BILL NUMBER: AB 1105INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Blakeslee FEBRUARY 27, 2009 An act to add Chapter 5.6 (commencing with Section 25460) to Division 15 of the Public Resources Code, relating to energy, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 1105, as introduced, Blakeslee. Energy: Building Energy Retrofit Revolving Loan Program. (1) Existing law establishes various grant, loan, and loan guarantee programs that are administered by the State Energy Resources Conservation and Development Commission to provide assistance to private and public entities to maximize energy use savings in existing and planned buildings and facilities. This bill would require the commission to implement the Building Energy Retrofit Revolving Loan Program to provide loans for energy conservation projects retrofitting nonresidential buildings built before July 1, 1978. The bill would create the Building Energy Retrofit Revolving Loan Program Fund in the State Treasury that would be continuously appropriated to the commission for the implementation of the program, thereby making an appropriation. The bill would require that moneys from the federal American Recovery and Reinvestment Act of 2009 that are appropriated to the commission be transferred to the fund as authorized by federal law. Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Chapter 5.6 (commencing with Section 25460) is added to Division 15 of the Public Resources Code, to read: CHAPTER 5.6. BUILDING ENERGY RETROFIT REVOLVING LOAN 25460. As used in this chapter, the following terms shall have the following meanings: (a) "Allocation" means a loan of funds by the commission pursuant to the procedures specified in this chapter. (b) "Eligible building" means a nonresidential building built prior to July 1, 1978. (c) "Energy conservation measure" means an installation or modification of an installation in a building that is primarily intended to retrofit the building to meet the standards established pursuant to Section 25402. (d) "Energy conservation project" means an undertaking to acquire and to install one or more energy conservation measures in a building 25460.1. The commission shall implement a Building Energy Retrofit Revolving Loan Program to provide a source of funding for an owner of an eligible building to implement energy conservation measures. 25460.2. (a) The Building Energy Retrofit Revolving Loan Fund is hereby created in the State Treasury and shall be administered by the commission. Notwithstanding Section 13350 of the Government Code, moneys from the fund shall be continuously appropriated to the commission for the purposes of this chapter. (b) Any moneys or portion of moneys received from the federal government and appropriated to the commission for purposes of the federal American Recovery and Reinvestment Act of 2009 shall be deposited into the fund. (c) The moneys from any loan repayment and fees, including, but not limited to, principal and interest repayments, fees and points, recovery of collection costs, income earned on any asset recovered pursuant to a loan default, and money collected through foreclosure actions, shall be deposited into the fund. (d) All interest accruing on interest payments from loan applicants shall be deposited into the fund. (e) The commission may set aside moneys in the fund for the purposes of paying costs necessary to protect the state's position as a lender-creditor. These costs shall be broadly construed to include, but not be limited to, foreclosure expenses, auction fees, title searches, appraisals, real estate brokerage fees, attorney's fees, mortgage payments, insurance payments, utility costs, repair costs, removal and storage costs of repossessed equipment and inventory, and additional expenditures to purchase a senior lien in foreclosure or bankruptcy proceedings. 25460.3. (a) An owner or operator of an eligible building to which an allocation has been made under this chapter shall repay the principal amount of the allocation, plus interest over time in accordance with terms established by the commission, but in no event may the term exceed 15 years. (b) Notwithstanding other laws, the commission shall periodically set interest rates on the allocations based on surveys of existing financial markets, unless it determines that the purpose of this chapter would be better served by establishing an alternative schedule, and shall set rates at not less than 3 percent per annum. 25460.4. The loan agreement between the commission and the owner of an eligible building shall have terms that include, but are not limited to, all of the following: (a) A description of the energy conservation project being funded by the allocation. (b) A payment schedule for the repayment of the allocation plus interest. (c) A term requiring the repayment of the allocation regardless of the success of the energy conservation project. 25460.5. (a) An allocation made by the commission shall be secured by a lien on the building in which the energy conservation measure is being implemented. (b) Upon the provision of an allocation to an owner of an eligible building, the commission shall record a lien on the building with the county recorders office of the county in which the building is located. (c) Upon the full repayment of the principal and interest, the commission shall release the lien filed pursuant to subdivision (b). 25460.6. Upon the discovery that the owner receiving an allocation pursuant to this chapter has used the allocation or portions of the allocation for purposes other than the implementation of the energy conservation project, the outstanding principal and accrued interest shall immediately be due and owed to the commission. 25460.7. The commission shall establish and collect a fee for each application for an allocation authorized by the chapter. The application fee shall be set at a level that is sufficient to fund the commission's costs of processing the applications for allocations. In addition, the commission shall establish a schedule of fees, or points for loans that are entered into by the commission, to fund the commission's administration of the program.