Bill Text: CA AB1659 | 2019-2020 | Regular Session | Amended
Bill Title: Large electrical corporations: wildfire mitigation: securitization.
Spectrum: Partisan Bill (Democrat 38-0)
Status: (Engrossed - Dead) 2020-09-01 - Ordered to inactive file by unanimous consent. [AB1659 Detail]
Download: California-2019-AB1659-Amended.html
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Amended
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August 28, 2020 |
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August 25, 2020 |
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July 11, 2019 |
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July 01, 2019 |
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May 08, 2019 |
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
Assembly Bill
No. 1659
| Introduced by Assembly Members Bloom, Mullin, Friedman, Eduardo Garcia, Irwin, Levine, Luz Rivas, Robert Rivas, and Wood (Principal coauthor: Assembly Member Aguiar-Curry) (Coauthors: Assembly Members (Principal coauthors: Senators Dodd, Hertzberg, Hurtado, Portantino, and Stern) (Coauthors: Senators Allen, Archuleta, Atkins, Beall, Bradford, Lena Gonzalez, Jackson, McGuire, |
February 22, 2019 |
An act to amend Sections 3284, 3285, 3288, and 3289 of, and to add Part 5.5 (commencing with Section 3270) to Division 1 of, the Public Utilities Code, and to amend Sections 80506, 80524, 80540, 80542, 80544, and 80550 of, and to add Section 80544.5 to, the Water Code, relating to wildfire mitigation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1659, as amended, Bloom.
Large electrical corporations: wildfire mitigation: revenue bonds. securitization.
The California Constitution establishes the Public Utilities Commission and authorizes the commission to exercise ratemaking and rulemaking authority over all public utilities, as defined, subject to control by the Legislature. The Public Utilities Act authorizes the commission to supervise and regulate every public utility, including electrical corporations, and to do all things that are necessary and convenient in the exercise of that power and jurisdiction. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. Existing law authorizes the commission, in a proceeding on an application by an electrical corporation to recover costs and expenses arising from a catastrophic wildfire occurring on or after January 1, 2019, to allow cost recovery if the costs and expenses are just and
reasonable, after consideration of the conduct of the utility, including consideration of specified factors.
Existing law establishes the Wildfire Fund to pay eligible claims arising from a covered wildfire, as provided. Existing law requires the commission to initiate a rulemaking proceeding to consider using its existing authority to require certain electrical corporations to collect a nonbypassable charge from its ratepayers to support the Wildfire Fund, and requires the commission to direct those electrical corporations to collect that charge if the commission determines that the imposition of the charge is just and reasonable and that it is an appropriate exercise of its authority, as specified.
This bill would enact the Wildfire Prevention and Community Resilience Act of 2020 and would require the Natural Resources Agency, in consultation with the commission, to adopt an interim expenditure plan and an expenditure
plan that are focused on reducing wildfire risk on the ground and in communities through activities such as defensible space implementation, home hardening, improved public safety, including expenditures to add trained emergency medical technicians to the workforce, and other authorized activities, as well as to prepare residents for wildfires through public education and outreach, as provided. The bill would establish the Wildfire Prevention and Community Resilience Fund and, upon appropriation by the Legislature, would require moneys in the fund be used for the implementation of those plans. The bill would require the Secretary of the Natural Resources Agency, upon the adoption of the interim plan, to notify the State Controller of the adoption. The bill would require, within 30 days of the notification, the transfer of $500,000,000 from the Surplus Money Investment Fund to the Wildfire Prevention and Community Resilience Fund, and would appropriate the money to the Natural Resources Agency for the
implementation of the interim expenditure plan. The bill would provide for the repayment of the moneys transferred from the Wildfire Prevention and Community Resilience Fund to the Surplus Money Investment Fund, as provided. The bill would require the commission to require large electrical corporations, as defined, to collect, on and after a specified time, a nonbypassable charge from their ratepayers, as provided, to finance the bonds issued for the support of the Wildfire Prevention and Community Resilience Fund, as described below.
Existing law, until January 1, 2003, authorizes the Department of Water Resources to enter into contracts for the purchase of electric power. Existing law authorizes the department to sell power to retail end use customers and local publicly owned electric utilities under certain circumstances. Existing law authorizes the department to issue revenue bonds and entitles the department to recover, as a revenue requirement, amounts
necessary to enable it to finance the bonds and purchase electric power pursuant to these provisions.
Existing law authorizes the department to issue Wildfire Fund bonds on and after either the date on which the department legally defeases all of its remaining bonds under the provisions described above or the date on which it pays those obligations in full at maturity, whichever is earlier, to support the Wildfire Fund. Existing law entitles the department to recover, as a revenue requirement, amounts necessary to enable it to finance the bond bonds in support of the Wildfire Fund. Existing law requires those bond proceeds and revenues received by the department to be deposited in the Department of Water Resources Charge Fund.
Existing law continuously appropriates the moneys in the Department of Water Resources Charge Fund to the department for specified purposes, including transfers to the Wildfire Fund and repayment of the bonds issued in support of the Wildfire Fund.
This bill would authorize the department to issue bonds, in an aggregate amount of up to $3,000,000,000, the repayment of which, including interest, commences on the date on which the department has paid in full, at maturity, or legally defeases all of its any outstanding bonds issued for the support of the Wildfire Fund or on January 1, 2036, whichever is earlier,
later, to support the Wildfire Prevention and Community Resilience Fund. The bill would entitle the department to recover, as a revenue requirement, amounts necessary to enable it to finance the bonds in support of the Wildfire Prevention and Community Resilience Fund. The bill would require those bond proceeds and revenues received by the department to be deposited in the Department of Water Resources Charge Fund. The bill would continuously appropriate the moneys in the Department of Water Resources Charge Fund to the department for specified purposes, including transfers to the Wildfire Prevention and Community Resilience Fund and repayment of the bonds issued for the support of the Wildfire Prevention and Community Resilience Fund.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because certain of the above provisions would be codified in the act and would require action by the commission, a violation of which would be a crime, this bill would impose a state-mandated local program.
This bill would incorporate additional changes to Section 3289 of the Public Utilities Code proposed by SB 350 to be operative only if this bill and SB 350 are enacted and this bill is enacted last.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would declare that
it is to take effect immediately as an urgency statute.
Digest Key
Vote: 2/3 Appropriation: YES Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
This act shall be known, and may be cited, as the Wildfire Prevention and Community Resilience Act of 2020.SEC. 2.
(a) The Legislature finds and declares all of the following:(1) Catastrophic and devastating wildfires have occurred repeatedly in the state in recent years. From the 2017 through the 2019 statewide fire season, over 3,000,000 acres burned in high-severity wildfires, resulting in the tragic loss of over 100 lives, and 10,000 structures were destroyed, 95 percent of which were residences, along with the economic losses of billions of dollars in damages, insurance costs, and rebuilding costs.
(2) As of August of 2020, more than 500 wildfires have been sparked by a
Pacific storm that pummeled California with more than 12,000 lightning strikes. One of the resulting fires, the LNU Complex, has already become the second largest wildfire in state history. It has taken at least 5 lives, destroyed at least 500 structures, and burned more than 300,000 acres. The combined acreage burned by these 2020 fires exceeds 771,000 acres, greater than the size of the State of Rhode Island. These fires have also inflicted substantial damage to two iconic properties of the Department of Parks and Recreation, Big Basin Redwoods State Park and Armstrong Woods State Natural Reserve.
(3) Millions of homes and about 30 percent of the state’s population live in the “wildland-urban interface,” and expansion in these areas has increased the number of people and homes likely to be affected by wildfire that we are seeing now with several hundred
fires burning in the state. Home hardening and skilled, science-based vegetation management are key to a structure’s ability to survive a wildfire and the state has a critical need to expand the workforce and create additional jobs to address these issues.
(4) California needs to continue its efforts to reduce fire risk, make the landscape more resilient to wildfire and climate change, help residents with home hardening, undertake ecosystem restoration across all vegetation types in the state, and develop the workforce to achieve and maintain these objectives over time.
(5) Studies have shown that the tragic rate of unemployment in California can be reduced by creating tens of thousands of new positions, across the entire wage spectrum, to help California reduce fire risk.
Examples include jobs to manage vegetation and restore landscapes, various skilled trades for home hardening, as well as engineering for back up energy supplies.
(b) It is the intent of the Legislature that the financing and expenditure plan provides widespread benefits to ratepayers of electrical corporations and the public in the service areas of the electrical corporation and are designed to address wildfire prevention in those service areas without unduly conferring benefits that should properly remain investments of the electrical corporations.
(c) It is the intent of the Legislature that the revenues generated pursuant to Part 5.5 (commencing with Section 3270) of Division 1 of the Public Utilities Code should help reduce the risk and frequency of blackouts. Blackouts
are a clear public safety and economic issue with widespread adverse effects, but especially so to seniors, those dependent on medical devices that require reliable electricity, and, of course, schools, businesses, hospitals, and other vital institutions. The resiliency of California’s electrical systems will be enhanced with the investments made pursuant to the authorized expenditures.
(d) It is the intent of the Legislature that the expenditures from the transfer of moneys from the Surplus Money Investment Fund to the Wildfire Prevention and Community Resilience Fund that is established pursuant to Section 3271 of the Public Utilities Code be used to address the urgent needs for worker training that can help address the wildfire emergency experienced by California during the 2020–21 fire season.
SEC. 3.
Part 5.5 (commencing with Section 3270) is added to Division 1 of the Public Utilities Code, to read:PART 5.5. Wildfire Prevention and Community Resilience
CHAPTER 1. Definitions
3270.
For purposes of this part, the following(a) “Decision 19-10-056” means commission Decision 19-10-056 (October 24, 2019) Decision Approving Imposition of a Non-Bypassable Charge to Support California’s Wildfire Fund and Adopting Rate Agreement Between the California Department of Water Resources and the California Public Utilities Commission.
(b) “Fund” means the Wildfire Prevention and Community Resilience Fund
established pursuant to Section 3271.
(c) “Large electrical corporation” means an electrical corporation with 250,000 or more customer accounts within the state or its successor.
CHAPTER 2. The Wildfire Prevention and Community Resilience Fund
3271.
There is hereby established the Wildfire Prevention and Community Resilience Fund in the State Treasury. Moneys in the fund, upon appropriation by the Legislature, shall be expended to reduce wildfire risks pursuant to this part.3272.
(a) The fund shall be initially capitalized by a loan of five hundred million dollars ($500,000,000) from the state’s Surplus Money Investment Fund.(b) (1) The loan from the Surplus Money Investment Fund is intended to provide necessary cash on a short-term basis for project funding. It is the intent of the Legislature that the loan
(2) The loan shall be repaid as quickly as possible within a the 2020–21 fiscal year. The loan shall be repaid by the proceeds of any Wildfire Prevention and Community Resilience Fund bonds as set forth in paragraph (2) of subdivision (b) of Section 80540 of the Water Code.
(c) Interest payments on outstanding loan amounts shall be calculated at the greater of the quarter-to-date yield at the one-year constant maturity United States Treasury rate for the calendar quarter concluded directly before the calculation or the Surplus Money Investment Fund rate at the time of the cash
transfer. The interest payments shall be paid on a quarterly basis from Wildfire Prevention and Community Resilience Fund assets following the cash transfer and shall continue until the loan has been fully repaid. The interest payments are interest earnings of the Surplus Money Investment Fund and shall be apportioned pursuant to Sections 16475 and 16480.6 of the Government Code.
(d) Within 30 days of the notification by the Secretary of the Natural Resources Agency pursuant to Section 3276, the transfer to the fund of the amount specified in subdivision (a) shall be made in the 2020–21 fiscal year.
(e) Nothing in this part affects the obligation of an electrical corporation to maintain line clearance tree trimming operations, as defined in Section 2700 of Title 8 of the California Code of Regulations, for electrical transmission or distribution lines. None of the funding allocated pursuant to this part shall be used for those activities.
3273.
(a) The commission shall require each large electrical corporation to impose and collect a nonbypassable charge, in the same manner as set forth in Decision 19-10-056, commencing in the month immediately following the month in which the(b) Notwithstanding Section 455.5 or 1708, or any other law, the commission shall not revise, amend, or otherwise modify a decision to impose a charge made pursuant to this section at any time prior to January 1, 2051.
CHAPTER 3. Operation of the Fund
3275.
The interim expenditure plan adopted pursuant to Section 3276 and the expenditure plan adopted pursuant to Section 3278 shall be focused on reducing wildfire risk on the ground and in communities through activities such as defensible space implementation, home hardening, improved public safety, including expenditures to add trained emergency medical technicians to the workforce, and other activities authorized pursuant to this3276.
(a) Within(b) Upon the adoption of the interim expenditure plan pursuant to this section, the Secretary of the Natural Resources Agency shall notify the State Controller of the adoption.
3277.
(a) The interim expenditure plan shall(1) Fifty million dollars ($50,000,000) to address workforce training and development for purposes of reducing wildfire risks. risks in a manner consistent with Section 3279.
(2) (A) Four hundred fifty million dollars ($450,000,000) to address urgent actions needed to reduce wildfire risks for the calendar year 2020–21, including projects to provide science-based buffers around communities that will reduce the risk of wildfire and structural hardening.
(B) Of the moneys allocated pursuant to subparagraph (A), one hundred million dollars ($100,000,000) shall be allocated for the fire prevention grants program of the Department of Forestry and Fire Protection.
(C) Of the moneys allocated pursuant to subparagraph (A), seventy-five million dollars ($75,000,000) shall be allocated to the Department of Forestry and Fire Protection for the most urgent fire prevention projects that can
be initiated in 2020.
(b) The interim expenditure plan shall provide for the awarding of moneys within three six months of the effective date of this section.
3278.
Within six months of the effective date of this section, the Natural Resources Agency, in consultation with the commission, shall develop and adopt an expenditure plan for the revenues generated pursuant to this3279.
The expenditure plan shall provide for funding for wildfire risk reduction activities as follows:(a) Not less than one hundred million dollars ($100,000,000) for workforce training and development programs, expanded volunteering opportunities, and career pathways for careers in fire prevention and management, emergency medical technician, watershed and forest restoration, prescribed fire, forest and vegetation management, invasive plant management, and sustainable forest practices industries, among others. Moneys specified in this subdivision shall be provided to entities involved in workforce training and development and the creation of career pathways, including, but not limited
to, the state and local conservation corps, the community colleges, state conservancies, joint powers authorities, qualified nonprofits, registered preapprenticeship programs, and public agencies with expertise in workforce training and development, under terms and conditions set forth in the expenditure plan. These investments shall provide comprehensive workforce training and development opportunities, including education, training, certifications, or placement services for jobs and careers in appropriate economic sectors and professions. In allocating funds, the Natural Resource Agency shall prioritize volunteer service and workforce training and development opportunities for low-income individuals with employment barriers, as defined in paragraph (2) of subdivision (j) of Section 14005 of the
Unemployment Insurance Code.
(b) Not less than two hundred million dollars ($200,000,000) for a prehazard mitigation grant program developed by the Office of Emergency Services in conjunction with the Department of Forestry and Fire Protection that may shall include grants to local and state agencies, including counties, and others for improvements to detection, warning, and evacuation systems, emergency notification systems, and improvements in fire and disaster response planning, communication, and
infrastructure. Grants may also be awarded for structural hardening projects and to create incentives for the installation of microgrids, distributed generation, and storage systems powered by clean energy.
(c) (1) Not less than three hundred million dollars ($300,000,000) for the implementation of projects to reduce the risk of wildfire undertaken by the Natural Resources Agency and its departments, boards, and conservancies. The priority shall be on areas that are wildland urban interfaces or in high or very high fire hazard severity zones. Eligible activities include landscape scale restoration, prescribed fire, and science-based vegetation treatment programs that provide long-term reduction of wildfire risk, that protect
lives and properties, and provide buffers around communities that will reduce the risk of wildfire and structural hardening. Projects shall be durable over time and, when undertaken on forested lands, shall emphasize carbon sequestration benefits, reduce habitat fragmentation, and ensure the maintenance of diverse and natural conditions, including older native forest structure and composition. Projects shall reflect the concurrence of the Department of Fish and Wildlife and the appropriate regional water quality control board, if a project may affect resources under their respective jurisdiction.
(2) Of the funds allocated pursuant to paragraph (1), not less than seventy-five million dollars ($75,000,000) shall be available to the Department of Forestry and Fire Protection for the most urgent
fire prevention and training projects.
(3) Of the funds allocated pursuant to paragraph (1), not less than twenty-five million dollars ($25,000,000) shall be made available to the Department of Forestry and Fire Protection to be dispersed to a state conservancy that is working on firefighter health and safety research to identify and understand the increasing scale of fires, fire risks, modernized vegetation management, efficacious building materials, and effective partnerships in preparing and responding to fires, and to understand and develop methods to reduce exposure to, and the impacts of, hazardous and other materials that can impair the health and safety of first responders and community members from fires.
(2)
(4) Of the funds allocated pursuant to paragraph (1), not less than fifty million dollars ($50,000,000) shall be available to the State Air Resources Board for projects that reduce emissions of greenhouse gases and criteria air pollutants related to forest treatments. Preference shall be given to projects that can provide negative emissions of greenhouse gases as determined by the State Air Resources Board.
(3)
(5) Of the funds allocated
pursuant to paragraph (1), one hundred million dollars ($100,000,000) shall be available for the fire prevention grants program of the California Department of Forestry and Fire Protection.
(d) Not less than two hundred million dollars ($200,000,000) to the Wildlife Conservation Board for restoration and protection of forests and wildlands to improve forest and ecosystem health and wildfire resilience.
(e) Not less than two hundred million dollars ($200,000,000) for the development and implementation of community wildfire protection plans through grants to counties, fire safe councils, resource conservation districts, and other qualified entities, including local fire agencies and
districts, to develop and implement activities to enhance community wildfire safety, defensible space, home hardening, and other projects to improve fire resilience.
(f) Not less than three hundred million dollars ($300,000,000) to reduce the risk of wildfires through coordinated and integrated regional approaches to the restoration of watersheds and reduction in conditions that lead to catastrophic wildfires, through grants to the Regional Fire and Forest Capacity Program of the Natural Resources Agency.
(g) Not less than one hundred million dollars ($100,000,000) to the Department of Parks and Recreation to reduce the risk of wildfire and restore fire-related damages at appropriate units of the state park system.
(h) Not less than three hundred million dollars ($300,000,000) to state conservancies within the service areas of the large electrical corporations to reduce the risk of wildfires and improve forest and ecosystem health, corridor and trail protection and connectivity, and to help with appropriate workforce training and development consistent with the state conservancies’ governing statutes. Priority shall be given to reducing repetitive, catastrophic wildfires in the wildland urban interface.
(i) Not less than three hundred million dollars ($300,000,000) to the Strategic Growth Council to establish cooling centers, clean air centers, hydration stations, emergency shelters, and
backup solar electrical generation and storage facilities, including those located at the network of county and state-owned fair facilities, to safeguard vulnerable populations from extreme events.
(j) (1) Not less than three hundred million dollars ($300,000,000) shall be available for water infrastructure upgrades and improvements that increase water supply reliability for fire fighting and other beneficial uses or that decrease reliance on water supplies from areas impacted by wildfires. Eligible projects include, but are not limited to, any of the following:
(A) Projects that improve water supply reliability for fire fighting in areas at high risk
for wildfires.
(B) Projects that improve regional water supply reliability in areas whose water supply is impacted by wildfires.
(C) Projects that decrease reliance on water supplies that are impacted by wildfires.
(2) Of the funds allocated under paragraph (1), fifty million dollars ($50,000,000) shall be available for restoration of the capacity of the Friant–Kern Canal that was lost due to subsidence, consistent with the water management goal under the September 13, 2006, Stipulation of Settlement in the litigation entitled Natural Resources Defense Council, et al v Kirk Rodgers, et al, United States District Court, Eastern District of California, No. CIV S-88-1658 LKK/GGH. A cost share of not less than 50 percent of the
total costs of the project shall be required.
(3) Of the funds allocated under paragraph (1), fifty million dollars ($50,000,000) shall be available to implement the restoration goal of the stipulation of settlement described in paragraph (2), including funding for restoration projects identified in paragraph 11 of the Stipulation of Settlement, and funding to support the work of the Restoration Administrator and Technical Advisory Committee.
SEC. 4.
Section 3284 of the Public Utilities Code is amended to read:3284.
(a) There is hereby created the Wildfire Fund, which is not a fund in the State Treasury.(b) Notwithstanding Section 13340 of the Government Code, the fund is continuously appropriated without regard to fiscal years for the purposes of this part.
(c) (1) The fund shall be administered by the administrator, subject to the direction of the council, in accordance with Chapter 3 (commencing with Section 3291) to provide funds to participating electrical corporations to satisfy eligible claims arising from a covered wildfire in accordance with this part.
(2) At the discretion of the administrator, segregated, dedicated accounts within the fund may be established.
(d) The fund shall be continued in existence unless the administrator winds down the fund in accordance with Section 3291 or 3292, as applicable.
(e) Uninvested moneys in the fund may be deposited from time to time in financial institutions authorized by law to receive deposits of public moneys or, with the approval of the Treasurer, the Surplus Money Investment Fund as provided in Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code.
(f) A national bank shall be custodian of all securities belonging to the fund, except as otherwise provided in the
constituent instruments that define the rights of the holders of the Wildfire Fund bonds as set forth in paragraph (1) of subdivision (b) of Section 80540 of the Water Code.
(g) With the approval of the council, the administrator shall establish and approve procedures for the review, approval, and timely funding of eligible claims. The procedures may be revised from time to time by the administrator with the approval of the council. The procedures may include processes to facilitate and expedite the review and approval of settled eligible claims, including guidelines for, or preapproval of, settlement levels. The procedures shall provide for the reimbursement of eligible claims within 45 days of the date the administrator approves the settlement amount for any eligible claim unless that timing is not
practicable.
SEC. 5.
Section 3285 of the Public Utilities Code is amended to read:3285.
(a) The fund shall be initially capitalized by a loan from the state’s Surplus Money Investment Fund pursuant to Section 3288.(b) Proceeds of any Wildfire Fund bonds issued as provided in paragraph (1) of subdivision (b) of Section 80540 of the Water Code shall be used as provided in Section 80550 of the Water Code. Any proceeds from the bonds allocated to the fund shall be deposited into a segregated account within the fund.
(c) All of the following shall be deposited into the fund:
(1) Initial contributions from electrical corporations.
(2) Annual contributions from electrical corporations.
(3) Revenue generated from the ratepayers of a participating regional electrical corporation by a charge authorized by the commission pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of Section 3289 and remitted to the fund pursuant to Section 3291 or 3292, as applicable.
(4) Revenues generated from the ratepayers of each large electrical corporation by a charge authorized by the commission pursuant to subparagraph (A) of paragraph (1) of subdivision (a) of Section 3289 as provided in paragraph (4) of subdivision (b) of Section 80550.
(5) Proceeds of Wildfire Fund bonds allocated to the fund
as provided in Section 80550 of the Water Code.
SEC. 6.
Section 3288 of the Public Utilities Code is amended to read:3288.
(a) If Section 3291 is operative, the Director of Finance, in consultation with the Treasurer and the administrator, shall determine the amount and timing of moneys needed to support the purposes of this part. The Director of Finance shall request those moneys from the Controller. Upon that request, the Controller shall transfer up to ten billion five hundred million dollars ($10,500,000,000) to the fund from the Surplus Money Investment Fund and other funds that accrue interest to the General Fund as a cash loan. The loan principal and interest shall be fully repaid as provided in subdivision (b) of Section 80550 of the Water Code.(b) If Section 3292 is operative, the Director of Finance,
in consultation with the Treasurer and the administrator, shall determine a schedule to provide ten billion five hundred million dollars ($10,500,000,000) to the fund and shall provide that schedule to the Controller within 60 days. The Controller shall transfer the moneys from the Surplus Money Investment Fund and other funds that accrue interest to the General Fund pursuant to the schedule provided by the Director of Finance as a loan to support the purposes of this part. The loan from the Surplus Money Investment Fund is intended to provide necessary cash on a short-term basis for claims-paying resources. It is the intent of the Legislature that the loan be repaid as quickly as possible within a fiscal year. The loan shall be repaid by the proceeds of the charges authorized pursuant to subparagraph (A) of paragraph (1) of subdivision (a) of Section 3289 or the proceeds of any Wildfire Fund
bonds as set forth in paragraph (1) of subdivision (b) of Section 80540 of the Water Code.
(c) In the case of subdivision (a) or (b), interest payments on outstanding loan amounts shall be calculated at the greater of the quarter-to-date yield at the one-year constant maturity United States Treasury rate for the calendar quarter concluded directly before the calculation or the Surplus Money Investment Fund rate at the time of the cash transfer. The interest payments shall be paid on a quarterly basis from Wildfire Fund assets following the cash transfer and shall continue until the loan has been fully repaid. The interest payments are interest earnings of the Surplus Money Investment Fund and shall be apportioned pursuant to Sections 16475 and 16480.6 of the Government Code.
(d) Whether Section 3291 or 3292 is operative, an initial transfer to the fund of no less than two billion dollars ($2,000,000,000) shall be made in the 2019–20 fiscal year.
(e) Prior to a transfer being made from the Surplus Money Investment Fund pursuant to subdivision (a) or (b), the Director of Finance shall determine if the transfer would result in the General Fund’s estimated cash and unused borrowable resources declining below three billion dollars ($3,000,000,000) at any point in time over the succeeding 24-month period. If the Director of Finance determines that the transfer would result in estimated cash and unused borrowable resources declining below that level, the transfer of funds from the Surplus Money Investment Fund shall not be made. This subdivision shall not apply to the first two billion dollars
($2,000,000,000) of transfers made in the 2019–20 fiscal year.
SEC. 7.
Section 3289 of the Public Utilities Code is amended to read:3289.
(a) (1) No later than July 26, 2019, the commission shall initiate a rulemaking proceeding to consider using its authority pursuant to Section 701 to require each electrical corporation, except a regional electrical corporation that chooses not to participate in any fund pursuant to Chapter 3 (commencing with Section 3291), to collect a nonbypassable charge from ratepayers of the electrical corporation to support the fund, including the payment of any Wildfire Fund bonds issued pursuant to paragraph (1) of subdivision (b) of Section 80540 of the Water Code, as follows:(A) For a large electrical corporation, a charge in an amount sufficient to fund the
revenue requirement, as established pursuant to Section 80524 of the Water Code.
(B) For a regional electrical corporation, the amount equal to one-half cent per kilowatt-hour ($0.005/kWh).
(2) If the commission determines that the imposition of the charge described in paragraph (1) is just and reasonable, and that it is appropriate to exercise its authority pursuant to Section 701 to do so, the commission shall direct each electrical corporation to impose and collect that charge commencing in the month immediately following the month in which the final imposition of the revenue requirement with respect to bonds previously issued pursuant to Division 27 (commencing with Section 80000) of the Water Code is made. The charge shall be collected in the same manner as that for the payments
made to reimburse the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(b) Notwithstanding any other law, no later than 90 days after the initiation of the rulemaking proceeding, the commission shall adopt a decision regarding the imposition of the charge.
(c) Notwithstanding Section 455.5 or 1708, or any other law, the commission shall not revise, amend, or otherwise modify a decision to impose a charge made pursuant to this section at any time prior to January 1, 2036.
SEC. 7.5.
Section 3289 of the Public Utilities Code is amended to read:3289.
(a) (1) No later than July 26, 2019, the commission shall initiate a rulemaking proceeding to consider using its authority pursuant to Section 701 to require each electrical corporation, except a regional electrical corporation that chooses not to participate in any fund pursuant to Chapter 3 (commencing with Section 3291), to collect a nonbypassable charge from ratepayers of the electrical corporation to support the fund, including the payment of any Wildfire Fund bonds issued pursuant to paragraph (1) of subdivision (b) of Section 80540 of the Water Code, as follows:(A) For a large electrical corporation, a charge in an amount sufficient to fund the
revenue requirement, as established pursuant to Section 80524 of the Water Code.
(B) For a regional electrical corporation, the amount equal to one-half cent per kilowatt-hour ($0.005/kWh).
(2) If the commission determines that the imposition of the charge described in paragraph (1) is just and reasonable, and that it is appropriate to exercise its authority pursuant to Section 701 to do so, the commission shall direct each electrical corporation to impose and collect that charge commencing in the month immediately following the month in which the final imposition of the revenue requirement with respect to bonds previously issued pursuant to Division 27 (commencing with Section 80000) of the Water Code is made. The charge shall be collected in the same manner as that for the payments
made to reimburse the Department of Water Resources pursuant to Division 27 (commencing with Section 80000) of the Water Code.
(b) Notwithstanding any other law, no later than 90 days after the initiation of the rulemaking proceeding, the commission shall adopt a decision regarding the imposition of the charge.
(c) Notwithstanding Section 455.5 or 1708, or any other law, the commission shall not revise, amend, or otherwise modify a decision to impose a charge made pursuant to this section at any time before January 1, 2036.
(d) If the administrator authorizes Golden State Energy to participate in the fund pursuant to subdivision (d) of Section 3292, Golden State Energy’s ratepayers shall be subject to the nonbypassable
charge previously imposed by the commission pursuant to this section.
SEC. 8.
Section 80506 of the Water Code is amended to read:80506.
As used in this division, unless the context otherwise requires, the following terms have the following meanings:(a) “Administrator” has the same meaning as defined in Section 3280 of the Public Utilities Code.
(b) “Bonds” means bonds, notes, or other evidences of indebtedness issued solely for purposes of supporting the Wildfire Fund, the Wildfire Prevention and Community Resilience Fund, and other related expenses incurred by the department pursuant to this division, or for reimbursing expenditures from the fund, the Wildfire Fund, or the Wildfire Prevention and Community Resilience Fund for those purposes; repaying to the Surplus
Money Investment Fund any loans made to the Wildfire Fund or the Wildfire Prevention and Community Resilience Fund; establishing or maintaining reserves in connection with the bonds; costs of issuance of bonds or incidental to their payment or security; capitalized interest; or renewing or refunding any bonds.
(c) “Commission” means the Public Utilities Commission.
(d) (1) For purposes of Wildfire Fund bonds issued pursuant to paragraph (1) of subdivision (b) of Section 80540, “electrical corporation” means a large electrical corporation, as defined in Section 3280 of the Public Utilities Code, that participates in the Wildfire Fund.
(2) For purposes of Wildfire Prevention and Community Resilience Fund bonds
issued pursuant to paragraph (2) of subdivision (b) of Section 80540, “electrical corporation” means a large electrical corporation as defined in Section 3271 of the Public Utilities Code.
(e) “Fund” means the Department of Water Resources Charge Fund established by Section 80550.
(f) “Wildfire Fund” has the same meaning as defined in Section 3280 of the Public Utilities Code.
(g) “Wildfire Prevention and Community Resilience Fund” means the fund established pursuant to Section 3271 of the Public Utilities Code.
SEC. 9.
Section 80524 of the Water Code is amended to read:80524.
(a) (1) The revenue requirement for each year or, with respect to the first year and last year, the pro rata portion of the year, until January 1, 2036, shall be equal to the average annual amount of collections by the department with respect to charges imposed pursuant to the revenue requirements established by the department under Section 80110 for the period from January 1, 2013, through December 31, 2018.(2) The revenue requirement for each year or, with respect to the first year and last year, the pro rata portion of the year for the time period between the date on which the department shall have paid in full, at maturity, or legally defeased all of its
outstanding any Wildfire Fund bonds issued pursuant to paragraph (1) of subdivision (b) of Section 80540 or January 1, 2036, whichever is earlier, later, and January 1, 2051, shall be not more than the average annual amount of collections by the department with respect to charges imposed pursuant to the revenue requirements established by the department under Section 80110 for the period from January 1, 2013, through December 31, 2018.
(3) The revenue requirement shall remain in effect until January 1, 2051.
(b) If, pursuant to Section 3289 of the Public Utilities Code, the commission makes a just and reasonable determination with respect to the revenue requirement, then the commission shall enter into an agreement with the department with respect to charges under Section 3289 of the Public Utilities Code with respect to the revenue requirement, and that agreement shall have the force and effect of an irrevocable financing order adopted in accordance with Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, as determined by the commission. The agreement and financing order shall provide for the administration of the revenue requirement, including provisions to the effect that (1) the department shall notify the commission each year of the annual collections received by the department with respect to the revenue requirement and the amount of
any excess or deficiency in collections above or below the revenue requirement and that the commission shall adjust charges in the subsequent year to reflect any such excess or deficiency, and (2) during any revenue requirement period if the department forecasts that the revenue requirement for that period will not be met and that collections will not be sufficient to fund any of the amounts in paragraphs (1) to (5), inclusive, of Section 80544, then the department shall notify the commission in writing and the commission shall act within 30 days to increase charges so that the amounts collected during that period are sufficient to meet those obligations. For avoidance of doubt, no such adjustment to charges by the commission shall affect in any respect the commission’s just and reasonable determination with respect to the revenue requirement.
(c) The commission shall enter into an agreement with the department with respect to charges under Section 3273 of the Public Utilities Code with respect to the revenue requirement, and that agreement shall have the force and effect of an irrevocable financing order adopted in accordance with Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, as determined by the commission. The agreement and financing order shall provide for the administration of the revenue requirement, including provisions to the effect that (1) the department shall notify the commission each year of the annual collections received by the department with respect to the revenue requirement and the amount of any excess or deficiency in collections above or below the revenue requirement and that the commission shall adjust charges in the subsequent year to
reflect any such excess or deficiency, and (2) during any revenue requirement period, if the department forecasts that the revenue requirement for that period will not be met and that collections will not be sufficient to fund any of the amounts in Subparagraphs
subparagraphs (A) to (E) (E), inclusive, paragraphs (1) to (5), of paragraph (1) of subdivision (a) of Section 80544.5, then the department shall notify the commission in writing and the commission shall act within 30 days to increase charges so that the amounts collected during that period are sufficient to meet those obligations.
SEC. 10.
Section 80540 of the Water Code is amended to read:80540.
(a) The department may incur indebtedness and issue bonds as evidence thereof solely for the purposes of supporting the Wildfire Fund, the Wildfire Prevention and Community Resilience Fund, and other related expenses incurred by the department pursuant to this division, provided that bonds may not be issued in an amount the debt service on which, to the extent payable from the fund, is estimated by the department to exceed the amounts estimated to be available in the fund for their payment.(b) (1) For the support of the Wildfire Fund, the department may authorize the issuance of bonds, excluding any notes issued in anticipation of the issuance of bonds and retired
from the proceeds of those bonds, in an aggregate amount up to ten billion five hundred million dollars ($10,500,000,000).
(2) For the support of the Wildfire Prevention and Community Resilience Fund, the department may authorize the issuance of bonds, excluding any notes issued in anticipation of the issuance of bonds and retired from the proceeds of those bonds, in an aggregate amount up to three billion dollars ($3,000,000,000). The repayment of bonds issued pursuant to this paragraph, including the payment of interests on the bonds, shall occur after the scheduled final maturity date of all of its any outstanding Wildfire Fund bonds issued pursuant to
paragraph (1) or January 1, 2036, whichever is earlier. later.
(c) Refunding bonds for any of the following purposes shall not be included in the calculation of the aggregate amount described in subdivision (b):
(1) Refunding bonds issued to obtain a lower interest rate.
(2) Refunding bonds bearing a variable interest rate with bonds bearing interest at a fixed rate.
(3) Refunding bonds issued to refund securities that are secured by bond insurance policies, credit, or liquidity facilities if any nationally
recognized rating agency reduces or withdraws, or proposes to reduce or withdraw, the rating assigned to those securities.
(d) Before the issuance of bonds in a public offering, the department shall establish a mechanism to ensure the bonds are sold at investment grade ratings and repaid on a timely basis from pledged revenues. This mechanism may include, but is not limited to, an agreement between the department and the commission as described in Section 80524.
(e) Notwithstanding any provision of this division to the contrary, the department shall not issue any Wildfire Fund bonds pursuant to paragraph (1) of subdivision (b) until the earlier of either of the following:
(1) The date on which the
department shall have legally defeased all of its outstanding power supply revenue bonds issued pursuant to Section 80134 and provided written notice to the commission.
(2) The date on which the department shall have paid in full, at maturity, all of its outstanding power supply revenue bonds issued pursuant to Section 80134 and provided written notice to the commission.
SEC. 11.
Section 80542 of the Water Code is amended to read:80542.
(a) (1) Bonds for the support of the Wildfire Fund may be issued by the department, upon authorization by written determination of the director of the department, with the approval of the Director of Finance and the Treasurer, on terms acceptable to and approved by the administrator. The Department of Finance shall notify the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the fiscal committees of each house of the Legislature of its written determination. The bonds shall be sold at the prices and in the manner, and on the terms and conditions, as shall be specified in that determination, and the determination may contain or authorize any other provision, condition, or limitation not inconsistent with this division and those provisions as may be deemed reasonable and proper for the security of the bondholders. Bonds may mature at the time or times, and bear interest at the rate or rates, which may be fixed or variable and be determined by reference to an index or such other method, that are specified in the determination. Neither the person executing the determination to issue bonds nor any person executing bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance of the bonds.(2) Bonds for the support of the Wildfire Prevention and Community Resilience Fund may be issued by the department, upon authorization by written determination of the director of the department, with the approval of the Director of Finance and the Treasurer, on terms acceptable to and
approved by the Secretary of the Natural Resources Agency. The Department of Finance shall notify the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the fiscal committees of each house of the Legislature of its written determination. The bonds shall be sold at the prices and in the manner, and on the terms and conditions, as shall be specified in that determination, and the determination may contain or authorize any other provision, condition, or limitation not inconsistent with this division and those provisions as may be deemed reasonable and proper for the security of the bondholders. Bonds may mature at the time or times, and bear interest at the rate or rates, which may be fixed or variable and be determined by reference to an index or other method, that are
specified in the determination. Neither the person executing the determination to issue bonds nor any person executing bonds shall be personally liable therefor or be subject to any personal liability or accountability by reason of the issuance of the bonds.
(b) In the discretion of the department, any bonds may be secured by a trust agreement by and between the department and a corporate trustee, which may be any trust company or bank having trust powers within or outside the state, or the Treasurer. Notwithstanding any other law, the Treasurer shall not be deemed to have a conflict of interest by reason of acting as the trustee. The department may enter into such contracts or arrangements as it shall deem to be necessary or appropriate for the issuance and further security of the bonds.
(c) Bonds shall be legal investments for all trust funds, the funds
of all insurance companies, savings and commercial banks, trust companies, executors, administrators, trustees, and other fiduciaries, for state school funds, pension funds, and for any funds that may be invested in county, school, or municipal bonds.
(d) Notwithstanding that bonds may be payable from a special fund, the bonds shall be deemed to be negotiable instruments for all purposes.
(e) Any bonds, and the transfer of and income derived from those bonds, shall at all times be free from taxation of every kind by the state and by the political subdivisions of the state.
(f) Bonds shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the department,
or a pledge of the faith and credit of the state or of any such political subdivision, but shall be payable solely from the funds herein provided for. All bonds shall contain a statement to the following effect: “Neither the faith and credit nor the taxing power of the State of California is pledged to the payment of the principal of or interest on this bond.” The issuance of bonds shall not directly or indirectly or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment.
(g) (1) The department may pledge or assign any revenues under any obligation entered into, and rights to receive the same, and moneys on deposit in the fund and income or revenue derived from the investment thereof, as security for
the department’s obligations pursuant to this division.
(2) It is the intent of the Legislature that any pledge of moneys, revenues, or property made by the department shall be valid and binding from the time when the pledge is made; that the moneys, revenues, or property so pledged and thereafter collected from retail end use customers, or paid directly or indirectly to or for the account of the department, is hereby made, and shall immediately be, subject to the lien of that pledge without any physical delivery thereof or further act; that the lien of any such pledge shall be valid and binding against all parties having claims of any kind in tort, contract, or otherwise against the department irrespective of whether those parties have notice thereof, and that no resolution or instrument by which the pledge or lien created pursuant to
this subdivision is expressed, confirmed, or approved need be filed or recorded in order to perfect the pledge or lien. These provisions shall in all respects govern the creation, perfection, priority, and enforcement of any lien created by or under this division.
SEC. 12.
Section 80544 of the Water Code is amended to read:80544.
(a) For the support of the Wildfire Fund, if, pursuant to Section 80524, the commission makes a just and reasonable determination with respect to that revenue requirement, the department shall, and in any obligation entered into pursuant to paragraph (1) of subdivision (b) of Section 80540, may covenant to, at least annually, and more frequently as required, allocate or cause to be allocated moneys collected pursuant to this division to provide any of the following:(1) The amounts necessary to pay the principal of, and premium, if any, and interest on, all Wildfire Fund bonds issued pursuant to paragraph (1) of subdivision (b) of Section 80540 as and when those bonds shall become
due.
(2) The amounts necessary to make payments under any contracts, agreements, or obligations entered into by it pursuant hereto, in the amounts and at the times they shall become due.
(3) Reserves in such amount as may be determined by the department from time to time to be necessary or desirable.
(4) Consistent with Section 3288 of the Public Utilities Code, repayment of loans made from the Surplus Money Investment Fund to the Wildfire Fund.
(5) The administrative costs of the department incurred in administering this division.
(6) After meeting the purposes in paragraphs (1) to (5), inclusive, the
transfer of any remaining revenue requirement amount to the Wildfire Fund.
(b) The commission shall not revise the revenue requirement established for the support of the Wildfire Fund at any time prior to January 1, 2036. For avoidance of doubt, the revenue requirement established for the support of the Wildfire Fund shall not be imposed and collected until the department has legally defeased or paid at maturity the power supply revenue bonds issued pursuant to Section 80134 and provided written notice thereof to the commission.
SEC. 13.
Section 80544.5 is added to the Water Code, to read:80544.5.
(a) (1) For the support of the Wildfire Prevention and Community Resilience Fund, on and after the date on which the department shall have paid in full, at maturity, or legally defeased(A) The amounts necessary to pay the principal of, and premium, if any, and interest on, all Wildfire Prevention and Community Resilience Fund bonds issued pursuant to paragraph (2) of subdivision (b) of Section 80540 as and when those bonds shall become due.
(B) The amounts necessary to make payments under any contracts, agreements, or obligations entered into by it pursuant hereto, in the amounts and at the times they shall become due.
(C) Reserves in such
amount as may be determined by the department from time to time to be necessary or desirable.
(D) Consistent with Section 3272 of the Public Utilities Code, repayment of loans made from the Surplus Money Investment Fund to the Wildfire Prevention and Community Resilience Fund.
(E) The administrative costs of the department incurred in administering this division.
(F) After meeting the purposes in subparagraphs (A) to (E), inclusive, the transfer of any remaining revenue requirement amount to the Wildfire Prevention and Community Resilience Fund.
(2) For the avoidance of doubt, while it is intended that repayment of Wildfire Prevention and Community Resilience
Fund bonds issued pursuant to paragraph (2) of subdivision (b) of Section 80540 to support the Wildfire Prevention and Community Resilience Fund shall occur after the scheduled final maturity of the Wildfire Fund bonds, the department may enter into covenants and commitments to support the Wildfire Prevention and Community Resilience Fund bonds at the time those bonds are issued.
(b) The commission shall not revise the revenue requirement established for the support of the Wildfire Prevention and Community Resilience Fund at any time between the date on which the department shall have paid in full, at maturity, or legally defeased all of its any outstanding
Wildfire Fund bonds issued pursuant to paragraph (1) of subdivision (b) of Section 80540 or January 1, 2036, whichever is earlier, later, and January 1, 2051. For avoidance of doubt, the revenue requirement established for the financing of the Wildfire Prevention and Community Resilience Fund shall not be imposed and collected until the department has legally defeased or paid at maturity the Wildfire Fund bonds issued pursuant to paragraph (1) of subdivision (b) of Section 80540 and provided written notice thereof to
the commission. full amount of the revenue requirement authorized in Decision 19-10-056 has been fully paid into, or for the benefit of, the Wildfire Fund.
SEC. 14.
Section 80550 of the Water Code is amended to read:80550.
(a) There is hereby established in the State Treasury the Department of Water Resources Charge Fund. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated, without regard to fiscal year, to the department and shall be available for the purposes of this division.(b) All revenues payable to the department under this division, including proceeds of bonds issued pursuant to Chapter 3 (commencing with Section 80540), shall be deposited in the fund. Notwithstanding any other law, interest accruing on the moneys in the fund shall be deposited in the fund and shall be used for purposes of this division. Payments from the fund may be made only
for the following purposes:
(1) Payment of any bonds or other contractual obligations authorized by this division.
(2) The expenses incurred by the department in administering this division.
(3) (A) Consistent with Section 3288 of the Public Utilities Code, repayment of principal of, and interest on, loans made from the Surplus Money Investment Fund to the Wildfire Fund. Repayment of loans made from the Surplus Money Investment Fund shall be made as soon as practicable.
(B) Consistent with Section 3272 of the Public Utilities Code, repayment of principal of, and interest on, loans made from the Surplus Money Investment Fund to the
Wildfire Prevention and Community Resilience Fund. Repayment of loans made from the Surplus Money Investment Fund shall be made as soon as practicable.
(4) The transfers to the Wildfire Fund, as appropriate.
(5) The transfers to the Wildfire Prevention and Community Resilience Fund, as appropriate.
(c) Obligations authorized by this division shall be payable solely from the fund. Neither the full faith and credit nor the taxing power of the state are or may be pledged for any payment under any obligation authorized by this division.
(d) While any obligations of the department incurred under this division remain outstanding and not fully performed or
discharged, the rights, powers, duties, and existence of the department and the
commission shall not be diminished or impaired in any manner that will affect adversely the interests and rights of the holders of or parties to those obligations. The department may include this pledge and undertaking of the state in the department’s obligations.
SEC. 15.
Upon the transfer of moneys pursuant to Section 3272 of the Public Utilities Code, the sum of five hundred million dollars ($500,000,000) is hereby appropriated from the Wildfire Prevention and Community Resilience Fund to the Natural Resources Agency for the implementation of the interim expenditure plan adopted pursuant to Section 3276 of the Public Utilities Code.SEC. 16.
Section 7.5 of this bill incorporates amendments to Section 3289 of the Public Utilities Code proposed by both this bill and Senate Bill 350. That section shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2021, but this bill becomes operative first, (2) each bill amends Section 3289 of the Public Utilities Code, and (3) this bill is enacted after Senate Bill 350, in which case Section 3289 of the Public Utilities Code, as amended by Section 7 of this bill, shall remain operative only until the operative date of Senate Bill 350, at which time Section 7.5 of this bill shall become operative.SEC. 17.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.SEC. 18.
This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:To address the issues described in Section 1 of this act for the preservation of the public health and safety and the environment in an expeditious manner, it is necessary for this act to take effect immediately.
