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AB-724 Clean Energy Jobs and Investment Act.(2011-2012)

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Corrected  October 21, 2011
Amended  IN  Senate  September 09, 2011
Amended  IN  Senate  September 07, 2011
Amended  IN  Senate  August 30, 2011
Amended  IN  Senate  August 18, 2011
Amended  IN  Assembly  May 17, 2011
Amended  IN  Assembly  April 28, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 724


Introduced  by  Assembly Member Bradford
(Principal Coauthor(s): Assembly Member Williams)

February 17, 2011


An act to amend Section 25744 of, to add Sections 25740.6, and 25744.7 to, and to add Chapter 7.2 (commencing with Section 25621) to Division 15 of, and to repeal Sections 25740.5, 25743, 25744.5, 25746, and 25751 of, the Public Resources Code, and to amend Sections 384 and 399.8, 399.8, and 739 of, and to add Section 399.8.5 to, and to add Chapter 12 (commencing with Section 2120) to Part 1 of Division 1 of, the Public Utilities Code, relating to energy, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 724, as amended, Bradford. Clean Energy Jobs and Investment Act.
(1) Under the Public Utilities Act, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations. The Public Utilities Act requires the PUC to require, until January 1, 2012, an electrical corporation to identify a separate electrical rate component (public goods charge) to fund energy efficiency, renewable energy, and research, development, and demonstration programs that enhance system reliability and provide in-state benefits. A violation of the Public Utilities Act is a crime.
This bill would extend this requirement to January 1, 2020. Because a violation of this requirement is a crime, this bill would impose a state-mandated local program.
The bill also would, commencing on January 1, 2012, increase the amount of funds the PUC would require an electrical corporation to collect for these purposes.
This bill would result in a change in state taxes for the purpose of increasing state revenues within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
The bill would provide that if the Legislature finds that moneys collected on or after January 1, 2012, are not used for the above-specified purposes, the collection of those moneys would cease at the end of the calendar year in which the Legislature made that finding.
(2) Existing law requires that the moneys collected between January 1, 2007, and January 1, 2012, from the electrical corporations for public interest research, development, and demonstration projects be deposited in the Public Interest Research, Development, and Demonstration Fund and be used for the purposes of the Public Interest Research, Development, and Demonstration, and Development Program.
This bill would, commencing January 1, 2012, repeal the Public Interest Research, Demonstration, and Development Program for most purposes and would enact the Clean Energy Jobs and Investment Act. This bill would create the Clean Energy Innovation Program Fund in the State Treasury and require that any funds generated from the public goods charge collected before January 1, 2012, be transferred to the Energy Commission’s Public Interest Research, Development, and Demonstration Wrap-Up Account, which the bill would create in the Clean Energy Innovation Program Fund, to be available, upon appropriation by the Legislature, for expenditure pursuant to provisions in effect prior to the enactment of this act. This bill would expressly provide that the public goods charge for public interest research, development, and demonstration projects collected before January 1, 2012, be deposited into the Public Interest Research, Development, and Demonstration Fund and expended for the purposes of the Public Interest Research, Development, and Demonstration Program. The bill would establish the Clean Energy Innovation Program Fund in the State Treasury and would require public goods charge collected on and after January 1, 2012, to be deposited into the Clean Energy Innovation Program Fund and expended by the State Energy Resources Conservation and Development Commission (Energy Commission), upon appropriation, for specified purposes.
(3) Existing law requires the Energy Commission to establish programs to optimize public investment and ensure that the most cost-effective and efficient investments in renewable energy resources are vigorously pursued (Renewable Energy Resources Program). Existing law requires, until January 1, 2012, that moneys from the public goods charge collected for renewable energy be transferred to the Renewable Resource Trust Fund, a continuously appropriated fund, for the purpose of implementing the program.
This bill would revise and recast the Renewable Energy Resources Program to, among other things, provide investment in energy storage technologies. The bill would extend to January 1, 2020, the transfer of the public goods charge collected for renewable energy to the Renewable Resource Trust Fund. The bill would provide that moneys in the Renewable Resource Trust Fund, upon appropriation by the Legislature, be expended for the purposes of the program.
(4) Decisions of the PUC adopted the California Solar Initiative (CSI). Existing law requires the PUC to undertake certain steps in implementing the CSI. Existing law requires the PUC to ensure that the total cost of the CSI over the duration of the program does not exceed $3,350,000,000, including $400,000,000 from the Emerging Renewable Resources Account within the Renewable Resource Trust Fund, for programs for the installation of solar energy systems, as defined, on new construction administered by the Energy Commission (New Solar Homes Partnership).
This bill would provide that the $400,000,000 referenced above be subject to supervision by the PUC. The bill would require the Energy Commission to revise its guidelines applicable to the New Solar Homes Partnership so that the program accomplishes specified matter.
(5) The bill would not become operative unless SB 870 of the 2011–12 Regular Session of the Legislature is enacted on or before January 1, 2012.
(6) 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.
(7) This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Chapter 7.2 (commencing with Section 25621) is added to Division 15 of the Public Resources Code, to read:
CHAPTER  7.2. Clean Energy Jobs and Investment Act
Article  1. General Provisions

25621.
 This chapter shall be known and may be cited as the Clean Energy Jobs and Investment Act.

25621.1.
 The Legislature finds and declares all of the following:
(a) Investing in clean energy creates jobs, attracts and grows businesses, and increases California’s economic competitiveness.
(b) Investing in energy efficiency provides lower energy bills for individual households and businesses and saves all ratepayers money through reduced need for new powerplants and transmission and distribution systems.
(c) Clean energy investments benefit ratepayers by cutting energy waste, diversifying energy supplies, increasing energy security and grid reliability, reducing harmful air pollutants, and protecting public health and the environment.
(d) California has been a leader in clean energy development and deployment, saving consumers billions of dollars from increased energy efficiency, creating new jobs and businesses, and fostering innovation through research and development.
(e) Meeting California’s renewable energy, energy efficiency, and emissions reduction policies will require strategic public investments in clean energy research, development, deployment, and commercialization.

25621.2.
 It is the intent of the Legislature that investments made pursuant to this chapter do all of the following:
(a) Develop and deploy clean energy technologies that maximize job creation and regional sustainability, strengthen California businesses and economic competitiveness, and provide multiple benefits to ratepayers.
(b) Save ratepayers money through reduced need for new powerplants and transmission and distribution systems.
(c) Accelerate the development and deployment of clean energy technologies that meet the California renewables portfolio standard specified in Chapter 1 of the Statutes of the First Extraordinary Session of 2011, energy storage requirements specified in Chapter 469 of the Statutes of 2010, Chapter 470 of the Statutes of 2009, and subparagraph (C) of paragraph (9) of subdivision (b) of Section 454.5 of the Public Utilities Code.
(d) Respond to changing energy and technology market conditions.
(e) Leverage investments in clean energy to maximize ratepayer benefits, reduce costs, and achieve sustainable changes in the market so that public investment will no longer be needed.
(f) Help local governments to plan, permit, finance, and implement clean energy development.
(g) Maximize opportunities for low-income households and disadvantaged communities, beyond those already assisted by the Public Utilities Commission’s program for low-income energy assistance and the California rate assistance program for low-income rate discounts in urban and rural areas of the state, to participate in these programs.
(h) Promote business and employment opportunities for small business and women-, minority-, veteran-, and disabled-owned businesses.
(i) Recognize energy savings from water use efficiency and conservation programs.

25621.3.
 For purposes of this chapter, the following terms mean the following:
(a) “Biogas” means digester gas, landfill gas, and any gas derived from an eligible biomass feedstock.
(b) “Biomass” means an organic material not derived from fossil fuels, including, but not limited to, agricultural crops, agricultural wastes and residues, waste pallets, crates, dunnage, manufacturing and construction wood wastes, landscape and right-of-way tree trimmings, mill residues that result from milling lumber, rangeland maintenance residues, biosolids, sludge derived from organic matter, biosolids produced at publicly owned wastewater treatment plants, and wood and wood waste from timbering operations.
(c) “CEIP” or “program” means the Clean Energy Innovation Program, formerly known as the Public Interest Energy Research (PIER) program, developed pursuant to Section 25621.12.
(d) “Clean energy” means energy efficiency, renewable energy, integration of electric vehicles, distributed generation, energy storage, and integrated demand-side management.
(e) “Comprehensive energy efficiency retrofit,” “whole house retrofit,” and “whole building retrofit” mean energy efficiency retrofits that achieve greater than 20-percent energy savings through a comprehensive package of audits, demand-side management options, and energy-saving improvements, such as insulation and duct sealing; heating, ventilation, and cooling system improvements; window and appliance upgrades; lighting upgrades; demand response cool roofs; measures to ensure that retrofits and existing infrastructure continue to operate as efficiently as possible; and other measures to increase energy efficiency.
(f) “Disadvantaged community” has the same meaning as that set forth in Section 79505.5 of the Water Code.
(g) “Distributed generation” means an electrical generation facility that is 20 megawatts or smaller in size and located close to a load center.
(h) “Energy storage” means technology or resources capable of absorbing energy, storing it for a period of time, and thereafter dispatching the energy, including energy storage management systems.
(i) “Financial investment tools” includes revolving loans, low-interest loans, loan-loss reserves, loan guarantees, interest rate buy-down, property-secured financing, on-bill financing or repayment, grants, rebates, incentives, regional municipal financing programs, performance guarantees, use of the California Infrastructure and Economic Development Bank, the California Alternative Energy Transportation Financing Authority, or other appropriate financing mechanisms.
(j) “Grid” means California’s electrical grid, including both transmission and distribution systems.
(k) “Grid integration” means the interconnection, and the seamless and reliable operation, of generation and demand management resources and strategies into the grid.
(l) “Low income” means an income at a level that is 200 percent of the federal poverty level or lower.
(m) “Renewable energy” means eligible renewable energy resources as defined in Section 399.12 of the Public Utilities Code.

SEC. 2.

 Section 25740.5 of the Public Resources Code, as amended by Section 5 of Chapter 1 of the First Extraordinary Session of the Statutes of 2011, is repealed.

SEC. 3.

 Section 25740.6 is added to the Public Resources Code, to read:

25740.6.
 (a) The commission shall implement the Clean Energy Investment Program to support achievement of the state’s renewable energy goals, including the growth of distributed generation, and seek creative solutions to barriers to development and deployment of technologies to achieve those goals. The program shall provide technical assistance, tools, and resources to support industry, local government, economic, and workforce development leaders in efforts to overcome these barriers.
(b) Activities eligible for investment pursuant to this chapter include, but are not limited to, those which will maximize job creation and economic growth through the deployment and commercialization of renewable energy, grid integration, and energy storage technologies. Activities authorized by this chapter shall support and foster the development of a diverse, reliable, and environmentally sustainable portfolio of renewable energy sources, including, but not limited to, distributed generation, demonstration projects on California state buildings or property, renewable generation on farmland or from agricultural, livestock, poultry and food processing operations, wastewater, the New Solar Homes Partnership (NSHP), energy storage, clean energy manufacturing in California, existing and advanced biogas, biomass, and other clean energy technologies, and workforce development.
(c) Any investments in biomass or biogas made pursuant to this section shall be targeted to both existing facilities and to incubate and commercialize technologies and facilities that do one or more of the following:
(1) Increase efficiency and reduce air pollution from existing biomass facilities.
(2) Incubate and commercialize technologies and facilities that generate energy from livestock, poultry, agricultural, wastewater, and food processing byproducts or waste.
(3) Develop or expand facilities to capture emissions and generate biogas from wastewater treatment facilities, including codigestion or landfills.
(4) Generate energy from community-scale, woody biomass facilities that promote safe and resilient forests, provide rural community benefits, and protect air and water quality, based on criteria determined by the commission in coordination with the Natural Resources Agency and the California Environmental Protection Agency.
(d) (1) Not less than twenty-five million dollars ($25,000,000) of the funds collected annually for 2012 and 2013, and not less than twenty million dollars ($20,000,000) of the funds collected annually for 2014 and 2015, pursuant to paragraph (1) of subdivision (d) of Section 399.8 of the Public Utilities Code shall be used for the purposes of incubating and commercializing technologies and facilities that generate energy from livestock, poultry, biosolids that are produced at publicly owned wastewater treatment plants, agricultural or food processing byproducts, or waste, and for wastewater, and for biomass programs that would provide financial incentives to new or existing biomass electric generating facilities that purchase and convert agricultural and forestry waste and residues. This section does not exclude funding for those purposes in subsequent years.
(2) New projects eligible under this subdivision may receive matching grants of up to 25 percent of the total project costs not to exceed two million five hundred thousand dollars ($2,500,000) per project.
(e) Any direct financial incentives determined to be necessary by the commission and made available to existing renewable biomass generation facilities shall be contingent upon utilization of regional agricultural forestry and waste residues.
(f) (1) In implementing the program, the commission may, in coordination with the Office of Planning and Research and the Secretary of the Natural Resources Agency, provide targeted financial and technical assistance to local and regional governments for the planning, siting, and permitting of renewable energy facilities. These investments may include grants to enable local governments to participate in regional energy and conservation planning pursuant to the Natural Communities Conservation Planning Act, (Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code), Chapter 10 of the Statutes of the 2011–12 First Extraordinary Session, and other applicable laws. These investments may also include the development of model permitting applications and ordinances for distributed generation facilities and other measures that facilitate efficient and cost-effective development of renewable energy.
(2) Notwithstanding Section 2851 of the Public Utilities Code, the funds collected pursuant to Section 399.8 of the Public Utilities Code and used for the California Solar Initiative pursuant to paragraph (3) of subdivision (e) of Section 2851 of the Public Utilities Code shall be supervised by the Public Utilities Commission. The Public Utilities Commission shall supervise the program according to guidelines established by the commission pursuant to this chapter. The commission shall adopt and update New Solar Home Partnership guidelines and rebate levels as needed.
(3) (A) The New Solar Home Partnership shall continue to be administered according to guidelines established by the commission pursuant to Chapter 8.6 (commencing with Section 25740) and Chapter 8.8 (commencing with Section 25780). The commission shall adopt and update the New Solar Homes Partnership program guidelines and rebate levels as needed to ensure that the New Solar Homes Partnership funding does all of the following:
(i) Includes solar hot water heating.
(ii) Gives priority to new housing developments in economically distressed and disadvantaged communities.
(iii) Seeks to provide no less than 25 percent of the funds collected for the NSHP to be expended for multifamily units and rental dwellings.
(iv) Seeks to provide no less than 25 percent of the funds collected for the NSHP shall be expended in disadvantaged communities.
(v) Provides for increased accountability, a streamlined application process.
(B) This paragraph does not prevent New Solar Home Partnerships funds from being allocated to otherwise eligible New Solar Home Partnerships projects if the designated categories are not reserved annually.
(4) Funds collected through the renewable energy public goods charge for the support of the New Solar Homes Partnership shall be allocated and administered pursuant to Section 25744.6.
(5) Within 90 days of the enactment of the act adding this section during the first year of the 2011–12 Regular Session, the commission shall establish and impose project costs caps for residential and nonresidential projects under the New Solar Home Partnership, based on national and state installed cost data.
(g) The commission shall, in coordination with other state entities, periodically analyze the renewable technology market and workforce trends and identify barriers to renewable energy industry development in the state.
(h) The commission and the Office of Planning and Research shall coordinate with state and local environmental regulators to identify regulatory barriers that prevent or delay implementation of renewable energy and energy efficiency projects.
(i) (1) The commission shall develop and adopt an annual investment plan to establish priority activities for the program to achieve the goals of this section and describe how funding will complement but not duplicate existing public and private investments, including existing state programs that further the goals of this section.
(2)  On or before March 15, 2012, and annually thereafter, the commission shall submit a draft of a multiyear investment plan, in accordance with paragraph (1) and including the upcoming fiscal year to all relevant policy and fiscal committees of the Legislature. The intent of this requirement is to ensure legislative oversight of the program and provide to the Legislature all of the information necessary to fully understand the manner in which funds are to be allocated and prioritized within the program.
(j) The commission shall create and consult with an advisory body to work with the commission as it develops the investment plan pursuant to subdivision (g). The advisory body shall be subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code). The commission shall, at a minimum, hold at least two annual public hearings on the advisory body’s recommendations on the commission’s proposed investment plan prior to the commission’s consideration and approval of the investment plan.
(k) Membership of the advisory body created pursuant to subdivision (h) shall include, but is not limited to, representatives of investor-owned utilities, the Public Utilities Commission and the Independent System Operator, clean energy businesses and investors, local governments, building industries, labor organizations, environmental groups, environmental justice groups, ratepayer groups, business associations, and research and technical experts. The advisory body shall meet at least twice annually to provide strategic and technical guidance.
(l) The commission shall submit an annual report to the Legislature that highlights and explains the rationale for any year-to-year changes to the commission’s activity strategy and priorities, particularly with respect to specific demonstration programs or policy initiatives.
(m) It is the intent of the Legislature that submission of the draft investment plan, along with timely notification of modifications to the investment plan thereafter, as reported in the commission’s annual reports to the Legislature, will ensure legislative oversight of the program and provide the Legislature with all of the necessary information to fully understand how and why funds are to be allocated and prioritized within the program.
(n) The commission may make a single source or sole source award pursuant to this section. The same requirements set forth in former Section 25620.5, as described in paragraph (3), shall apply to awards made on a single source basis or a sole source basis.
(o) (1) Notwithstanding any other provision of law, moneys collected for renewable energy pursuant to Article 15 (commencing with Section 399) of Chapter 2.3 of Part 1 of Division 1 of the Public Utilities Code shall be transferred to the Renewable Resource Trust Fund.
(2) Moneys collected on and after January 1, 2012, and before January 1, 2020, shall be used for the purposes specified in this section.
(3) Moneys collected on and after January 1, 2007, and before January 1, 2012, shall be expended in accordance with former Section 25740.5 and former Sections 25742 to 25751, inclusive, as those former sections read on the day before the date that the act adding this section was enacted during the first year of the 2011–12 Regular Session.

SEC. 4.

 Section 25743 of the Public Resources Code is repealed.

SEC. 5.

 Section 25744 of the Public Resources Code is amended to read:

25744.
 (a) Seventy-nine percent of the money collected pursuant to the renewable energy public goods charge on and after January 1, 2007, and before January 1, 2012, shall be used for a multiyear, consumer-based program to foster the development of emerging renewable technologies in distributed generation applications.
(b) Any funds used for emerging technologies pursuant to this section shall be expended in accordance with this chapter, subject to all of the following requirements:
(1) Funding for emerging technologies shall be provided through a competitive, market-based process that is in place for a period of not less than five years, and is structured to allow eligible emerging technology manufacturers and suppliers to anticipate and plan for increased sale and installation volumes over the life of the program.
(2) The program shall provide monetary rebates, buydowns, or equivalent incentives, subject to paragraph (3), to purchasers, lessees, lessors, or sellers of eligible electricity generating systems. Incentives shall benefit the end-use consumer of renewable generation by directly and exclusively reducing the purchase or lease cost of the eligible system, or the cost of electricity produced by the eligible system. Incentives shall be issued on the basis of the rated electrical generating capacity of the system measured in watts, or the amount of electricity production of the system, measured in kilowatthours. Incentives shall be limited to a maximum percentage of the system price, as determined by the commission. The commission may establish different incentive levels for systems based on technology type and system size, and may provide different incentive levels for systems used in conjunction with energy-efficiency measures.
(3) Eligible distributed emerging technologies are fuel cell technologies that utilize renewable fuels, including fuel cell technologies with an emission profile equivalent or better than the State Air Resources Board 2007 standard, and that serve as backup generation for emergency, safety, or telecommunications systems. Eligible renewable fuels may include wind turbines of not more than 50 kilowatts rated electrical generating capacity per customer site and other distributed renewable emerging technologies that meet the emerging technology eligibility criteria established by the commission and are not eligible for rebates, buydowns, or similar incentives from any other commission or Public Utilities Commission program. Eligible electricity generating systems are intended primarily to offset part or all of the consumer’s own electricity demand, including systems that are used as backup power for emergency, safety, or telecommunications, and shall not be owned by local publicly owned electric utilities, nor be located at a customer site that is not receiving distribution service from an electrical corporation that is subject to the renewable energy public goods charge and contributing funds to support programs under this chapter. All eligible electricity generating system components shall be new and unused, shall not have been previously placed in service in any other location or for any other application, and shall have a warranty of not less than five years to protect against defects and undue degradation of electrical generation output. Systems and their fuel resources shall be located on the same premises of the end-use consumer where the consumer’s own electricity demand is located, and all eligible electricity generating systems shall be connected to the utility grid, unless the system purpose is for backup generation used in emergency, safety, or telecommunications in California. The commission may require eligible electricity generating systems to have meters in place to monitor and measure a system’s performance and generation. Only systems that will be operated in compliance with applicable law and the rules of the Public Utilities Commission shall be eligible for funding.
(4) The commission shall limit the amount of funds available for a system or project of multiple systems and reduce the level of funding for a system or project of multiple systems that has received, or may be eligible to receive, any government or utility funds, incentives, or credit.
(5) In awarding funding, the commission may provide preference to systems that provide tangible demonstrable benefits to communities with a plurality of minority or low-income populations.
(6) In awarding funding, the commission shall develop and implement eligibility criteria and a system that provides preference to systems based upon system performance, taking into account factors, including shading, insulation levels, and installation orientation.
(7) At least once annually, the commission shall publish and make available to the public a statement on the balance of funds available for emerging renewable energy resources for rebates, buydowns, and other incentives for the purchase of these resources.
(c) Any funds for photovoltaic or solar thermal electric technologies shall be awarded in compliance with Chapter 8.8 (commencing with Section 25780), and not with this section.

SEC. 6.

 Section 25744.5 of the Public Resources Code is repealed.

SEC. 7.

 Section 25744.7 is added to the Public Resources Code, to read:

25744.7.
 (a) The commission shall adopt guidelines governing the funding programs authorized under this section and Section 25740.6, as specified in, and subject to, Section 25747.
(b) Funds to further the purposes of this section and Section 25740.6 may be committed for multiple years.
(c) The commission may award funding under this section and Section 25740.6 in the form of contracts, grants and loans, and other funding or financing mechanisms identified by the commission. Any actions taken by an applicant to apply for, or to become or remain eligible to receive, grant or loan payments or awards shall not constitute the rendering of goods, services, or a direct benefit to the commission.
(d) An award made pursuant to this section and Section 25740.6, the amount of the award, and the terms and conditions of the award are public information.
(e) The commission shall report to the Legislature on or before January 31, 2013, and annually thereafter, regarding the results of the mechanisms funded pursuant to this section and Section 25740.6. The report shall contain all of the following:
(1) A description of the allocation of funds.
(2) The status of any repayments.
(3) A description of the cumulative commitment of awards, the relative demand for funds, and a forecast of future awards.
(4) A discussion of the progress being made toward achieving the targets established under Section 25740 through funding provided pursuant to this section and Section 25740.6.
(5) A description of the allocation of funds from interest earnings.
(6) An itemized list, including project descriptions, award amounts, and outcomes for projects awarded funding in the prior year.
(f) An existing biomass electricity-generating facility shall not be eligible for funding in the form of electricity production incentives under this section and Section 25740.6 unless it meets other requirements specified in the commission’s investment plan and applicable guidelines.
(g) A small-scale distributed electricity-generating facility using wind resources or a fuel cell system using renewable fuels shall not be eligible for funding in the form of rebates, buy-downs, or equivalent incentives under this section and Section 25740.6 unless the emerging technology being funded satisfies the requirements under paragraph (3) of subdivision (b) of Section 25744 and meets other requirements specified in the commission’s investment plan and applicable guidelines.
(h) That portion of revenues collected by electrical corporations for the benefit of renewable energy, pursuant to Section 399.8 of the Public Utilities Code, shall be transmitted to the commission at least quarterly for deposit in the Renewable Resource Trust Fund, which is hereby established in the State Treasury, for the purposes specified in Section 25740.6. After setting aside in the fund money that may be needed for expenditures authorized by the annual Budget Act in accordance with subdivision (i), the Treasurer shall immediately deposit money received pursuant to this section into the Renewable Resource Trust Fund.
(i) The money in the Renewable Resource Trust Fund may be expended, only upon appropriation by the Legislature in the annual Budget Act, for the purposes of this chapter.

SEC. 8.

 Section 25746 of the Public Resources Code is repealed.

SEC. 9.

 Section 25751 of the Public Resources Code is repealed.

SEC. 10.

 Section 384 of the Public Utilities Code is amended to read:

384.
 (a) Funds transferred to the Energy Commission pursuant to this article for purposes of public interest research, development, and demonstration that are collected prior to January 1, 2012, shall be transferred to the Public Interest Research, Development, and Demonstration Fund, which is hereby created in the State Treasury, to be available for expenditure pursuant to Chapter 7.1 (Commencing with Section 25620) of Division 15 of the Public Resources Code. Funds collected, on and after January 1, 2012, for those purposes shall be transferred to the Clean Energy Innovation Program Fund, which is hereby created in the State Treasury to be available, upon appropriation, for expenditure pursuant to Article 2 (commencing with Section 25621.10) of Chapter 7.2 of Division 15 of the Public Resources Code. The fund is a trust fund and shall contain money from all interest, repayments, disencumbrances, royalties, and any other proceeds appropriated, transferred, or otherwise received for purposes pertaining to public interest research, development, and demonstration. Any appropriations that are made from the fund shall have an encumbrance period of not longer than two years, and a liquidation period of not longer than four years.
(b) The Energy Commission shall report annually to the appropriate budget committees of the Legislature on any encumbrances or liquidations that are outstanding at the time the Energy Commission’s budget is submitted to the Legislature for review.

384.

(a)The Clean Energy Innovation Program Fund is hereby created in the State Treasury to be available, upon appropriation by the Legislature, for expenditure pursuant to Article 2 (commencing with Section 25261.10) of Chapter 7.2 of Division 15 of the Public Resources Code. Funds collected from the utilities before January 1, 2012, shall be transferred to the Energy Commission’s Public Interest Research, Development, and Demonstration Wrap-Up Account, which is hereby created in the Clean Energy Innovation Program Fund, to be available, upon appropriation by the Legislature, for expenditure pursuant to Chapter 7.1 (commencing with Section 25620) of Division 15 of the Public Resources Code. Funds collected from the utilities on and after January 1, 2012, shall be transferred to the Clean Energy Innovation Program Fund. These are trust funds and shall contain money from all interest, repayments, disencumbrances, royalties, and any other proceeds appropriated, transferred, or otherwise received for purposes pertaining to public interest research, development, and demonstration. Any appropriations that are made from the fund shall have an encumbrance period of not longer than two years, and a liquidation period of not longer than four years.

(b)The State Energy Resources Conservation and Development Commission shall report annually to the appropriate budget committees of the Legislature on any encumbrances or liquidations that are outstanding at the time the commission’s budget is submitted to the Legislature for review.

SEC. 11.

 Section 399.8 of the Public Utilities Code is amended to read:

399.8.
 (a) In order to ensure that the citizens of this state continue to receive safe, reliable, affordable, and environmentally sustainable electric service, it is the policy of this state and the intent of the Legislature that prudent investments in energy efficiency, renewable energy, and research, development and demonstration shall continue to be made.
(b) (1) Every customer of an electrical corporation shall pay a nonbypassable system benefits charge authorized pursuant to this article. The system benefits charge shall fund energy efficiency, renewable energy, and research, development and demonstration.
(2) Local publicly owned electric utilities shall continue to collect and administer system benefits charges pursuant to Section 385.
(c) (1) The commission shall require each electrical corporation to identify a separate rate component to collect revenues to fund energy efficiency, renewable energy, and research, development and demonstration programs authorized pursuant to this section beginning January 1, 2012 2002, and ending January 1, 2020. The rate component shall be a nonbypassable element of the local distribution service and collected on the basis of usage.
(2) This rate component may not exceed, for any tariff schedule, the level of the rate component that was used to recover funds authorized pursuant to Section 381 on January 1, 2011. If the amounts specified in paragraph (1) of subdivision (d) are not recovered fully in any year, the commission shall reset the rate component to restore the unrecovered balance, provided that the rate component may not exceed, for any tariff schedule, the level of the rate component that was used to recover funds authorized pursuant to Section 381 on January 1, 2011. Pending restoration, any annual shortfalls shall be allocated pro rata among the three funding categories in the proportions established in paragraph (1) of subdivision (d).
(3) (A) Moneys collected pursuant to this section on or before January 1, 2012, shall be expended for the purposes of Article 2 (commencing with Section 26520.10) of Chapter 7.2 of Division 15 of the Public Resources Code, Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code, and Chapter 12 (commencing with Section 2120).
(B) If the Legislature finds that moneys collected pursuant to this section on or after January 1, 2012, are used for purposes other than those specified in subparagraph (A), the collection of the nonbypassable system benefits charge pursuant to this section shall cease at the end of the calendar year in which the Legislature made that finding.
(d) (1) The commission shall order San Diego Gas and Electric Company, Southern California Edison Company, and Pacific Gas and Electric Company to collect these funds commencing on January 1, 2012 2002 and ending on December 31, 2011, as follows:

(1)Two hundred fifty million dollars ($250,000,000) per year in total for energy efficiency and conservation activities, seventy-five million dollars ($75,000,000) in total per year for renewable energy, and seventy-five million dollars ($75,000,000) in total per year for research, development and demonstration.

(A) Two hundred twenty-eight million dollars ($228,000,000) in total per year for energy efficiency and conservation activities, sixty-five million five hundred thousand dollars ($65,500,000) in total per year for renewable energy, and sixty-two million five hundred thousand dollars ($62,500,000) in total per year for research, development, and demonstration.

(2)

(B) The amounts shall be adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by the gross domestic product deflator.
(2) The commission shall order San Diego Gas and Electric Company, Southern California Edison, and Pacific Gas and Electric Company to collect these funds commencing on January 1, 2012, as follows:
(A) Two hundred fifty million dollars ($250,000,000) in total per year for energy efficiency and conservation activities, seventy-five million dollars ($75,000,000) in total per year for renewable energy, and seventy-five million dollars ($75,000,000) in total per year for research, development, and demonstration.
(B) The amounts shall be adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by the gross domestic product deflator.
(e) The commission shall ensure that each electrical corporation allocates funds transferred by the Energy Commission pursuant to subdivision (b) of Section 25743 in a manner that maximizes the economic benefit to all customer classes that funded the New Renewable Resources Account.
(f) The commission and the Energy Commission shall retain and continue their oversight responsibilities as set forth in Sections 381 and 383, and Chapter 7.1 (commencing with Section 25620) and Chapter 8.6 (commencing with Section 25740) of Division 15 of the Public Resources Code.
(g) An applicant for the Large Nonresidential Standard Performance Contract Program funded pursuant to paragraph (1) of subdivision (b) and an electrical corporation shall promptly attempt to resolve disputes that arise related to the program’s guidelines and parameters prior to entering into a program agreement. The applicant shall provide the electrical corporation with written notice of any dispute. Within 10 business days after receipt of the notice, the parties shall meet to resolve the dispute. If the dispute is not resolved within 10 business days after the date of the meeting, the electrical corporation shall notify the applicant of his or her right to file a complaint with the commission, which complaint shall describe the grounds for the complaint, injury, and relief sought. The commission shall issue its findings in response to a filed complaint within 30 business days of the date of receipt of the complaint. Prior to issuance of its findings, the commission shall provide a copy of the complaint to the electrical corporation, which shall provide a response to the complaint to the commission within five business days of the date of receipt. During the dispute period, the amount of estimated financial incentives shall be held in reserve until the dispute is resolved.
(h) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 12.

 Section 399.8.5 is added to the Public Utilities Code, to read:

399.8.5.
 (a) It is the intent of the Legislature that the New Solar Homes Partnership established under paragraph (3) of subdivision (e) of Section 2851 continue to meet the solar energy system goals established in Section 25710 of the Public Resources Code and Section 2851.
(b) The Energy Commission shall, in consultation with the commission, determine the reasonable portion of the seventy-five million dollars ($75,000,000) collected for renewable energy programs pursuant to paragraph (1) of subdivision (d) of Section 399.8 that shall be necessary to support the New Solar Homes Partnership program in accordance with the expenditure requirements of paragraph (3) of subdivision (e) of Section 2851 as follows:
(1) In 2012 and 2013, the annual amount for the New Solar Homes Partnership shall be twenty-five million dollars ($25,000,000), collected and administered by San Diego Gas and Electric Company, Southern California Edison Company, and Pacific Gas and Electric Company.
(2) In 2013, for the years 2014 to 2016, inclusive, the Energy Commission shall recommend an annual amount for the New Solar Homes Partnership program, considering factors such as past and projected new housing market demand and conditions, while balancing the other goals of the Renewable Resource Trust Fund.
(c) After receiving the determination from the Energy Commission, the commission shall conduct an expedited proceeding to evaluate the funding requirements for the years 2014 to 2016, inclusive, and order San Diego Gas and Electric Company, Southern California Edison Company, and Pacific Gas and Electric Company to collect and administer the funding amounts for the New Homes Solar Partnership established under paragraph (3) of subdivision (e) of Section 2851 through December 31, 2016.

SEC. 13.

 Section 739 of the Public Utilities Code is amended to read:

739.
 (a) As used in this section:
(1) “Baseline quantity” means a quantity of electricity or gas allocated by the commission for residential customers based on from 50 to 60 percent of average residential consumption of these commodities, except that, for residential gas customers and for all-electric residential customers, the baseline quantity shall be established at from 60 to 70 percent of average residential consumption during the winter heating season. In establishing the baseline quantities, the commission shall take into account climatic and seasonal variations in consumption and the availability of gas service. The commission shall review and revise baseline quantities as average consumption patterns change in order to maintain these ratios. In setting summer baseline quantities, the commission shall set the baseline based on the warmest 4 months, unless the commission finds that the longer period is more equitable for that climate region.
(2) “Residential customer” means those customers receiving electrical or gas service pursuant to a domestic rate schedule and excludes industrial, commercial, and every other category of customer.
(b) The commission shall designate a baseline quantity of gas and electricity which that is necessary to supply a significant portion of the reasonable energy needs of the average residential customer. In estimating those quantities, the commission shall take into account differentials in energy needs between customers whose residential energy needs are currently supplied by electricity alone or by both electricity and gas. The commission shall develop a separate baseline quantity for all-electric residential customers. For these purposes, “all-electric residential customers” are residential customers having electrical service only or whose space heating is provided by electricity, or both. The commission shall also take into account differentials in energy use by climatic zone and season.
(c) (1) The commission shall establish a standard limited allowance which that shall be in addition to the baseline quantity of gas and electricity for residential customers dependent on life-support equipment, including, but not limited to, emphysema and pulmonary patients. A residential customer dependent on life-support equipment shall be allocated a higher energy allocation than the average residential customer.
(2) “Life-support equipment” means that equipment which that utilizes mechanical or artificial means to sustain, restore, or supplant a vital function, or mechanical equipment which that is relied upon for mobility both within and outside of buildings. “Life-support equipment,” as used in this subdivision, includes all of the following: all types of respirators, iron lungs, hemodialysis machines, suction machines, electric nerve stimulators, pressure pads and pumps, aerosol tents, electrostatic and ultrasonic nebulizers, compressors, IPPB machines, and motorized wheelchairs.
(3) The limited allowance specified in this subdivision shall also be made available to paraplegic and quadriplegic persons in consideration of the increased heating and cooling needs of those persons.
(4) The limited allowance specified in this subdivision shall also be made available to multiple sclerosis patients in consideration of the increased heating and cooling needs of those persons.
(5) The limited allowance specified in this subdivision shall also be made available to scleroderma patients in consideration of the increased heating needs of those persons.
(6) The limited allowance specified in this subdivision shall also be made available to persons who are being treated for a life-threatening illness or have a compromised immune system, if a licensed physician and surgeon or a person licensed pursuant to the Osteopathic Initiative Act certifies in writing to the utility that the additional heating or cooling allowance, or both, is medically necessary to sustain the life of the person or prevent deterioration of the person’s medical condition.
(d) (1) The commission shall require that every electrical and gas corporation file a schedule of rates and charges providing baseline rates. The baseline rates shall apply to the first or lowest block of an increasing block rate structure which that shall be the baseline quantity. In establishing these rates, the commission shall avoid excessive rate increases for residential customers, and shall establish an appropriate gradual differential between the rates for the respective blocks of usage.
(2) In establishing residential electric and gas rates, including baseline rates, the commission shall ensure that the rates are sufficient to enable the electrical corporation or gas corporation to recover a just and reasonable amount of revenue from residential customers as a class, while observing the principle that electricity and gas services are necessities, for which a low affordable rate is desirable and while observing the principle that conservation is desirable in order to maintain an affordable bill.
(3) At least until December 31, 2003, the commission shall require that all charges for residential electric customers are volumetric, and shall prohibit any electrical corporation from imposing any charges on residential consumption that are independent of consumption, unless those charges are in place prior to April 12, 2001.
(e) (1) Each electrical corporation and each gas corporation shall, in a timeframe consistent with each electrical and gas corporation’s next general rate case, disclose on the billing statement of a residential customer all of the following:
(A) Cost per kilowatthour or gas therm per tier.
(B) Allocation of kilowatthour or gas therm per tier.
(C) Visual representation of usage and cost per tier.
(D) Usage comparison with prior periods.
(E) Itemized cost components in the bill to identify state and local taxes.
(F) Identification of delivery, generation, public purpose, and other charges.
(G) Contact information for the commission’s Consumer Affairs Branch.
(2) An electrical corporation and a gas corporation shall make available online to residential customers both of the following:
(A) Examples of how conservation measures, including changing thermostat settings and turning off unused lights, could reduce energy usage and costs.
(B) Examples of how energy-saving devices and weatherization measures could reduce energy usage and costs.
(3) The commission may modify, adjust, or add to the requirements of this subdivision as the individual circumstances of each electrical corporation or gas corporation merits, or for master-meter customers, as individual circumstances merit.
(4) The commission shall, as part of the general rate case of an electrical corporation or gas corporation, assess opportunities to improve the quality of information contained in the utility’s periodic billings.
(f) Wholesale electrical or gas purchases, and the rates charged therefor for those purchases, are exempt from this section.
(g) Nothing contained in this section shall be construed to prohibit experimentation with alternative gas or electrical rate schedules for the purpose of achieving energy conservation.

SEC. 13.SEC. 14.

 Chapter 12 (commencing with Section 2120) is added to Part 1 of Division 1 of the Public Utilities Code, to read:
CHAPTER  12. Investment in Energy Efficiency Retrofits

2120.
 (a) The commission shall implement the following elements and principles for the state’s investments in energy efficiency retrofits pursuant to this chapter and Sections 399.4, 399.8, and 454.5.
(b) The commission, in evaluating energy efficiency investments under its existing statutory authority, shall do all of the following:
(1) Maximize in-state job development with an emphasis on job creation and economic development in disadvantaged communities and communities with high rates of unemployment.
(2)  Create and expand financing mechanisms that produce long-term benefits and that can become self-sustaining over time.
(3) Ensure that moneys collected by an electrical corporation are expended to provide financial investment tools to the ratepayers of that electrical corporation. This section does not prohibit expenditure of program funds to subsidize the manufacture, distribution of the wholesale or retail stocking of efficient appliances, or the provision of appliance rebates from retail outlets within the service territory of an electrical corporation.
(4) Maximize the participation of energy users and the achievement of energy efficiency savings.
(5) Coordinate with state and local agencies to identify and address any regulatory barriers that may prevent or delay implementation of energy efficiency improvements.
(c) It is the intent of the Legislature that, to the extent practicable, the commission shall adopt definitions of “cost effective” for the energy efficiency program participants consistent with other state and federal definitions.
(d) Funds collected pursuant to Section 399.8 and allocated to energy efficiency programs, consistent with subparagraph (C) of paragraph (9) of subdivision (b) of Section 454.5, shall be used to invest in and leverage resources for energy efficiency retrofits. The funds used pursuant to this section shall be targeted to do any of the following:
(1) Achieve the goals in Sections 399.4 and 399.8, subparagraph (C) of paragraph (9) of subdivision (b) of Section 454.5, the scoping plan adopted pursuant to Section 38561 of the Health and Safety Code, Chapter 470 of the Statutes of 2009, Chapter 496 of the Statutes of 2010, the commission’s energy efficiency goals and policies, and other state energy efficiency policies.
(2) Maximize energy savings, job creation, and economic development by establishing financing mechanisms that leverage funds provided pursuant to this chapter to the maximum extent feasible, encourage significant private investments in energy efficiency, operate in coordination with other energy efficiency and clean energy programs, and seek to achieve lasting market transformation and sustainability and maximize participation in cost-effective energy saving retrofits.
(3) Develop and adopt financial investment tools for comprehensive energy retrofits in coordination with other commission and utility efficiency programs and consistent with guidelines adopted pursuant to Chapter 470 of the Statutes of 2009 and in a manner that leverages ratepayer funds to the maximum extent feasible and is cost effective to increase investment in energy efficiency where appropriate in a manner that will ensure that the investments produce energy savings.
(4) Ensure opportunities for low- and moderate-income households, including multifamily households, and economically disadvantaged communities to participate in financial investment tools for comprehensive energy efficiency retrofits, and include preferences for programs and program providers in economically disadvantaged communities in coordination with those services made available pursuant to Sections 739 and 2790.
(5) Coordinate with other energy efficiency programs, including low-income energy efficiency and weatherization programs, including those administered by other state and local agencies and community-based organizations, to maximize the effectiveness and efficiency of both programs.
(6) Increase participation in energy efficiency financing and implementation by independent third-party energy efficiency service providers, including, but not limited to, local and regional government energy offices, nonprofit organizations, California Conservation Corps, community organizations such as conservation corps and youth corps, small businesses, and minority-, women-, and disabled veteran-owned businesses.
(7) Coordinate with the Clean Energy Innovation Program to ensure that proven new technologies are integrated into program implementation.
(8) Require independent evaluation, measurement, and verification consistent with requirements established pursuant to Chapter 470 of the Statutes of 2009.
(9) Utilize market analyses, pilot programs, and commercialization strategies to support development of financial investment tools and to best achieve the objectives of this chapter.
(10) Improve coordination among federal, state, local, and private programs to mobilize investment in energy efficiency and efficiency retrofits and to eliminate duplication.
(e) The commission shall develop or authorize financing mechanisms consistent with this section that are appropriate for individual market segments in coordination with the Energy Commission.
(f) The commission shall establish a standard for what constitutes cost-effective energy efficiency retrofits to ensure that the benefits of energy efficiency retrofits exceed their cost.
(g)  The commission shall ensure that ratepayer investments in cost-effective energy efficiency retrofits are accountable and transparent by doing each of the following:
(1) Making data publicly available while maintaining customer privacy in a manner that provides sufficient information to ascertain the total program costs and benefits, typical installed cost of energy efficiency measures where appropriate, the amount of expected energy savings over the life of the retrofit measure or program compared to the incentive and other expenditures incurred, the geographic distribution of projects where appropriate, the type of measures deployed in each electrical corporation’s service area, and the performance of energy efficiency measures for the utility service area individually or collectively as appropriate.
(2) Verifying energy demand reductions by region and assess progress toward meeting energy efficiency goals, and ensuring that consumer information is made publicly available to assist customers in finding licensed contractors, if a licensed contractor is required, and energy efficiency measures, and understanding the cost and benefits of energy efficiency measures, their energy bills, and the costs and benefits of various means of financing energy efficiency measures.
(3) Making all contract bidding opportunities publicly available, including contracts administered by electrical corporations or third-party administrators, and ensuring that small businesses and minority-, women-, and disabled veteran-owned businesses are afforded full opportunities to participate during the contract bidding process.
(4) Ensuring that major products of all consultant contracts of the commission are made available in a timely manner on the commission’s Internet Web site.
(h) The commission shall, in coordination with the Energy Commission and consistent with Chapter 470 of the Statutes of 2009, adopt measurable goals and performance standards for each financing mechanism. Financial assistance shall be limited to no more than the amount deemed cost effective pursuant to this chapter.
(i) The commission shall convene a stakeholder advisory committee no fewer than two times annually to provide technical and strategic guidance for the development and administration of energy efficiency financing programs developed pursuant to this section. The committee shall include representatives of the investor-owned utilities, the Energy Commission, commercial and residential building industry, existing building owners and managers, labor, representatives of energy consumer organizations including agricultural energy users, customers, and other end users, energy efficiency investors, technology companies, building industry, installers, local governments, commercial real estate industry, labor, diverse environmental groups, including environmental justice groups, commercial building owners and managers, the office of the Treasurer, the California Public Employees’ Retirement System, and other entities, as appropriate.
(j) The commission shall authorize funding in a manner that provides opportunities for all customer sectors to participate, including, but not limited to, residential single family and multifamily, commercial and small business, agriculture and food processing, public buildings owned by state or local governments or special assessment and school districts, and industrial entities.
(1) In developing and expanding financial investment tools for energy efficiency retrofits in commercial buildings, the commission should consider the unique challenges related to energy retrofits in commercial buildings, including length of payback, access to capital, allocation of costs between tenants and owners, and related issues.
(2) The commission shall analyze and determine the most effective means to increase cost-effective investment in residential energy efficiency retrofits, including local and regional, public and private, financing mechanisms to reduce the cost of capital and leverage public funds to the maximum extent practicable. This evaluation shall be used to prioritize the adoption of financial investment tools for residential energy efficiency retrofits pursuant to Section 399.8 and other provisions as appropriate.
(3) The commission shall evaluate and authorize financial investment tools to finance comprehensive energy efficiency retrofits of public buildings. This evaluation shall be used to prioritize the adoption of financial investment tools for public building energy efficiency retrofits pursuant to Section 399.8 and other provisions as appropriate.
(4) The commission shall consider factors such as an administrator’s potential for fostering innovation and market transformation, minimizing administrative costs, and achieving scales that can maximize participation and lower overall ratepayer costs. The commission shall ensure that all administrators and providers are held to the same standards of performance and accountability.
(k) The commission shall encourage local government participation in, and administration of, public building retrofit financing programs. For purposes of this subdivision, local governments include local and regional energy offices, joint powers authorities, special assessment districts, local government councils and associations, and other local government entities. The commission shall coordinate with the office of the Treasurer, the Energy Commission, electrical corporations, and local governments to identify the most appropriate and suitable local and regional government administrators.
(l) The commission shall consider authorizing a program to encourage the replacement of diesel agricultural water pumps with electric pumps similar to the program administered by Pacific Gas and Electric Company and Southern California Edison under the commission’s Decision D.05-06-016.

(l)

(m) Funds collected pursuant to Section 399.8 and allocated for energy efficiency that are subject to the requirements of this section shall be supervised by the commission.

SEC. 14.SEC. 15.

 In implementing this act, the public goods charge collected on or before December 31, 2011, pursuant to Section 399.8 of the Public Utilities Code to fund renewable energy shall be expended pursuant to the provisions of law that are in effect the day before the effective date of this act. The public goods charge collected for this purpose on and after January 1, 2012, shall be expended pursuant to the law in effect on and after the effective date of this act.

SEC. 15.SEC. 16.

 This act shall not become operative unless Senate Bill 870 of the 2011–12 Regular Session of the Legislature is enacted on or before January 1, 2012.

SEC. 16.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. 17.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 Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to improve the environment, it is necessary that this act take effect immediately.
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