction implements the proposed actions according to the
schedule proposed pursuant to paragraph (4) of subdivision (e).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
For violations that commence during the 2022 calendar year and continue into the 2023 calendar year, administrative civil penalties may begin accruing as of January 1, 2023. Those administrative civil penalties accruing on and after January 1, 2023, shall be waived upon complete compliance with the terms of a corrective action plan pursuant to Section 18996.2 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
If a local jurisdiction fails to adhere to the proposed actions and schedule described in a notification of intent to comply pursuant to paragraph (4) of subdivision (e), the department may revoke its approval of the notification of intent to comply and impose administrative civil penalties for
violations occurring during the 2022 calendar year retroactive to the date of violation.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Notwithstanding any proposed actions and schedule provided by a local jurisdiction in an approved notification of intent to comply pursuant to paragraph (4) of subdivision (e), the department may instead address through a corrective action plan any violations disclosed in that notification that may take more than 180 days to correct. Under those circumstances, the proposed actions and schedule provided pursuant to an approved notification of intent to comply pursuant to paragraph (4) of subdivision (e) shall control until a corrective action plan is finalized.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The department shall approve a notification of intent to comply if the department determines the notification meets the requirements
of this subdivision. A notification of intent to comply shall be in writing, adopted by formal resolution by the governing body of the local jurisdiction, and filed with the department no later than March 1, 2022. The notification of intent to comply shall include, at a minimum, all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
A description, with specificity, of the continuing violations.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A detailed explanation of the reasons, supported by documentation, why the local jurisdiction is unable to comply.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A description of the impacts of the COVID-19 pandemic on compliance.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A description of the proposed actions the local jurisdiction will take to remedy the violations within the
timelines established in Section 18996.2 of Title 14 of the California Code of Regulations with a proposed schedule for doing so. The proposed actions shall be tailored to remedy the violations in a timely manner.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
The department shall respond in writing to a local jurisdiction within 45 business days of receiving a notification of intent to comply with an approval, disapproval, request for additional information, or timeline for a decision on approval or disapproval. If the department disapproves the notification of intent to comply due to the notification not meeting the requirements of subdivision (e), the department shall include in the response a justification for the disapproval.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
Notwithstanding Section 18996.2 of Title 14 of the California Code of
Regulations, the department may establish any maximum compliance deadline in a corrective action plan that it determines to be necessary and appropriate under the circumstances for the correction of a violation of the regulations adopted pursuant to subdivision (a).
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
A local jurisdiction may be credited for the procurement of recovered organic waste products without executing a direct service provider agreement with end users of recovered organic waste products if all of the following conditions are met:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The use of the recovered organic waste product by any entity is a result of the jurisdiction’s adoption or enforcement of ordinances, regulations, resolutions, or policies.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The jurisdiction complied with all other
recordkeeping and reporting requirements related to procurement targets, including verification, as determined by the department, that an entity is procuring on behalf of the jurisdiction.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The recovered organic waste product is not applied to the recovered organic waste product procurement target of another jurisdiction.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A local jurisdiction may count compost produced and procured from the following compost operations, as described in Section 17852 of Title 14 of the California Code of Regulations, as it read on January 1, 2024, towards its recovered organic waste procurement target:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Vermicomposting operations.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Operations composting green material, agricultural material, food material, and vegetative food material, if the total amount of feedstock and compost onsite at any one time does not exceed 100 cubic yards and 750 square feet.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Mushroom compost. “Mushroom compost” means the composted growing substrate that remains after a crop has been harvested to completion.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Paragraph (1) applies if a local jurisdiction adopts an ordinance or other enforceable mechanism requiring compost and vermicompost procured by the jurisdiction to comply with this subdivision and to be used in a manner that meets the definition of “land application” in subparagraph (A) of paragraph (24.5) of subdivision (a) of Section 17852 of Title 14 of the California Code of Regulations and
that meets the pathogen, metals, and physical contamination limits that apply to existing composting facilities.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
A local jurisdiction may count up to 10 percent of its recovered organic waste product procurement target with both of the following recovered organic waste products:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Mulch produced from tree trimming operations conducted by the jurisdiction or a service provider operating under contract to the jurisdiction when applied to landscape areas owned or managed by the jurisdiction or given away to residents, if the local jurisdiction does both of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The local jurisdiction provides documentation of the amount of mulch used and distributed, and where it was applied.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The local jurisdiction adopts an ordinance or other enforceable mechanism requiring that mulch be used in a manner that meets the definition of “land application” in subparagraph (A) of paragraph (24.5) of subdivision (a) of Section 17852 of Title 14 of the California Code of Regulations and that meets the pathogen, metals, and physical contamination limits that apply to existing composting facilities.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Edible food recovered in compliance with Section 18991.1 of Title 14 of the California Code of Regulations generated from a commercial food generator located within the jurisdiction. The conversion factor to be used to convert tonnage in the annual recovered organic waste product procurement target for each jurisdiction to equivalent amounts of recovered organic waste product shall be one ton of edible food for each ton of
organic waste in a recovered organic waste product procurement target.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Nothing in this paragraph shall be construed to limit the proportion of recovered organic waste products described in subdivision (f) of Section 18993.1 of Title 14 of the California Code of Regulations, as it read on January 1, 2024, that a jurisdiction can count toward its recovered organic waste procurement target.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
To count recovered organic waste products listed in subdivisions (i) and (j) toward its recovered organic waste product procurement target, a local jurisdiction shall comply with applicable regulations.
</html:p>
<html:p>
(l)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Subject to paragraph (2), and until December 31, 2035, the following direct
expenditures by a local jurisdiction may count towards its recovered organic waste product procurement target:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Investments for community composting operations serving the jurisdiction, including, but not limited to, an investment made
to establish or expand a compostable materials handling operation or community composting operation.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Equipment that is used only to apply compost or mulch, including, and limited to, compost spreaders, drag harrows, chippers, stump grinders, and blowers, if the jurisdiction uses the equipment to spread compost or mulch in compliance with procurement requirements during the same year that the purchase expense is applied toward its recovered organic waste product procurement target.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Development of compost or mulch distribution sites to make free compost and mulch accessible and available to residents.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The department may determine, in regulations, the appropriate conversion
factors for the direct expenditures in paragraph (1). The expenditures may count for up to 10 percent of a jurisdiction’s total procurement target.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Prior to the department’s adoption of regulations to implement this section, the conversion factor shall be twenty-one dollars and thirty-eight cents ($21.38) for each ton of organic waste in a product procurement target.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
One or more local jurisdictions within the same county may determine a local per capita procurement target using information from a local waste characterization study for a period not to exceed five years after the completion of the study. A waste characterization study shall be performed by the local jurisdiction or jurisdictions, which shall apply the results of a study to the total amount
of landfill disposal attributed to the local jurisdiction or jurisdictions by the department’s Recycling and Disposal Reporting System.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A waste characterization study may be used if it meets all of the following criteria:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
It was performed within the prior five years. This subparagraph does not require a jurisdiction to conduct a local waste characterization study within a specified five-year cycle or to wait for a recalculation of the annual recovered organic waste product procurement target pursuant to subdivision (b) of Section 18993.1 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
It includes all categories of organic waste used in the department’s most recent waste characterization study that was available
at the time the waste characterization local study was performed.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
It includes a statistically significant sampling of solid waste disposed by the local jurisdiction or jurisdictions for which the local per capita procurement target will be determined.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The geographic boundaries within which the study is conducted shall match the geographic boundaries of the jurisdiction or jurisdictions the local per capita procurement target will be applied to.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
It uses the most recent formula for the per capita procurement target developed by the department.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
The results of the study are submitted to the department in a form and manner determined by the
department.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The department may establish in regulations criteria for approving the methodology of a local waste characterization study.
</html:p>
<html:p>
(n)
<html:span class="EnSpace"/>
Commencing January 1, 2027, a local jurisdiction may procure a quantity of recovered organic waste products that meets or exceeds a five-year recovered organic waste product procurement target if the following conditions are met:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
On or before January 1, 2027, and on or before January 1 every five years thereafter, the jurisdiction’s five-year recovered organic waste procurement requirement target is calculated by multiplying the annual procurement target by five. The department may grant a jurisdiction approval to begin the five-year period on any January 1 after January 1,
2027.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
On or before January 1, 2027, the jurisdiction has notified the department that it intends to comply using a five-year target.
</html:p>
<html:p>
(o)
<html:span class="EnSpace"/>
In adopting and revising regulations to implement this section, the department may consider both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The development and adoption of a conversion factor for one ton of organic waste and one ton of compost applied locally to count towards a local jurisdiction’s organic waste procurement target.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Other pathways to prioritize local use of compost.
</html:p>
<html:p>
(p)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The department may adopt regulations it determines to be necessary to
implement and enforce the changes made to this section by Chapter 508 of the Statutes of 2021 as emergency regulations.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Emergency regulations adopted pursuant to paragraph (1) shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of these regulations is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health, safety, and general welfare. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, emergency regulations adopted by the department pursuant to paragraph (1) shall be filed with, but not be
repealed by, the Office of Administrative Law and shall remain in effect until January 1, 2024.
</html:p>
<html:p>
(q)
<html:span class="EnSpace"/>
In order to reduce emissions from solid waste facilities that may be a potential source of methane emissions, the department, in conjunction with the Capital Programs and Climate Financing Authority and the California Infrastructure and Economic Development Bank, may provide information to the owners and operators of those facilities about financing that may be available to fund facility improvements to increase the capture, or reduce the escape, of methane emissions.
</html:p>
<html:p>
(r)
<html:span class="EnSpace"/>
Consistent with the decisions in Scott v. Bd. of Equalization (1996) 50 Cal.App.4th 1597 and Schettler v. County of Santa Clara (1977) 74 Cal.App.3d 990, the free provision, or granting of incentive
payments for use, of compost or mulch by a jurisdiction constitutes a public purpose resulting in the public benefits of reducing greenhouse gas emissions, increasing soil productivity and water retention, and facilitating diversion of organic waste and so shall not be construed to be gifts of public funds in violation of Section 6 of Article XVI of the California Constitution. This subdivision does not constitute a change in, but is declaratory of, existing law.
</html:p>
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</ns0:LawSection>
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</ns0:BillSection>
<ns0:BillSection id="id_340954FE-4792-498E-A8E4-9D0EA661DA62">
<ns0:Num>SEC. 17.5.</ns0:Num>
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Section 42652.5 of the
<ns0:DocName>Public Resources Code</ns0:DocName>
is amended to read:
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<ns0:LawSection id="id_7A62952A-E79F-4DDE-9AFC-111C200E3A42">
<ns0:Num>42652.5.</ns0:Num>
<ns0:LawSectionVersion id="id_C5017F51-1B7D-4B50-8C9E-A86EA7DB2163">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The department, in consultation with the State Air Resources Board, shall adopt regulations to achieve the organic waste reduction goals for 2020 and 2025 established in Section 39730.6 of the Health and Safety Code. The regulations shall comply with all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
May require local jurisdictions to impose requirements on generators or other relevant entities within their jurisdiction and may authorize local jurisdictions to impose penalties on generators for noncompliance.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
Shall include requirements intended to meet the goal that not less than 20 percent of edible food that is currently disposed of is recovered for human consumption by 2025.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The department shall evaluate ways to maximize the local benefits of edible food recovery programs, and explore circumstances in which recovered food may be more suitable for use in local animal feed operations.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Shall not establish a numeric organic waste disposal limit for individual landfills.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Shall evaluate ways to incentivize carbon farming that advances healthy soils.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
May include different levels of requirements for local jurisdictions and phased timelines based upon their progress in meeting the organic waste reduction goals for 2020 and 2025 established in Section 39730.6 of the Health and Safety Code. The department shall base its determination of progress on relevant factors, including, but not limited to, reviews conducted
pursuant to Section 41825, the amount of organic waste disposed compared to the 2014 level, per capita disposal rates, the review required by Section 42653, and other relevant information provided by a local jurisdiction.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
May include penalties to be imposed by the department for noncompliance. If penalties are included, they shall not exceed the amount authorized pursuant to Section 41850.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Notwithstanding any other law, administrative civil penalties for a local jurisdiction that fails to procure a quantity of recovered organic waste products that meets or exceeds its recovered organic waste product procurement target established by the department pursuant to Section 18993.1 of Title 14 of the California Code of Regulations shall be imposed pursuant to the following schedule:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
On
or after January 1, 2023, each jurisdiction shall procure a quantity of recovered organic waste products that meets or exceeds 30 percent of its recovered organic waste product procurement target.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
On or after January 1, 2024, each jurisdiction shall procure a quantity of recovered organic waste products that meets or exceeds 65 percent of its recovered organic waste product procurement target.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
On or after January 1, 2025, each jurisdiction shall procure a quantity of recovered organic waste products that meets or exceeds 100 percent of its recovered organic waste product procurement target.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
Shall take effect on or after January 1, 2022, except the imposition of penalties pursuant to paragraph (1) shall not take effect until two years after the effective date of the regulations.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
For purposes of determining a jurisdiction’s recovered organic waste procurement target pursuant to Section 18993.1 of Title 14 of the California Code of Regulations, the jurisdiction’s population shall not include the number of residents included in low population or elevation waivers granted by the department pursuant to Section 18984.12 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
Recognizing the continued economic and logistical challenges of organic waste recycling and procurement in rural jurisdictions, a jurisdiction in possession of a rural exemption pursuant to subdivision (c) of Section 18984.12 of Title 14 of the California Code of Regulations, as that section read on January 1, 2024, shall remain exempt from complying with the organic waste collection services requirements specified in Article 3 (commencing with Section 18984) of, and the procurement
requirements specified in Article 12 (commencing with Section 18993.1) of, Chapter 12 of Division 7 of Title 14 of the California Code of Regulations until January 1, 2037. The department shall adopt regulations to establish a process to renew the exemptions after that date for periods of up to five years.
</html:p>
<html:p>
(10)
<html:span class="EnSpace"/>
Specify that bear bins are not required to comply with the lid color requirements established by Chapter 12 (commencing with Section 18981.1) of Division 7 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(11)
<html:span class="EnSpace"/>
The department may, in its discretion, create an adjusted recovered organic waste product procurement target schedule, not to exceed the requirements of the schedule set forth in this subdivision, which shall be exempt from the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
</html:p>
<html:p>
(12)
<html:span class="EnSpace"/>
No later than January 1, 2027, the department shall amend subdivision (f) of Section 18993.1 of Title 14 of the California Code of Regulations to include in the recovered organic waste products that a jurisdiction may procure to comply with Article 12 (commencing with Section 18993.1) of Chapter 12 of Division 7 of Title 14 of the California Code of Regulations pipeline biomethane converted exclusively from organic waste that is diverted from a landfill pursuant to Section 39730.6 of the Health and Safety Code and is consistent with Article 10 (commencing with Section 650) of Chapter 3 of Part 1 of Division 1 of the Public Utilities Code.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
A local jurisdiction may charge and collect fees to recover the local jurisdiction’s costs incurred in complying with the regulations adopted pursuant to this section.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A local jurisdiction facing continuing violations of the regulations adopted pursuant to subdivision (a) that commence during the 2022 calendar year may submit to the department a notification of intent to comply, as described in this section. Upon approval by the department, and implementation by the local jurisdiction, of a notification of intent to comply that meets the requirements of subdivision (e), a local jurisdiction may be eligible for both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Administrative civil penalty relief for the 2022 calendar year pursuant to subdivision (d).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A corrective action plan pursuant to Section 18996.2 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For violations of the regulations that are disclosed in a
notification of intent to comply that is approved by the department as meeting the requirements of subdivision (e), the department shall waive administrative civil penalties under paragraph (6) of subdivision (a) during the 2022 calendar year if, and administrative civil penalties shall not accrue under paragraph (6) of subdivision (a) during the 2022 calendar year if, the local jurisdiction implements the proposed actions according to the schedule proposed pursuant to paragraph (4) of subdivision (e).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
For violations that commence during the 2022 calendar year and continue into the 2023 calendar year, administrative civil penalties may begin accruing as of January 1, 2023. Those administrative civil penalties accruing on and after January 1, 2023, shall be waived upon complete compliance with the terms of a corrective action plan pursuant to Section 18996.2 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
If a local jurisdiction fails to adhere to the proposed actions and schedule described in a notification of intent to comply pursuant to paragraph (4) of subdivision (e), the department may revoke its approval of the notification of intent to comply and impose administrative civil penalties for violations occurring during the 2022 calendar year retroactive to the date of violation.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Notwithstanding any proposed actions and schedule provided by a local jurisdiction in an approved notification of intent to comply pursuant to paragraph (4) of subdivision (e), the department may instead address through a corrective action plan any violations disclosed in that notification that may take more than 180 days to correct. Under those circumstances, the proposed actions and schedule provided pursuant to an approved notification of intent to comply pursuant to paragraph (4) of subdivision
(e) shall control until a corrective action plan is finalized.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The department shall approve a notification of intent to comply if the department determines the notification meets the requirements of this subdivision. A notification of intent to comply shall be in writing, adopted by formal resolution by the governing body of the local jurisdiction, and filed with the department no later than March 1, 2022. The notification of intent to comply shall include, at a minimum, all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
A description, with specificity, of the continuing violations.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A detailed explanation of the reasons, supported by documentation, why the local jurisdiction is unable to comply.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
A description of the impacts of the COVID-19 pandemic on
compliance.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A description of the proposed actions the local jurisdiction will take to remedy the violations within the timelines established in Section 18996.2 of Title 14 of the California Code of Regulations with a proposed schedule for doing so. The proposed actions shall be tailored to remedy the violations in a timely manner.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
The department shall respond in writing to a local jurisdiction within 45 business days of receiving a notification of intent to comply with an approval, disapproval, request for additional information, or timeline for a decision on approval or disapproval. If the department disapproves the notification of intent to comply due to the notification not meeting the requirements of subdivision (e), the department shall include in the response a justification for the disapproval.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
Notwithstanding Section 18996.2 of Title 14 of the California Code of Regulations, the department may establish any maximum compliance deadline in a corrective action plan that it determines to be necessary and appropriate under the circumstances for the correction of a violation of the regulations adopted pursuant to subdivision (a).
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
A local jurisdiction may be credited for the procurement of recovered organic waste products without executing a direct service provider agreement with end users of recovered organic waste products if all of the following conditions are met:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The use of the recovered organic waste product by any entity is a result of the jurisdiction’s adoption or enforcement of ordinances, regulations, resolutions, or policies.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The jurisdiction complied with all other
recordkeeping and reporting requirements related to procurement targets, including verification, as determined by the department, that an entity is procuring on behalf of the jurisdiction.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The recovered organic waste product is not applied to the recovered organic waste product procurement target of another jurisdiction.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A local jurisdiction may count compost produced and procured from the following compost operations, as described in Section 17852 of Title 14 of the California Code of Regulations, as it read on January 1, 2024, towards its recovered organic waste procurement target:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Vermicomposting operations.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Operations composting green material, agricultural material, food material, and vegetative food
material, if the total amount of feedstock and compost onsite at any one time does not exceed 100 cubic yards and 750 square feet.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Mushroom compost. “Mushroom compost” means the composted growing substrate that remains after a crop has been harvested to completion.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Paragraph (1) applies if a local jurisdiction adopts an ordinance or other enforceable mechanism requiring compost and vermicompost procured by the jurisdiction to comply with this subdivision and to be used in a manner that meets the definition of “land application” in subparagraph (A) of paragraph (24.5) of subdivision (a) of Section 17852 of Title 14 of the California Code of Regulations and that meets the pathogen, metals, and physical contamination limits that apply to existing composting facilities.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
A local jurisdiction may count up to 10
percent of its recovered organic waste product procurement target with both of the following recovered organic waste products:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Mulch produced from tree trimming operations conducted by the jurisdiction or a service provider operating under contract to the jurisdiction when applied to landscape areas owned or managed by the jurisdiction or given away to residents, if the local jurisdiction does both of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The local jurisdiction provides documentation of the amount of mulch used and distributed, and where it was applied.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The local jurisdiction adopts an ordinance or other enforceable mechanism requiring that mulch be used in a manner that meets the definition of “land application” in subparagraph (A) of paragraph (24.5) of subdivision (a) of Section 17852 of Title 14 of the California Code of
Regulations and that meets the pathogen, metals, and physical contamination limits that apply to existing composting facilities.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Edible food recovered in compliance with Section 18991.1 of Title 14 of the California Code of Regulations generated from a commercial food generator located within the jurisdiction. The conversion factor to be used to convert tonnage in the annual recovered organic waste product procurement target for each jurisdiction to equivalent amounts of recovered organic waste product shall be one ton of edible food for each ton of organic waste in a recovered organic waste product procurement target.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Nothing in this paragraph shall be construed to limit the proportion of recovered organic waste products described in subdivision (f) of Section 18993.1 of Title 14 of the California Code of Regulations, as it read on January 1, 2024, that a jurisdiction can
count toward its recovered organic waste procurement target.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
To count recovered organic waste products listed in subdivisions (i) and (j) toward its recovered organic waste product procurement target, a local jurisdiction shall comply with applicable regulations.
</html:p>
<html:p>
(l)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Subject to paragraph (2), and until December 31, 2035, the following direct expenditures by a local jurisdiction may count towards its recovered organic waste product procurement target:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Investments for community composting operations serving the jurisdiction, including, but not limited to, an investment made to establish or expand a compostable materials handling operation or community composting operation.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Equipment that is used only to apply compost
or mulch, including, and limited to, compost spreaders, drag harrows, chippers, stump grinders, and blowers, if the jurisdiction uses the equipment to spread compost or mulch in compliance with procurement requirements during the same year that the purchase expense is applied toward its recovered organic waste product procurement target.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Development of compost or mulch distribution sites to make free compost and mulch accessible and available to residents.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The department may determine, in regulations, the appropriate conversion factors for the direct expenditures in paragraph (1). The expenditures may count for up to 10 percent of a jurisdiction’s total procurement target.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Prior to the department’s adoption of regulations to implement this section, the conversion factor shall be
twenty-one dollars and thirty-eight cents ($21.38) for each ton of organic waste in a product procurement target.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
One or more local jurisdictions within the same county may determine a local per capita procurement target using information from a local waste characterization study for a period not to exceed five years after the completion of the study. A waste characterization study shall be performed by the local jurisdiction or jurisdictions, which shall apply the results of a study to the total amount of landfill disposal attributed to the local jurisdiction or jurisdictions by the department’s Recycling and Disposal Reporting System.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
A waste characterization study may be used if it meets all of the following criteria:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
It was performed within the prior five years. This
subparagraph does not require a jurisdiction to conduct a local waste characterization study within a specified five-year cycle or to wait for a recalculation of the annual recovered organic waste product procurement target pursuant to subdivision (b) of Section 18993.1 of Title 14 of the California Code of Regulations.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
It includes all categories of organic waste used in the department’s most recent waste characterization study that was available at the time the waste characterization local study was performed.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
It includes a statistically significant sampling of solid waste disposed by the local jurisdiction or jurisdictions for which the local per capita procurement target will be determined.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The geographic boundaries within which the study is conducted shall match the geographic boundaries of the
jurisdiction or jurisdictions the local per capita procurement target will be applied to.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
It uses the most recent formula for the per capita procurement target developed by the department.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
The results of the study are submitted to the department in a form and manner determined by the department.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The department may establish in regulations criteria for approving the methodology of a local waste characterization study.
</html:p>
<html:p>
(n)
<html:span class="EnSpace"/>
Commencing January 1, 2027, a local jurisdiction may procure a quantity of recovered organic waste products that meets or exceeds a five-year recovered organic waste product procurement target if the following conditions are met:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
On or before January 1,
2027, and on or before January 1 every five years thereafter, the jurisdiction’s five-year recovered organic waste procurement requirement target is calculated by multiplying the annual procurement target by five. The department may grant a jurisdiction approval to begin the five-year period on any January 1 after January 1, 2027.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
On or before January 1, 2027, the jurisdiction has notified the department that it intends to comply using a five-year target.
</html:p>
<html:p>
(o)
<html:span class="EnSpace"/>
In adopting and revising regulations to implement this section, the department may consider both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The development and adoption of a conversion factor for one ton of organic waste and one ton of compost applied locally to count towards a local jurisdiction’s organic waste procurement target.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Other pathways to prioritize local use of compost.
</html:p>
<html:p>
(p)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The department may adopt regulations it determines to be necessary to implement and enforce the changes made to this section by Chapter 508 of the Statutes of 2021 as emergency regulations.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Emergency regulations adopted pursuant to paragraph (1) shall be adopted in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and for purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of these regulations is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health, safety, and general welfare. Notwithstanding Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code, emergency regulations adopted by the department pursuant to paragraph (1) shall be filed with, but not be repealed by, the Office of Administrative Law and shall remain in effect until January 1, 2024.
</html:p>
<html:p>
(q)
<html:span class="EnSpace"/>
In order to reduce emissions from solid waste facilities that may be a potential source of methane emissions, the department, in conjunction with the
Capital Programs and Climate Financing Authority and the California Infrastructure and Economic Development Bank, may provide information to the owners and operators of those facilities about financing that may be available to fund facility improvements to increase the capture, or reduce the escape, of methane emissions.
</html:p>
<html:p>
(r)
<html:span class="EnSpace"/>
Consistent with the decisions in Scott v. Bd. of Equalization (1996) 50 Cal.App.4th 1597 and Schettler v. County of Santa Clara (1977) 74 Cal.App.3d 990, the free provision, or granting of incentive payments for use, of compost or mulch by a jurisdiction constitutes a public purpose resulting in the public benefits of reducing greenhouse gas emissions, increasing soil productivity and water retention, and facilitating diversion of organic waste and so shall not be construed to be gifts of public funds in violation of Section 6 of Article XVI of the California Constitution. This
subdivision does not constitute a change in, but is declaratory of, existing law.
</html:p>
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<ns0:Num>SEC. 18.</ns0:Num>
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Section 201.5 of the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
is amended to read:
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<ns0:Num>201.5.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
Possessory interests in property acquired by or for the Capital Programs and Climate Financing Authority pursuant to Division 27 (commencing with Section 44500) of the Health and Safety Code, whether in real or personal property, shall be subject to taxation under this code.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
If the amount determined pursuant to subdivision (a) is less than the amount of tax which would have been imposed if the participating party owned the pollution control facility, the contract or lease between the
Capital Programs and Climate Financing Authority and such party shall provide that the difference between the amount of tax paid pursuant to subdivision (a) and the amount determined on the basis of the full cash value of the property shall be paid by such party to the tax collector for the taxing agency at the same time as the property tax is paid.
</html:p>
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<ns0:Num>SEC. 19.</ns0:Num>
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Section 6010.10 of the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
is amended to read:
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<ns0:Num>6010.10.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
“Sale” and “purchase,” for the purposes of this part, do not include any transfer of title of tangible personal property constituting any project or pollution control facility to the Capital Programs and Climate Financing Authority by any participating party, nor any lease or transfer of title of tangible personal property constituting any project or pollution control facility by the authority to any participating party, when the transfer or lease is made pursuant to Division 27 (commencing with Section 44500) of the Health and Safety Code. The terms “project,” “pollution control
facility,” and “participating party” as used in this section have the meanings ascribed to them in Sections 44506 and 44508 of the Health and Safety Code.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
This section shall only apply to a project or pollution control facility that is a “project” or “pollution control facility” as defined in Section 44508 of the Health and Safety Code as amended by Chapter 756 of the Statutes of 1999.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
This section shall not apply to a project for which the authority refunds bonds or evidences of indebtedness not originally issued by the authority, and the authority makes a finding that the project being refinanced qualifies as a project under Division 27 (commencing with Section 44500) of the Health and Safety Code.
</html:p>
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<ns0:BillSection id="id_ADD77C8F-DF38-4592-8AB0-7FCACB450A79">
<ns0:Num>SEC. 20.</ns0:Num>
<ns0:Content>
<html:p>Section 17.5 of this bill incorporates amendments to Section 42652.5 of the Public Resources Code proposed by both this bill and Assembly Bill 70. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) each bill amends Section 42652.5 of the Public Resources Code, and (3) this bill is enacted after Assembly Bill 70, in which case Section 17 of this bill shall not become operative.</html:p>
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