08/20/19 01:52 PM RN 19 20440 PAGE 1 Substantive AMENDMENTS TO ASSEMBLY BILL NO. 235 AS AMENDED IN ASSEMBLY APRIL 30, 2019 Amendment 1 In the heading, in line 1, strike out ?Member Mayes? and insert: Members Mayes, Bonta, and Irwin Amendment 2 In the heading, below line 1, insert: (Principal coauthor: Senator Bradford) (Coauthors: Assembly Members Gipson, Gray, and Quirk) Amendment 3 In the title, strike out lines 1 to 3, inclusive, and insert: An act to amend Sections 63010, 63025.1, 63041.5, 63042, 63049.64, and 63071 of the Government Code, and to add Article 15 (commencing with Section 925) to Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, relating to electricity. Amendment 4 On page 3, before line I, insert: SECTION 1. The Legislature ?nds and declares all of the following: The 2017 and 2018 wild?res were among the worst disasters in California?s history, and the effects of these blazes continue to impact victims months, and, in some cases, years after the ?nal flames were extinguished. It is the intent of the Legislature to provide a mechanism that would provide fair and timely compensation to these victims, while holding those responsible for the blazes accountable for their actions. Compensating the victims of the 2017 and 2018 wild?res is a responsibility that cannot be placed on the backs of California?s electricity customers. It is the intent of the Legislature, in enacting this act, that ratepayers are shielded from any and all economic burdens associated with the 2017 and 2018 wild?res. Therefore, the Legislature also declares that the Public Utilities Commission should not approve an increased cost of capital recovery from ratepayers above historic levels in conjunction with the approval of wild?re recovery bonds. It is also the intent of the Legislature that the Public Utilities Commission will utilize the proper oversight tools to guarantee that shareholders alone bear the economic burden of settling claims resulting from an electrical corporation?s imprudent behavior through a reduction in its corporate pro?ts and that there are no net impacts to customer bills. Ratepayers should not bear the economic burden of imprudent actions by an electrical corporation, nor should they bear the economic burden to pay victims RN192 044D 08/20/19 01:52 PM RN 19 20440 PAGE 2 Substantive of the 2017 or 2018 wild?res where the funding mechanism authorized by this act is used. It is the intent of the Legislature to enact wild?re recovery bonds as a mechanism that would ensure corporate pro?ts, and not ratepayer dollars, bear the economic burden of compensating victims. Further, the wild?re recovery bonds are the mechanism ensuring that victims of the 2017 and 2018 wild?res receive timely compensation following agreed upon settlements of their claims. Fair and timely settlement of wild?re victims? claims will also ensure these electrical corporations continue to honor existing labor agreements and clean energy commitments and continue progress toward California?s bold clean energy goals. t) On the heels of the recent passage of Assembly Bill 1054 (Chapter 79 of the Statutes of 2019), which put the state on a path to a safer and more resilient energy future, it is the Legislature?s intent to send a clear message that ratepayers will not now be forced to bear the economic burden of any utilities? past bad conduct and therefore that the Legislature intends to supersede provisions of the Public Utilities Code that consider the ?nancial status of the electrical corporation to determine the maximum amount the corporation can pay without harming ratepayers, which is no longer needed with shareholders alone bearing the economic burden of settling claims. It is, therefore, in the public interest to provide a mechanism, subject to oversight by the Public Utilities Commission, that will promote timely compensation for 2017 and 2018 wild?re victims, while ensuring that electrical corporation shareholders, and not ratepayers, bear the economic burden of funding this compensation. This aim is consistent with the priorities outlined by the Legislature in Assembly Bill 1054 and will allow California to continue making progress toward addressing the threat of wild?res in the years to come. SEC. 2. Section 63010 of the Government Code is amended to read: 63010. For purposes of this division, the following words and terms shall have the following meanings unless the context clearly indicates or requires another or different meaning or intent: ?Act? means the Bergeson-Peace Infrastructure and Economic Development Bank Act. ?Bank? means the California Infrastructure and Economic Development Bank. ?Board? or ?bank board? means the Board of Directors of the California Infrastructure and Economic Development Bank. ?Bond purchase agreement? means a contractual agreement executed between the bank and a sponsor, or a special purpose trust authorized by the bank or a sponsor, or both, whereby the bank or special purpose trust authorized by the bank agrees to purchase bonds of the sponsor for retention or sale. ?Bonds? means bonds, including structured, senior, and subordinated bonds or other securities; loans; notes, including bond, revenue, tax, or grant anticipation notes; commercial paper; floating rate and variable maturity securities; and any other evidences of indebtedness or ownership, including certi?cates of participation or bene?cial interest, asset backed certi?cates, or lease-purchase or installment purchase agreements, whether taxable or excludable from gross income for federal income taxation purposes. 08/20/19 01:52 PM RN 19 20440 PAGE 3 Substantive If) ?Wild?re Fund? means the Wild?re Fund created pursuant to Section 3284 of the Public Utilities Code. Lg) ?Cost,? as applied to a project or portion thereof ?nanced under this division, means all or any part of the cost of construction, renovation, and acquisition of all lands, structures, real or personal property, rights, franchises, licenses, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which the buildings or structures may be moved; the cost of all machinery, equipment, and ?nancing charges; interest prior to, during, and for a period after completion of construction, renovation, or acquisition, as determined by the bank; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; and the cost of architectural, engineering, ?nancial and legal services, plans, speci?cations, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of any project or incidental to the construction, acquisition, or ?nancing of any project, and transition costs or wild?re recovery costs in the case of an electrical corporation. ?Economic development facilities? means real and personal property, structures, buildings, equipment, and supporting components thereof that are used to provide industrial, recreational, research, commercial, utility, goods movement, or service enterprise facilities, community, educational, cultural, or social welfare facilities and any parts or combinations thereof, and all facilities or infrastructure necessary or desirable in connection therewith, including provision for working capital, but shall not include any housing. (1) ?Electrical corporation? has the meaning set forth in Section 218 of the Public Utilities Code. ?Executive director? means the Executive Director of the California Infrastructure and Economic Development Bank appointed pursuant to Section 63021. (L) ?Financial assistance? in connection with a project, includes, but is not limited to, any combination of grants, loans, the proceeds of bonds issued by the bank or special purpose trust, insurance, guarantees or other credit enhancements or liquidity facilities, and contributions of money, property, labor, or other things of value, as may be approved by resolution of the board or the sponsor, or both; the purchase or retention of bank bonds, the bonds of a sponsor for their retention or for sale by the bank, or the issuance of bank bonds or the bonds of a special purpose trust used to fund the cost of a project for which a sponsor is directly or indirectly liable, including, but not limited to, bonds, the security for which is provided in whole or in part pursuant to the powers granted by Section 63025.1; bonds for which the bank has provided a guarantee or enhancement, including, but not limited to, the purchase of the subordinated bonds of the sponsor, the subordinated bonds ofa special purpose trust, or the retention of the subordinated bonds of the bank pursuant to Chapter 4 (commencing with Section 63060); or any other type of assistance deemed appropriate by the bank or the sponsor, 08/20/19 01:52 PM RN 19 20440 PAGE 4 Substantive except that no direct loans shall be made to nonpublic entities other than in connection with the issuance of rate reduction bonds pursuant to a ?nancing order or in connection with a ?nancing for an economic development facility. For purposes of this subdivision, ?grant? does not include grants made by the bank except When acting as an agent or intermediary for the distribution or packaging of ?nancing available from federal, private, or other public sources. 6k? ?Financing order? has the meaning set forth in Section 840 or 927 of the Public Utilities Code. ?Guarantee trust fund? means the California Infrastructure Guarantee Trust Fund. ?Infrastructure bank fund? means the California Infrastructure and Economic Development Bank Fund. ?Loan agreement? means a contractual agreement executed between the bank or a special purpose trust and a sponsor that provides that the bank or special purpose trust will loan funds to the sponsor and that the sponsor will repay the principal and pay the interest and redemption premium, if any, on the loan. ?Participating party? means any person, company, corporation, association, state, or municipal governmental entity, partnership, ?rm, or other entity or group of entities, whether organized for pro?t or not for pro?t, engaged in business or operations within the state and that applies for ?nancing from the bank in conjunction with a sponsor for the purpose of implementing a project. However, in the case of a project relating to the ?nancing of transition costs or the acquisition of transition property, or both, or in the case of a project relating to the ?nancing of wild?re recovery costs or the acquisition or ownership of wild?re recoverv property. or both on the request of an electrical corporation, or in connection with ?nancing for an economic development facility, or for the ?nancing of insurance claims, the participating party shall be deemed to be the same entity as the sponsor for the ?nancing. ?Project? means designing, acquiring, planning, permitting, entitling, constructing, improving, extending, restoring, ?nancing, and generally developing public development facilities or economic development facilities within the state or ?nancing transition costs or the acquisition of transition property, or both, upon approval of a ?nancing order by the Public Utilities Commission, as provided in Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code or ?nancing wild?re recovery costs or the acquisition or ownership of wild?re recovery property. or both upon approval of a ?nancing order by the Public Utilities Commission pursuant to Article 15 (commencing with Section 925) of Chapter 4 of Part 1 of Division 1 ofthe Public Utilities Code. (Q ?Public development facilities? means real and personal property, structures, conveyances, equipment, thoroughfares, buildings, and supporting components thereof, excluding any housing, that are directly related to providing the following: 08/20/19 0l:52 PM RN 19 20440 PAGE 5 Substantive (1) ?City streets? including any street, avenue, boulevard, road, parkway, drive, or other way that is any of the following: (A) An existing municipal roadway. (B) Is shown upon a plat approved pursuant to law and includes the land between the street lines, whether improved or unimproved, and may comprise pavement, bridges, shoulders, gutters, curbs, guardrails, sidewalks, parking areas, benches, fountains, plantings, lighting systems, and other areas within the street lines, as well as equipment and facilities used in the cleaning, grading, clearance, maintenance, and upkeep thereof. (2) ?County highways? including any county highway as de?ned in Section 25 of the Streets and Highways Code, that includes the land between the highway lines, whether improved or unimproved, and may comprise pavement, bridges, shoulders, gutters, curbs, guardrails, sidewalks, parking areas, benches, fountains, plantings, lighting systems, and other areas within the street lines, as well as equipment and facilities used in the cleaning, grading, clearance, maintenance, and upkeep thereof. (3) ?Drainage, water supply, and ?ood control? including, but not limited to, ditches, canals, levees, pumps, dams, conduits, pipes, storm sewers, and dikes necessary to keep or direct water away from people, equipment, buildings, and other protected areas as may be established by lawful authority, as well as the acquisition, improvement, maintenance, and management of ?oodplain areas and all equipment used in the maintenance and operation of the foregoing. (4) ?Educational facilities? including libraries, child care facilities, including, but not limited to, day care facilities, and employment training facilities. (5) ?Environmental mitigation measures? including required construction or modi?cation of public infrastructure and purchase and installation of pollution control and noise abatement equipment. (6) ?Parks and recreational facilities? including local parks, recreational property and equipment, parkways, and property. (7) ?Port facilities? including airports, inland ports, landports, waterports, railports, docks, harbors, ports of entry, piers, ships, small boat harbors and marinas, and any other facilities, additions, or improvements in connection therewith, that transport goods or persons. (8) ?Power and communications? including facilities for the transmission or distribution of electrical energy, natural gas, and telephone and telecommunications serv1ce. (9) ?Public transit? including air and rail transport, airports, guideways, vehicles, rights?of-way, passenger stations, maintenance and storage yards, and related structures, including public parking facilities, and equipment used to provide or enhance transportation by bus, rail, ferry, or other conveyance, either publicly or privately owned, that provides to the public general or special service on a regular and continuing basis. (10) ?Sewage collection and treatment? including pipes, pumps, and conduits that collect wastewater from residential, manufacturing, and commercial establishments, the equipment, structures, and facilities used in treating wastewater to reduce or eliminate impurities or contaminants, and the facilities used in disposing of, or transporting, remaining sludge, as well as all equipment used in the maintenance and operation of the foregoing. 08/20/19 01:52 PM RN 19 20440 PAGE 6 Substantive (l 1) ?Solid waste collection and disposal? including vehicles, vehicle-compatible waste receptacles, transfer stations, recycling centers, sanitary land?lls, and waste conversion facilities necessary to remove solid waste, except that which is hazardous as de?ned by law, from its point of origin. (12) ?Water treatment and distribution? including facilities in which water is puri?ed and otherwise treated to meet residential, manufacturing, or commercial purposes and the conduits, pipes, and pumps that transport it to places of use. (13) ?Defense conversion? including, but not limited to, facilities necessary for successfully converting military bases consistent with an adopted base reuse plan. (14) ?Public safety facilities? including, but not limited to, police stations, ?re stations, court buildings, jails, juvenile halls, and juvenile detention facilities. (15) ?State highways? including any state highway as described in Chapter 2 (commencing with Section 230) of Division 1 of the Streets and Highways Code, and the related components necessary for safe operation of the highway. (16) (A) ?Military infrastructure,? including, but not limited to, facilities on or near a military installation, that enhance the military operations and mission of one or more military installations in this state. To be eligible for funding, the project shall be endorsed by the Of?ce of Flaming and Research. (B) For purposes of this subdivision, ?military installation? means any facility under the jurisdiction of the Department of Defense, as de?ned in paragraph l) of subsection-(61g) of Section 2687 of Title 10 of the United States Code. (1 7) ?Goods movement-related infrastructure? including port facilities, roads, rail, and other facilities and projects that move goods, energy, and information. (1 8) ?Housing-related infrastructure? including city streets; drainage, water supply, and ?ood control; environmental mitigation measures; power and communications; public transit improvement that directly supports transit-oriented housing; sewage collection and treatment; and water treatment and distribution. ?Rate reduction bonds? has the meaning set forth in Section 840 of the Public Utilities Code. (L) ?Revenues? means all receipts, purchase payments, loan repayments, lease payments, and all other income or receipts derived by the bank or a sponsor from the sale, lease, or other ?nancing arrangement undertaken by the bank, a sponsor, or a participating party, including, but not limited to, all receipts from a bond purchase agreement, and any income or revenue derived from the investment of any money in any fund or account of the bank or a sponsor and any receipts derived from transition property or wild?re recovery property. Revenues shall not include moneys in the General Fund of the state. (11) 1 ?Special purpose trust? means a trust, partnership, limited partnership, association, corporation, nonpro?t corporation, or other entity authorized under the laws of the state to serve as an instrumentality of the state to accomplish public purposes and authorized by the bank to acquire, by purchase or otherwise, for retention or sale, the bonds of a sponsor or of the bank made or entered into pursuant to this division and to issue special purpose trust bonds or other obligations secured by these bonds or other sources of public or private revenues. Special purpose trust also means any 08/20/19 01:52 PM RN 19 20440 PAGE 7 Substantive entity authorized by the bank to acquire transition property or to issue rate reduction bonds, or both. or to acquire or own wild?re recovery property or issue wild?re recovery bonds or both subject to the approvals by the bank and powers of the bank as are provided by the bank in its resolution authorizing the entity to issue rate reduction bonds or wild?re recovery bonds. L2) ?Special purpose trust? also means any entity authorized by the bank to mirchase or receive wild?re recovery property. sell or otherwise transfer wild?re recovery property to another special purpose trust formed to issue wild?re recovery bonds. and use the proceeds of that sale to pay claims for third-party damages against a participating electrical corporation. Ly) ?Sponsor? means any subdivision of the state or local government including departments, agencies, commissions, cities, counties, nonpro?t corporations formed on behalf of a sponsor, special districts, assessment districts, and joint powers authorities within the state or any combination of these subdivisions that makes an application to the bank for ?nancial assistance in connection with a project in a manner prescribed by the bank. This de?nition shall not be construed to require that an applicant have an ownership interest in the project. In addition, an electrical corporation shall be deemed to be the sponsor as well as the participating party for any project relating to the ?nancing of transition costs and the acquisition of transition property on the request of the electrical corporation. or for any project relating to the ?nancing of wild?re recovery costs and the acquisition of wild?re recovery property on the request of the electrical corporation and any person, company, corporation, partnership, ?rm, or other entity or group engaged in business or operation within the state that applies for ?nancing of any economic development facility, shall be deemed to be the sponsor as well as the participating party for the project relating to the ?nancing of that economic development facility. ?State? means the State of California. (3) ?Transition costs? has the meaning set forth in Section 840 of the Public Utilities Code. ?Transition property? has the meaning set forth in Section 840 of the Public Utilities Code. (2) ?Wild?re recovery bonds? has the same meaning as de?ned in Section 927 of the Public Utilities Code. aa ?Wild?re recove char es? has the same meanin as de?ned in Section 927 of the Public Utilities Code. (ab) ?Wild?re recovery property? has the same meaning as de?ned in Section 927 of the Public Utilities Code. (ac) ?Wild?re victim compensation fund? has the same meaning as de?ned in Section 927 of the Public Utilities Code. SEC. 3. Section 63025.1 of the Government Code is amended to read: 63025.1. The bank board may do or delegate the following to the executive director: Sue and be sued in its own name. 08/20/19 01:52 PM RN 19 20440 PAGE 8 Substantive As provided in Chapter 5 (commencing with Section 63070), issue bonds and authorize special purpose trusts to issue bonds, including, at the option of the board, bonds bearing interest that is taxable for the purpose of federal income taxation, or borrow money to pay all or any part of the cost of any project, or to otherwise carry out the purposes of this division. Engage the services of prlvate consultants to render professional and technical assistance and advice 1n carrying out the purposes of this division. Employ attorneys, ?nancial consultants, and other advisers as may, in the bank?s judgment, be necessary in connection with the Issuance and sale, or authorization of special purpose trusts for the lssuance and sale, of any bonds, notwithstanding Section 1 1042. Contract for engineering, architectural, accounting, or other services of appropriate state agencies as may, in its judgment, be necessary for the successful development of a project. Pay the reasonable costs of consulting engineers, architects, accountants, and construction, land use, recreation, and environmental experts employed by any sponsor or participating party if, in the bank?s judgment, those services are necessary for the successful development of a project. Acquire and authorize a special purpose trust to acquire, take title to, and sell by installment sale or otherwise, lands, structures, real or personal property, rights, rights-of?way, franchises, other interests in lands that are located within the Mata-era transition property or wild?re recovery property as the bank may deem necessary or convenient for the ?nancing of the project, upon terms and conditions that it considers to be reasonable. Receive and accept from any source including, but not limited to, the federal government, the state, or any agency thereof, loans, contributions, or grants, in money, property, labor, or other things of value, for, or in aid of, a project, or any portion thereof. Make loans to any sponsor or participating party, either directly or by making a loan to a lending institution, in connection with the ?nancing of a project in accordance with an agreement between the bank and the sponsor or a participating party, either as a sole lender or in participation with other lenders. However, no loan shall exceed the total cost of the project as determined by the sponsor or the participating party and approved by the bank. Make loans to any sponsor or participating party, either directly or by making a loan to a lending institution, in accordance with an agreement between the bank and the sponsor or participating party to re?nance indebtedness incurred by the sponsor or participating party in connection with projects undertaken and completed prior to any agreement with the bank or expectation that the bank would provide ?nancing, either as a sole lender or in participation with other lenders. Mortgage all or any portion of the bank?s interest in a project and the property on which any project is located, whether owned or thereafter acquired, including the granting of a security interest in any property, tangible or intangible. (I) Assign or pledge and authorize a special purpose trust to assign or pledge all or any portion of the bank?s interests in transition property or wild?re recovery property and the revenues therefrom, or assets, things of value, mortgages, deeds of trust, bonds, bond purchase agreements, loan agreements, indentures of mortgage or trust, or similar 08/20/l9 01:52 PM RN 19 20440 PAGE 9 Substantive instruments, notes, and security interests in property, tangible or intangible and the revenues therefrom, of a sponsor or a participating party to which the bank has made loans, and the revenues therefrom, including payment or income from any interest owned or held by the bank, for the bene?t of the holders of bonds. Make, receive, or serve as a conduit for the making of, or otherwise provide for, grants, contributions, guarantees, insurance, credit enhancements or liquidity facilities, or other ?nancial enhancements to a sponsor or a participating party as ?nancial assistance for a project. Lease the project being ?nanced to a sponsor or a participating party, upon terms and conditions that the bank deems proper but shall not be leased at a loss; charge and collect rents therefor; terminate any lease upon the failure of the lessee to comply with any of the obligations thereof; include in any lease, if desired, provisions that the lessee shall have options to renew the lease for a period or periods, and at rents determined by the bank; purchase any or all of the project; or, upon payment of all the indebtedness incurred by the bank for the ?nancing of the project, the bank may convey any or all of the project to the lessee or lessees. (0) Charge and equitably apportion among sponsors and participating parties the bank?s administrative costs and expenses incurred in the exercise of the powers and duties conferred by this division. Issue, obtain, or aid in obtaining, from any department or agency of the United States, from other agencies of the state, or from any private company, any insurance or guarantee to, or for, the payment or repayment of interest or principal, or both, or any part thereof, on any loan, lease, or obligation or any instrument evidencing or securing the same, made or entered into pursuant to this division. Notwithstanding any other provision of this division, enter into any agreement, contract, or any other instrument with respect to any insurance or guarantee; accept payment in the manner and form as provided therein in the event of default by a sponsor or a participating party; and issue or assign any insurance or guarantee as security for the bank?s bonds. Enter and authorize a special purpose trust to enter into any agreement or contract, execute any instrument, and perform any act or thing necessary or convenient to, directly or indirectly, secure the bank?s bonds, the bonds issued by a special purpose trust, or a sponsor?s obligations to the bank or to a special purpose trust, including, but not limited to, bonds of a sponsor purchased by the bank or a special purpose trust for retention or sale, with funds or moneys that are legally available and that are due or payable to the sponsor by reason of any grant, allocation, apportionment or appropriation of the state or agencies thereof, to the extent that the Controller shall be the custodian at any time of these funds or moneys, or with funds or moneys that are or will be legally available to the sponsor, the bank, or the state or any agencies thereof by reason of any grant, allocation, apportionment, or appropriation of the federal government or agencies thereof; and in the event of written notice that the sponsor has not paid or is in default on its obligations to the bank or a special purpose trust, direct the Controller to withhold payment of those funds or moneys from the sponsor over which it is or will be custodian and to pay the same to the bank or special purpose trust or their assignee, or direct the state or any agencies thereof to which any grant, allocation, apportionment or appropriation of the federal government or agencies thereof is or will be legally available to pay the same upon receipt by the bank or special purpose trust or their assignee, 08/20/19 01:52 PM RN 19 20440 PAGE 10 Substantive until the default has been cured and the amounts then due and unpaid have been paid to the bank or special purpose trust or their assignee, or until arrangements satisfactory to the bank or special purpose trust have been made to cure the default. (5) Enter and authorize a special purpose trust to enter into any agreement or contract, execute any instrument, and perform any act or thing necessary, convenient, or appropriate to carry out any power expressly given to the bank by this division, including, but not limited to, agreements for the sale of all or any part, including principal, interest, redemption rights or any other rights or obligations, of bonds of the bank or of a special purpose trust, liquidity agreements, contracts commonly known as interest rate swap agreements, forward payment conversion agreements, futures or contracts providing for payments based on levels of, or changes in, interest rates or currency exchange rates, or contracts to exchange cash?flows or a series of payments, or contracts, including options, puts or calls to hedge payments, rate, spread, currency exchange, or similar exposure, or any other ?nancial instrument commonly known as a structured ?nancial product. PurchaserPurchase and authorize a special purpose trust to purchase, with the proceeds of the bank?s bonds. or otherwise cause to be acquired or vested in the bank or its assignee, transition-prepe?y property. wild?re recovery property, or bonds issued by, or for the bene?t of, any sponsor in connection with a project, pursuant to a bond purchase agreement or otherwise?Benels-ertransitien Bonds, transition property, or wild?re recovery property purchased or otherwise acquired pursuant to this division may be held by the bank, pledged or assigned by the bank, or sold to public or private purchasers at public or negotiated sale, in whole or in part, separately or together with other bonds issued by the?ham: bank or a special purpose trust, and notwithstanding any other?pm?sien?ef law, may be bought by the bank at private sale. Enter and authorize a special purpose trust to enter into purchase and sale agreements with all entities, public and private, including state and local government pension funds, with respect to the sale or purchase of?bends?eret?ransit?ien bonds, transition property, or wild?re recovery property. Invest any moneys held in reserve or sinking funds, or any moneys not required for immediate use or disbursement, in obligations that are authorized by law for the investment of trust funds in the custody of the Treasurer. Authorize a special purpose to purchase, retain, or otherwise acquire, with the proceeds of the bonds of a special purpose trust, transition?prepe?y property, wild?re recovery property, or bonds issued by, or for the bene?t of, any sponsor in connection with a project or issued by the bank or a special purpose trust, pursuant to a bond purchase agreement or otherwise. Bends-er?transitien Bonds, transition property or wild?re recovery property?purchased purchased,r or otherwise acquired pursuant to this?title title, may be held by a special purpose entity, pledged or assigned by a special purpose entity, or sold to public or private purchasers at public or negotiated sale, in whole or in part, with or without structuring, subordination or credit enhancement, separately or together with other bonds issued by a special purpose trust, and notwithstanding any other?premien?ef law, may be bought by the bank or by- a special purpose trust at private sale. 08/20/19 01:52 PM RN 19 20440 PAGE 1 1 Substantive Approve the issuance of rate reduction bonds by an entity other than the bank or a special purpose trust to acquire transition property upon approval of the transaction in a ?nancing order by the Public Utilities Commission, as provided in Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code. or to acquire wild?re recovery Droperty upon approval of the transaction in a ?nancing order by the Public Utilities Commission pursuant to Article 15 (commencing with Section 925) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code. Apply for and accept subventions, grants, loans, advances, and contributions from any source of money, property, labor, or other things of value. The sources may include bond proceeds, dedicated taxes, state appropriations, federal appropriations, federal grant and loan funds, public and private sector retirement system funds, and proceeds of loans from the Pooled Money Investment Account. Do all things necessary and convenient to carry out its purposes and exercise its powers, provided, however, that nothing herein shall be construed to authorize the bank to engage directly in the business of a manufacturing, industrial, real estate development, or nongovernmental service enterprise. Further, the bank shall not be organized to accept deposits of money for time or demand deposits or to constitute a bank or trust company. SEC. 4. Section 63041.5 of the Government Code is amended to readthe intent of the Legislature to provide a one?time appropriation for ?nancial assistance to local government to meet capital outlay and infrastructure needs. From the funds appropriated in Item 2920-11 1?0001 of the Budget Act of 1999, the sum of four hundred twenty-?ve million dollars ($425,000,000) shall be available for ?nancial assistance, including, but not limited to, leveraged revolving fund loans, to local government sponsors for public development facilities, as speci?ed in subdivision-(e313 of Section 63010 of the Government Code. From the funds appropriated in Item 2920-111?0001 of the Budget Act of 1999 and in Item 2920?1 1 1-0001 of the Budget Act of 1998 (Chapter 324 of the Statutes of 1998), the California Infrastructure and Economic Development Bank shall make no single loan in excess of 10 percent of the combined amount of these appropriations to the bank unless approved by unanimous consent of the membership of the Board of Directors of the California Infrastructure and Economic Development Bank and the Director of Finance provides a 30-day written notice to the Chairperson and Vice-Chairperson of the Joint Legislative Budget Committee. SEC. 5. Section 63042 of the Government Code is amended to read: 63042. (alNotwithstanding any other provision of this division, a project for the ?nancing of transition costs and the acquisition of transition property upon the request of an electrical corporation shall be deemed to be in the public interest and eligible for ?nancing by the bank, and Article 3 (commencing with Section 63040) and Article 5 (commencing with Section 63043) shall not apply to the project or ?nancing. The bank shall consider a project for ?nancing transition costs and the acquisition of transition property upon ?ling of an application by an appropriate 08/20/19 01:52 PM RN 19 20440 PAGE 12 Substantive participating party, on the terms and conditions the bank shall determine The bank shall establish procedures for the expeditious review of applications from electrical corporations for the Issuance or approval of rate reduction bonds. The review may be concurrent with the Public Utilities Commission?s processing of an application for the pertinent ?nancing order so as to allow for the Issuance of rate reduction bonds as quickly as feasible after the issuance of the pertinent ?nancing order by the Public Utilities Commission. Notwithstanding any other provision of division, the bank shall have no authority to alter or modify any term or condition related to the transition costs or the transition property as set forth in the pertinent ?nancing order, and shall have no authority over any matter that is subject to the approval of the Public Utilities Commission under Article 5.5 (commencing with Section 840) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code. Notwithstanding any other provision of this division. a proiect for the ?nancing of wild?re recovery costs and the acquisition whether through purchase or direct vesting of Wild?re recovery property upon the request of an electrical corporation shall be deemed to be in the public interest and eligible for ?nancing by the bank and Article 3 (commencing with Section 63040) and Article 5 (commencing with Section 63043) shall not apply to the project or ?nancing The bank shall consider a project for ?nancing wild?re recovery costs and the acquisition or ownership of wild?re recovery property upon ?ling of an application by the electrical corporation requesting the ?nancing order pursuant to Article 15 (commencing with Section 925) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code. on the terms and conditions the bank shall determine. The bank shall apply the same procedures for the expeditious review of an application by an electrical corporation for the issuance or approval of wild?re recovery bonds that the bank applies to applications for the issuance of rate reduction bonds under subdivision The review may be concurrent with the Public Utilities Commission?s processing of an application for the pertinent ?nancing order so as to allow for the lssuance of wild?re recovery bonds as quickly as feasible after the issuance of the pertinent ?nancing order by the Public Utilities Commission. The bank and its of?cers may participate in a proceeding for the pertinent ?nancing order as deemed necessary or appropriate by the bank, or as requested by the Public Utilities Commission. The proceeds of the wild?re recovery bonds shall be applied as provided in the ?nancing order and, if so provided. may be deposited or transferred by the bank or its special purpose trust into a wild?re victim compensation fund, which may be, but is not required to be, in consideration for the transfer of the wild?re recovery property from the fund, or the Wild?re Fund for application as provided in the ?nancing order. Notwithstanding any other provision of this division. the bank shall have no authority to alter or modify any term or condition related to the wild?re recovery costs or the wild?re recovery property as set forth in the pertinent ?nancing order. and shall have no authority over any matter that is subject to the approval of the Public Utilities Commission pursuant to Article 15 (commencing with Section 925) of Chapter 4 of Part 1 of Division 1 of the Public Utilities Code. SEC. 6. Section 63049.64 of the Government Code is amended to read: 63049.64. The bank may issue bonds pursuant to Chapter 5 (commencing with Section 63070) and may loan the proceeds thereof to the association, and deposit the proceeds into a separate account in the fund, or use the proceeds to refund bonds 08/20/19 01:52 PM RN 19 20440 PAGE 13 Substantive previously issued under this article. Bond proceeds may also be used to fund necessary reserves, capitalized interest, credit enhancement costs, or costs of issuance. Bonds issued under this article shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund and other revenues and assets securing the bonds. All bonds issued under this article shall contain on the face of the bonds a statement to that effect. For purposes of this article, the term ?project,? as de?ned in subdivision-(p) of Section 63010, shall include ?nancing of the costs of claims of insolvent workers? compensation insurers, in an amount (together with associated costs of ?nancing) that may be determined by the association in making a request for ?nancing to the bank. The bank may also authorize a special purpose trust to purchase or receive wild?re recovery property or to transfer wild?re recovery property to another special mlrpose trust fornied by the bank to issue wild?re recovery bonds and use proceeds of that sale to pay costs and expenses of the special purpose trust and to pay claims for third?party damages against a participating electrical corporation SEC. 7. Section 63071 of the Government Code IS amended to read: 63071. Notwithstanding any other provision of law, but consistent with Sections 1 and 18 of Article XVI of the California Constitution, a sponsor may issue bonds for purchase by the bank pursuant to a bond purchase agreement. The bank may issue bonds or authorize a special purpose trust to issue bonds. These bonds may be issued pursuant to the charter of any city or any city and county that authorized the issuance of these bonds as a sponsor and may also be issued by any sponsor pursuant to the Revenue Bond Law of 1941 (Chapter 6 (commencing with Section 54300) of Division 2 of Title 5) to pay the costs and expenses pursuant to this title, subject to the following conditions: (1) With the prior approval of the bank, the sponsor may sell these bonds in any manner as it may determine, either by private sale or by means of competitive bid. (2) Notwithstanding Section 54418, the bonds may be sold at a discount at any rate as the bank and sponsor shall determine. (3) Notwithstanding Section 54402, the bonds shall bear interest at any rate and be payable at any time as the sponsor shall determine with the consent of the bank. The total amount of bonds issued to ?nance public deveIOpment facilities that may be outstanding at any one time under this chapter shall not exceed ?ve billion dollars The total amount of rate reduction bonds that may be outstanding at any one time under this chapter shall not exceed ten billion dollars 000 ,000 ,000). The total amount of W1ld?re recovery bonds that may be outstanding at any one time under this chapter shall not exceed twenty billion dollars ($20 -000. 000 000) Bonds for which moneys or securities have been deposited in trust, in amounts necessary to pay or redeem the principal, interest, and any redemption premium thereon, shall be deemed not to be outstanding for purposes of this section. SEC. 8. Article 15 (commencing with Section 925) is added to Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, to read: Article 15. Catastrophic Wild?re Liability Recovery Act 08/20/19 01:52 PM RN 19 20440 PAGE 14 Substantive 925. The Legislature ?nds and declares all of the following: The furnishing of reliable reasonably priced electrical service is essential for the safety, health, and well?being of the people of California. The state relies on safe and reliable energy to power its homes, businesses, and transportation infrastructure and on a healthy utility sector to achieve its clean energy goals. Yet California?s investor-owned utilities face unprecedented challenges from climate change and changes in land use patterns over the past 20 years. These challenges, which touch every comer of the state, raise the potential liability faced by investor?owned utilities in inverse condemnation and other claims. In particular, the 2017 and 2018 wild?res were catastrophic in size and effect. The magnitude of potential liability from the 2017 and 2018 wild?res, and the potential impact of that liability on safe and reliable electrical service, require immediate legislative action. The number of persons affected by the 2017 and 2018 wild?res, and the extent of their losses, highlight the need for timely and equitable resolution of their claims. At the same time, the magnitude of potential damage claims and uncertainties surrounding the timing and extent of cost recovery threaten the ?nancial stability of the state?s utilities and their ability to carry out their public service mlss10n. It is therefore in the public interest to provide a mechanism that will promote timely compensation for 2017 and 2018 wild?re victims and equitably allocate costs for strict liability inverse condemnation and other wild?re-related claims and costs while stabilizing the ?nancial health of the responsible commission-regulated entities so that they are able to continue to provide safe and reliable electrical and gas service to customers at affordable rates. Issuance of bonds is a well-established mechanism to reduce customer impacts that has been used successfully in California and in other states. The principal bene?t of securitization through issuance of bonds is lower-cost ?nancing as compared with other forms of borrowing and access to a larger pool of investors. Tax-exempt bonds may be issued by the state, or any instrumentality or political subdivision thereof, while other types of ?nancing entities may issue taxable bonds. To minimize the economic impacts on customers, it is in the public interest to allow an investor-owned utility the opportunity to compensate victims of the 2017 and 2018 catastrophic wild?res and also contribute to a state?sponsored wild?re insurance fund that will mitigate the risk of future adverse events using proceeds from bonds, whether tax-exempt or taxable, and then to retire the bonds with wild?re recovery charges. The net income available to shareholders of the electrical corporation would be reduced in the same amount as the wild?re recovery charges to make the bonds rate neutral, thereby minimizing any impact on the electrical corporation?s customers. For wild?res with an ignition date in 2017, this funding mechanism is intended to replace existing ?nancing options for costs and expenses pursuant to subdivision of Section 451.2 and Article 5.8 (commencing with Section 850). 926. If an electrical corporation applies to the commission for recovery of wild?re recovery costs as part of a plan of corporate reorganization or otherwise, or if the electrical corporation makes, or is obligated or has committed to make, an initial contribution to the Wild?re Fund pursuant to Section 3292, then the electrical corporation may ?le an application requesting the commission to issue a ?nancing order to authorize these obligations to be recovered through wild?re recovery charges 08/20/19 01:52 PM RN 19 20440 PAGE 15 Substantive pursuant to this article. The net income available to shareholders of the electrical corporation shall be reduced, in a manner determined by the commission, in the same amount as the wild?re recovery charges in accordance with Section 930. If the commission approves an application by an electrical corporation for a ?nancing order pursuant to this article for wild?re recovery costs related to a catastrophic wild?re with an ignition date in 2017 or 2018, then that electrical corporation shall not submit an application for recovery of those costs from customers pursuant to Section 451 or 451.2 or for a ?nancing order for those costs and expenses pursuant to Article 5.8 (commencing with Section 850) or any other law. 927. For purposes of this article, the following terms have the following meanings: ?Ancillary agreement? means a bond insurance policy, letter of credit, reserve account, surety bond, swap arrangement, hedging arrangement, liquidity or credit support arrangement, or other similar agreement or arrangement entered into in connection with the issuance of wild?re recovery bonds that is designed to promote the credit quality and marketability of the bonds or to mitigate the risk of an increase in interest rates. ?Catastrophic wild?re claims? means the claims for damages made against an electrical corporation, including settled claims, relating to a catastrophic wild?re with an ignition date in 2017 or 2018 if the commission ?nds those claims to be just and reasonable or if the commission ?nds the amount of those claims exceeds the electrical corporation?s incremental debt capacity consistent with attaining and maintaining an investment grade credit rating. ?Consumer? means any individual, governmental entity, trust, business entity, or nonpro?t organization that uses electricity transmitted or distributed by means of electrical transmission or distribution facilities, whether those electrical transmission or distribution facilities are owned by the consumer, an electrical corporation, or any other party. ?Financing costs? means the costs to issue, service, repay, or re?nance wild?re recovery bonds, whether incurred or paid upon issuance of the wild?re recovery bonds or over the life of the wild?re recovery bonds, if they are approved for recovery by the commission in a ?nancing order. ?Financing costs? may include any of the following: (1) Principal, interest, and redemption premiums that are payable on wild?re recovery bonds. (2) A payment required under an ancillary agreement. (3) An amount required to fund or replenish reserve accounts or other accounts established under an indenture, ancillary agreement, or other ?nancing document relating to the wild?re recovery bonds. (4) Taxes, franchise fees, or license fees imposed on wild?re recovery charges. (5) Costs of establishing, maintaining, operating, and administering a ?nancing entity. (6) Costs of establishing, maintaining and operating a wild?re victim compensation fund including, but not limited to, administrative costs associated with paying catastrophic wild?re claims. (7) Costs related to issuing and servicing wild?re recovery bonds or the application for a ?nancing order, including, without limitation, servicing fees and 08/20/19 01:52 PM RN 19 20440 PAGE 16 Substantive expenses, trustee fees and expenses, legal fees and expenses, accounting fees, administrative fees, underwriting and placement fees, ?nancial advisory fees, original issue discount, capitalized interest, rating agency fees, and any other related costs that are approved for recovery in the ?nancing order. (8) Other costs as speci?cally authorized by a ?nancing order. ?Financing entity? means either or both of the following: (1) An electrical corporation or any subsidiary or af?liate of the electrical corporation. (2) Any public ?nancing entity approved by the commission to issue wild?re recovery bonds or acquire or own wild?re recovery property. ?Financing order? means an order of the commission adopted pursuant to this article that includes, without limitation, a procedure to require the expeditious approval by the commission of periodic adjustments to wild?re recovery charges and to any associated ?xed recovery tax amounts included in that ?nancing order to ensure recovery of all wild?re recovery costs and the costs associated with the proposed recovery, ?nancing, or re?nancing thereof, including, without limitation, the costs of servicing and retiring the wild?re recovery bonds contemplated by the ?nancing order. ?Fixed recovery tax amounts? means those nonbypassable rates and other charges, including, but not limited to, distribution, connection, disconnection, and termination rates and charges, that are needed to recover federal and state income and franchise taxes associated with wild?re recovery charges authorized by the commission in a ?nancing order, but are not approved as ?nancing costs ?nanced from proceeds of wild?re recovery bonds. ?Public ?nancing entity? means the Bergeson?Peace Infrastructure and Economic Development Bank established pursuant to the Bergeson-Peace Infrastructure and Economic Development Bank Act (Division 1 (commencing with Section 63000) of Title 6.7 of the Government Code), or a special purpose trust created by the Bergeson-Peace Infrastructure and Economic Development Bank, or any other instrumentality or political subdivision ofthe state or any special purpose trust created by such instrumentality or political subdivision, that is authorized by law and approved by the commission to issue wild?re recovery bonds or acquire or own wild?re recovery property, or both. ?Service territory? means the geographical area that an electrical corporation provides with electrical distribution service on the date of the electrical corporation?s application for a ?nancing order, regardless of whether any portion of that geographical area is annexed or otherwise acquired by a local publicly owned electric utility after the date of the electrical corporation?s application for a ?nancing order or the electrical corporation otherwise ceases to provide electric distribution service in that geographic area. ?True?up adjustment? means an adjustment to the wild?re recovery charges as they appear on customer bills that is necessary to correct for any overcollection or undercollection of the wild?re recovery charges authorized by a ?nancing order, on an individual customer or aggregate basis, and to otherwise ensure the timely and complete payment and recovery of wild?re recovery costs over the authorized repayment term. ?Wild?re Fund? or ?fund? means the Wild?re Fund established pursuant to Section 3284. 08/20/19 01:52 PM RN 19 20440 PAGE 17 Substantive ?Wild?re recovery bonds? means bonds, notes, certi?cates of participation or bene?cial interest, or other evidences of indebtedness or ownership, issued pursuant to an executed indenture or other agreement of a ?nancing entity, the proceeds of which are used, directly or indirectly, to recover, ?nance, or re?nance wild?re recovery costs, and that are directly or indirectly secured by, or payable from, wild?re recovery charges and other wild?re recovery property. ?Wild?re recovery charges? means those nonbypassable rates and other charges, including, but not limited to, distribution, connection, disconnection, and termination rates and charges, to be imposed by the ?nancing entity as determined in the ?nancing order regarding wild?re costs, and to be collected by the electrical corporation or other collection agents that are authorized by the commission in a ?nancing order to recover, both of the following: (1) Wild?re recovery costs speci?ed in the ?nancing order. (2) The costs of recovering, ?nancing, or re?nancing those wild?re recovery costs through a plan approved by the commission in the ?nancing order, including the costs of servicing and retiring wild?re recovery bonds. ?Wild?re recovery costs? means any of the following: (1) The catastrophic wild?re claims transferred to a wild?re victim compensation trust fund as authorized by the commission in a ?nancing order. (2) The costs to fund and ?nance the electrical corporation?s initial contribution to the Wild?re Fund as required by Section 3292. (3) Federal and state income taxes and franchise fees associated with recovery of the amounts pursuant to paragraph (1). (4) Financing costs. (5) Professional fees, consultant fees, redemption premiums, tender premiums, and other costs incurred by an electrical corporation in using proceeds of wild?re recovery bonds to acquire or retire outstanding securities of the electrical corporation, as authorized by the commission in a ?nancing order. (0) ?Wild?re recovery property? means the property right created pursuant to this division, including, without limitation, the right, title, and interest of a ?nancing entity, as speci?ed in the ?nancing order, or its transferee, to either or both of the following: (A) In and to the wild?re recovery charges established pursuant to a ?nancing order, including all rights to obtain adjustments to the wild?re recovery charges in accordance with Section 928 and the ?nancing order. (B) To impose and receive the amount that is determined in a ?nancing order to be the amount that the ?nancing entity or its transferees are lawfully entitled to receive pursuant to the provisions of this article and the proceeds thereof, and in and to all revenues, collections, claims, payments, moneys, or proceeds of, or arising from, the wild?re recovery charges that are the subject of a ?nancing order. (2) ?Wild?re recovery property? shall not include a right to be paid ?xed recovery tax amounts. (3) ?Wild?re recovery property? shall constitute a current property right, notwithstanding the fact that the value of the property right will depend on consumers using electricity or, in those instances where consumers are customers of an electrical corporation, an electrical corporation performing certain services. 08/20/19 01:52 PM RN 19 20440 PAGE 18 Substantive (4) Wild?re recovery property may be created in the electrical corporation, the Wild?re Fund, or the wild?re victim compensation fund upon the issuance of the ?nancing order if the ?nancing order so provides. ?Wild?re victim compensation fund? means, with respect to a participating electrical corporation, a segregated fund, account, or trust, including the public ?nancing entity or other entity, established to resolve or satisfy one or more contested or uncontested claims against the electrical corporation that have resulted or may result from catastrophic wild?res with an ignition date in 2017 or 2018, including any related series of events, which fund is established pursuant to an order of, or is approved by, the United States, the state, or any political subdivision thereof, or any agency or instrumentality, including a court of law, of any of these governmental authorities and is subject to the continuing jurisdiction of that governmental authority. A wild?re victim compensation fund includes, but is not limited to, a ?quali?ed settlement fund? within the meaning of Section 1.468B-l of Title 26 of the Code of Federal Regulations, established to resolve or satisfy wild?re related claims against the electrical corporation, and may include multiple funds, provided each would itself qualify as a wild?re victim compensation fund. 927.5. Earnings of any wild?re victim compensation fund are tax exempt and contributions to any wild?re victim compensation fund are tax deductible for state tax purposes. 928. The commission may issue a ?nancing order, upon application of an electrical corporation, to allow recovery through wild?re recovery charges, which would become wild?re recovery property by operation of this article, and order that any portion of the electrical corporation?s federal and state income taxes and franchise fees or taxes associated with those wild?re recovery charges, and not ?nanced from proceeds of wild?re recovery bonds, may be recovered through ?xed recovery tax amounts. (1) Following application by an electrical corporation, the commission shall issue a ?nancing order if the commission determines that both of the following conditions are satis?ed: (A) The wild?re recovery costs to be paid or reimbursed from the wild?re recovery bonds have been found to be just and reasonable, or otherwise appropriate for payment or reimbursement. (B) The issuance of the wild?re recovery bonds and all material terms and conditions of the wild?re recovery bonds, including, without limitation, interest rates, rating, amortization redemption, and maturity, and the imposition and collection of wild?re recovery charges as set forth in an application, satisfy both of the following conditions: They are just and reasonable. (ii) They are consistent with the public interest. (2) An electrical corporation may request the determinations speci?ed in paragraph (1) by the commission in a separate proceeding or in an existing proceeding, or both. If the commission makes the determination speci?ed in paragraph (1), the commission shall establish, as part of the ?nancing order, a procedure for the electrical corporation on behalf of itself, and if requested by the electrical corporation in an application for a ?nancing orderjointly with, or with the consent and approval of, a public ?nancing entity, to submit applications from time to time to request the issuance 08/20/19 01:52 PM RN 19 20440 PAGE 19 Substantive of additional ?nancing orders designating wild?re recovery charges and any associated ?xed recovery tax amounts as recoverable. An electrical corporation may submit an application for wild?re recovery costs that the electrical corporation (A) has paid, (B) has an existing legal obligation to pay, or (C) would be obligated to pay pursuant to an executed settlement agreement or corporate restructuring, including the initial funding of the Wild?re Fund pursuant to Section 3292 and wild?re victim compensation fund. The commission shall, within 120 days of the ?ling of that application, issue a ?nancing order, which may take the form of a resolution, if the commission determines that the amounts identi?ed in the application are wild?re recovery costs. If a public ?nancing entity is proposed as the issuer of wild?re recovery bonds or as the transferee or pledgee of wild?re recovery property, the public ?nancing entity may participate in any proceeding relating to the issuance of a ?nancing order in such capacity as the commission deems appropriate. Wild?re recovery charges and any associated ?xed recovery tax amounts shall be imposed only on existing and future consumers in the service territory of the electrical corporation submitting an application. Consumers within that service territory shall continue to pay wild?re recovery charges and any associated ?xed recovery tax amounts until the wild?re recovery bonds and associated ?nancing costs are paid in full by the ?nancing entity. Consumers within that service territory shall continue to pay any associated ?xed recovery tax amounts until the electrical corporation has recovered amounts needed to recover federal and State of California income and franchise taxes that are associated with wild?re recovery charges authorized by the commission in a ?nancing order, but that are not approved as ?nancing costs ?nanced from proceeds of wild?re recovery bonds. The electrical corporation submitting an application for a ?nancing order shall serve as collection agent to collect the wild?re recovery charges and transfer those collected amounts to any ?nancing entity or transferee, as approved in the ?nancing order, and the ?nancing entity, including any collection agent, may exercise the same rights and remedies under the electrical corporation?s tariff and applicable law and regulation based upon a customer?s nonpayment of wild?re recovery charges and any associated ?xed recovery tax as it could for a customer?s failure to pay any other charge payable to that electrical corporation. (6) The commission shall establish in a ?nancing order an effective mechanism that ensures recovery of wild?re recovery costs through nonbypassable wild?re recovery charges and any associated ?xed recovery tax amounts from existing and future consumers in the service territory, and those consumers shall be required to pay those charges until the wild?re recovery bonds, any ?xed recovery tax amounts, and all associated ?nancing costs are paid in full by the ?nancing entity, at which time those charges shall be terminated. Wild?re recovery charges shall be irrevocable, notwithstanding the true?up adjustment pursuant to subdivision (1). Wild?re recovery bonds authorized by the commission?s ?nancing orders may be issued in one or more series on or before December 31, 2050. The commission may issue ?nancing orders to an electrical corporation or another ?nancing entity in accordance with this article to facilitate the recovery, ?nancing, or re?nancing of wild?re recovery costs. A ?nancing order shall be adopted only upon the application of an electrical corporation and shall become effective in accordance with its terms. A ?nancing order may specify how amounts collected from 08/20/19 01:52 PM RN 19 20440 PAGE 20 Substantive a consumer shall be allocated between wild?re recovery charges, any associated ?xed recovery tax amounts, and other charges. Notwithstanding Section 455.5 or 1708, or any other law, and except as otherwise provided in subdivision for wild?re recovery property that has been made the basis for the issuance of wild?re recovery bonds and for any associated ?xed recovery tax amounts, the ?nancing order, the wild?re recovery charges, and any associated ?xed recovery tax amounts shall be irrevocable. Except as provided for in Section 930, the commission shall not, either by rescinding, altering, or amending the ?nancing order or otherwise, revalue or revise for ratemaking purposes the wild?re recovery costs or the costs of recovering, ?nancing, or re?nancing the wild?re recovery costs, or in any way reduce or impair the value of wild?re recovery property or of the right to receive any associated ?xed recovery tax amounts either directly or indirectly by taking wild?re recovery charges or any associated ?xed recovery tax amounts into account when setting other rates for the electrical corporation. The amount of revenues shall not be subject to reduction, impairment, postponement, or termination. The state does hereby pledge and agree with the applicable electrical corporation, owners of wild?re recovery property, each ?nancing entity, and holders of wild?re recovery bonds that the state shall neither limit nor alter, except as otherwise provided with respect to the true?up adjustment ofthe wild?re recovery charges pursuant to subdivision 0), the wild?re recovery charges, any associated ?xed recovery tax amounts, wild?re recovery property, ?nancing orders, or any rights under a ?nancing order until the wild?re recovery bonds, together with the interest on the wild?re recovery bonds and associated ?nancing costs, are fully paid and discharged, and any associated ?xed recovery tax amounts have been satis?ed or, in the alternative, have been re?nanced through an additional issue of wild?re recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the public ?nancing entity, the electrical corporation and of owners and holders of the wild?re recovery bonds. Any public ?nancing entity, as a condition of the issuance of the wild?re recovery bonds, shall pledge and agree with the applicable electrical corporation, owners of wild?re recovery property, other ?nancing entities, and holders of wild?re recovery bonds that it shall neither limit nor alter, except as otherwise provided with respect to the true?up adjustment of the wild?re recovery charges pursuant to subdivision the wild?re recovery charges, any associated ?xed recovery tax amounts, wild?re recovery property, ?nancing orders, or any rights under a ?nancing order until the wild?re recovery bonds, together with the interest on the wild?re recovery bonds and associated ?nancing costs, are fully paid and discharged, and any associated ?xed recovery tax amounts have been satis?ed or, in the alternative, have been re?nanced through an additional issue of wild?re recovery bonds, provided that nothing contained in this section shall preclude the limitation or alteration if and when adequate provision shall be made by law for the protection of the electrical corporation and of owners and holders of the wild?re recovery bonds. A ?nancing entity is authorized to include these pledges and undertakings for the state and public ?nancing entity in these wild?re recovery bonds. (1) Neither ?nancing orders nor wild?re recovery bonds issued pursuant to this article shall constitute a debt or liability of the state or of any political subdivision thereof except for any public ?nancing entity as and to the extent such public ?nancing is obligated on the wild?re recovery bonds, nor shall they constitute a pledge of the 08/20/19 01:52 PM RN 19 20440 PAGE 21 Substantive full faith and credit of the state or any of its political subdivisions. All wild?re recovery bonds shall contain on the face thereof a statement to the following effect: ?Neither the full 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.? (2) Except for the imposition of wild?re recovery charges and associated ?xed recovery tax amounts pursuant to this article upon the state or any political subdivision thereof in its capacity as a consumer, the issuance of wild?re recovery bonds pursuant to this article shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their repayment. (3) Wild?re recovery bonds issued pursuant to a ?nancing order shall not be a debt of the electrical corporation, wild?re recovery charges paid and collected pursuant to a ?nancing order shall not be considered the revenue or property of the electrical corporation for any purpose, and upon the creation or transfer of the wild?re recovery property in or to an entity other than the electrical corporation, the electrical corporation shall not have any bene?cial interest or claim of right in such wild?re recovery charges or wild?re recovery property. The commission shall establish procedures for the expeditious processing of an application for a ?nancing order, which shall provide for the approval or disapproval of the application within 120 days of the application. The commission shall, in any ?nancing order, provide for a procedure for periodic true?up adjustments to wild?re recovery charges, which shall be made at least annually and may be made more frequently. The electrical corporation shall ?le an advice letter with the commission to implement any true-up adjustment. Wild?re recovery charges are wild?re recovery property when, and to the extent that, a ?nancing order authorizing the wild?re recovery charges has become effective pursuant to this article, and the wild?re recovery property shall thereafter continuously exist as property for all purposes, and all of the rights and privileges relating to that property pursuant to this article shall continuously exist for the period and to the extent provided in the ?nancing order, but in any event until the wild?re recovery bonds are paid in full, including all principal, premiums, if any, and interest with respect to the wild?re recovery bonds, and all associated ?nancing costs are paid in full. Wild?re recovery property created by a ?nancing order shall be a vested contract right, and that ?nancing order shall create a contractual obligation of irrevocability by the commission in favor of the owner of wild?re recovery property, including a ?nancing entity. (1) This article and any ?nancing order made pursuant to this article does not amend, reduce, modify, or otherwise affect the right of the Department of Water Resources to recover its revenue requirements and to receive the charges that it is to recover and receive pursuant to Division 27 (commencing with Section 80000) or Division 28 (commencing with Section 80500) of the Water Code, or pursuant to any agreement entered into by the commission and the Department of Water Resources pursuant to that division. 929. A ?nancing entity may issue wild?re recovery bonds only following approval by the commission in a ?nancing order. Wild?re recovery bonds shall be nonrecourse to the credit or any assets of the electrical corporation and to the credit and assets of the ?nancing entity, other than the wild?re recovery property and any 08/20/19 01:52 PM RN 19 20440 PAGE 22 Substantive other assets pledged to the payment of wild?re recovery bonds, as speci?ed in the ?nancing order and related bond documentation. The Wild?re recovery property created by the ?nancing order may be sold or assigned by the electrical corporation or a ?nancing entity to the wild?re victim compensation fund, and the wild?re recovery property may be sold by the wild?re victim compensation fund to a ?nancing entity, and may be pledged by a ?nancing entity, as collateral, either directly or indirectly, to secure the payment of the wild?re recovery bonds issued as contemplated by the ?nancing order and related ?nancing costs. In addition, wild?re recovery property may be sold or assigned by either of the following: (1) The ?nancing entity or a trustee for the holders of wild?re recovery bonds or the holders of an ancillary agreement in connection with the exercise of remedies upon a default. (2) Any person acquiring the wild?re recovery property after a sale or assignment pursuant to this article. (0) To the extent that any interest in wild?re recovery property is sold or assigned, or is pledged by either an electrical corporation or a ?nancing entity as collateral pursuant to subdivision the commission shall authorize an electrical corporation to contract with the ?nancing entity that it will continue to operate its system to provide service to consumers within its service territory, will collect amounts in respect of the wild?re recovery charges for the bene?t and account of the ?nancing entity, and will account for and remit these amounts to or for the account of the ?nancing entity. Contracting with the ?nancing entity in accordance with that authorization shall not impair or negate the characterization of the sale, assignment, or pledge as an absolute transfer, a true sale, or a security interest, as applicable. To the extent that billing, collection, and other related services with respect to the provision of electric service are provided to a consumer by any person or entity other than the electrical corporation in whose service territory the consumer is located, that person or entity shall collect the wild?re recovery charges and any associated ?xed recovery tax amounts from the consumer for the bene?t and account of the electrical corporation or ?nancing entity with the associated revenues remitted solely for the bene?t and repayment of the wild?re recovery bonds and associated ?nancing costs as a condition to the provision of electrical service to that consumer. Each ?nancing order shall impose terms and conditions, consistent with the purposes and objectives of this article, on any person or entity responsible for billing, collection, and other related services, including, without limitation, collection of the wild?re recovery charges and any associated ?xed recovery tax amounts, that are the subject of the ?nancing order. Wild?re recovery property that is speci?ed in a ?nancing order shall constitute an existing, present property right, notwithstanding the fact that the imposition and collection of wild?re recovery charges depend on an electrical corporation or a successor continuing to provide electricity service or continuing to perform its servicing functions relating to the collection of Wild?re recovery charges or on the level of future electricity consumption. Wild?re recovery property shall exist whether or not the wild?re recovery charges have been billed, have accrued, or have been collected and notwithstanding the fact that the value for a security interest in the wild?re recovery property, or amount of the wild?re recovery property, is dependent on the future provision of service to consumers. All wild?re recovery property speci?ed in a ?nancing order shall continue 08/20/19 01:52 PM RN 19 20440 PAGE 23 Substantive to exist until the wild?re recovery bonds issued pursuant to a ?nancing order and all associated ?nancing costs are paid in full. Wild?re recovery property, wild?re recovery charges, and the interests of an assignee, bondholder or ?nancing entity, or any pledgee in wild?re recovery prOperty and wild?re recovery charges are not subject to setoff, counterclaim, surcharge, recoupment, or defense by the electrical corporation or the ?nancing entity or any other person or in connection With the bankruptcy, reorganization, or other insolvency proceeding of the electrical corporation, any af?liate of the electrical corporation, the ?nancing entity or any other entity. Notwithstanding Section 1708 or any other law, any requirement under this article or a ?nancing order that the commission take action with respect to the subject matter of a ?nancing order shall be binding upon the commission, as it may be constituted from time to time, and any successor agency exercising functions similar to the commission, and the commission shall have no authority to rescind, alter, or amend that requirement in a ?nancing order. The approval by the commission in a ?nancing order of the issuance by the electrical corporation or another ?nancing entity of wild?re recovery bonds shall include the approvals, if any, as may be required by Article 5 (commencing with Section 816) and Section 701.5. Nothing in Section 701.5 shall be construed to prohibit the issuance of Wild?re recovery bonds upon the terms and conditions as may be approved by the commission in a ?nancing order. Section 851 does not apply to the transfer or pledge of wild?re recovery property, the issuance of wild?re recovery bonds, or related transactions approved in a ?nancing order. 930. Notwithstanding subdivision of Section 928, subsequent to the issuance of a ?nancing order, the net income that is available to shareholders of the electrical corporation that applied for the ?nancing order shall be reduced, in a manner determined by the commission and in an amount equal, in the aggregate and subject to periodic true-up adjustments, to the wild?re recovery charges, but the electrical corporation, any other ?nancing entity, and the commission may not adjust, amend, or modify the catastrophic wild?re claims, wild?re recovery charges, except pursuant to subdivision of Section 928, the ?xed recovery tax amounts, the ?nancing order, wild?re recovery costs, the wild?re recovery property, or the wild?re recovery bonds. The adjustment of the net income in subdivision shall be accomplished solely by a reduction in the electrical corporation?s net income that is available for shareholders. The electrical corporation shall provide to the commission and the ?nancing entity an annual report summarizing the charges collected by the electrical corporation, as servicer, and the adjustment to the net income that is available to shareholders of the electrical corporation. The wild?re recovery costs to be paid from the proceeds of the wild?re recovery bonds are hereby deemed just and reasonable pursuant to Sections 451, 451.1, and subparagraph (A) of paragraph (1) of subdivision of Section 928 to the extent the net income available to shareholders of the electrical corporation is reduced in the aggregate amount equal to the wild?re recovery costs pursuant to subdivision The commission shall not consider wild?re recovery bonds in authorizing or evaluating compliance with an electrical corporation?s capital structure. Nothing in this section shall be construed to permit setoff, counterclaim, surcharge, recoupment, or defense by the electrical corporation or any other person, or in connection with the bankruptcy, reorganization, or other insolvency proceeding 08/20/19 01:52 PM RN 19 20440 PAGE 24 Substantive of the electrical corporation, any af?liate of the electrical corporation, or any other entity, against the wild?re recovery property, the wild?re recovery charges, or the interests of an assignee, bondholder, or ?nancing entity, or any pledgee in wild?re recovery property or wild?re recovery charges. 931. A security interest in wild?re recovery property is valid, is enforceable against the pledgor and third parties, is subject to the rights of any third parties holding security interests in the wild?re recovery property perfected in the manner described in this section, and attaches when all of the following have taken place: (1) The commission has issued a ?nancing order authorizing the wild?re recovery charges included in the wild?re recovery property. (2) Value has been given by the pledgees of the wild?re recovery property. (3) The pledgor has signed a security agreement covering the wild?re recovery property. A valid and enforceable security interest in wild?re recovery property is perfected when it has attached and when a ?nancing statement has been ?led in accordance with Chapter 5 (commencing with Section 9501) of Division 9 of the Commercial Code naming the pledgor of the wild?re recovery property as ?debtor? and identifying the wild?re recovery property. Any description of the wild?re recovery property shall be suf?cient if it refers to the ?nancing order creating the wild?re recovery property. A copy of the ?nancing statement shall be ?led with the commission by the electrical corporation or the financing entity that is the pledgor or transferor of the wild?re recovery property, and the commission may require the electrical corporation or ?nancing entity to make other ?lings with respect to the security interest in accordance with procedures it may establish, provided that the ?lings shall not affect the perfection of the security interest. (0) A perfected security interest in wild?re recovery property is a continuously perfected security interest in all wild?re recovery property revenues and proceeds arising with reSpect thereto, whether or not the revenues or proceeds have accrued. Conflicting security interests shall rank according to priority in time of perfection. Wild?re recovery property shall constitute property for all purposes, including for contracts securing wild?re recovery bonds, whether or not the wild?re recovery property revenues and proceeds have accrued. Subject to the terms of the security agreement covering the wild?re recovery property and the rights of any third parties holding security interests in the wild?re recovery property perfected in the manner described in this section, the validity and relative priority of a security interest created under this section is not defeated or adversely affected by the commingling of revenues arising with respect to the wild?re recovery property with other funds of an electrical corporation or the ?nancing entity that is the pledgor or transferor of the wild?re recovery property, or by any security interest in a deposit account of that electrical corporation perfected under Division 9 (commencing with Section 9101) of the Commercial Code into which the revenues are deposited. Subject to the terms of the security agreement, upon compliance with the requirements of paragraph (1) of subdivision of Section 9312 of the Commercial Code, the pledgees of the wild?re recovery property shall have a perfected security interest in all cash and deposit accounts of the electrical corporation or the ?nancing entity in which wild?re recovery property revenues have been commingled with other funds, but the perfected security interest shall be limited to an amount not greater than 08/20/19 01:52 PM RN 19 20440 PAGE 25 Substantive the amount of the wild?re recovery property revenues received by an electrical corporation or ?nancing entity within 12 months before (1) any default under the security agreement, or (2) the institution of insolvency proceedings by or, to the extent permissible under the United States Bankruptcy Code (Title 11 of the United States Code), against an electrical corporation or ?nancing entity, less payments from the revenues to the pledgees during that 12?month period. If default occurs under the security agreement covering the wild?re recovery property, the pledgees of the wild?re recovery property, subject to the terms of the security agreement, shall have all rights and remedies of a secured party upon default under Division 9 (commencing with Section 9101) of the Commercial Code, and are entitled to foreclose or otherwise enforce their security interest in the wild?re recovery property, subject to the rights of any third parties holding prior security interests in the wild?re recovery property perfected in the manner provided in this section. In addition, the commission may require in the ?nancing order creating the wild?re recovery property that, in the event of default by the electrical corporation in payment of wild?re recovery property revenues, the commission and any successor thereto, upon the application by the ?nancing entity or any pledgees or transferees, including transferees pursuant to Section 932, of the wild?re recovery property, and without limiting any other remedies available to the pledgees or transferees by reason of the default, shall order the sequestration and payment to the pledgees or transferees of wild?re recovery property revenues. Any order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the debtor, pledgor, or transferor of the wild?re recovery property. Any surplus in excess of amounts necessary to pay principal, premiums, if any, interest, costs, and arrearages on the wild?re recovery bonds, and associated ?nancing costs arising under the security agreement, shall be remitted to the debtor or to the pledgor or transferor. Section 5451 of the Government Code shall not apply to any pledge of wild?re recovery property by a public ?nancing entity. Sections 9204 and 9205 of the Commercial Code apply to a pledge of wild?re recovery property by the electrical corporation, an af?liate of the electrical corporation, or any ?nancing entity. (1) This section sets forth the terms by which a consensual security interest shall be created and perfected in the wild?re recovery property. Unless otherwise ordered by the commission with respect to any series of wild?re recovery bonds on or before the issuance of the series, there shall exist a statutory lien as provided in this subdivision. Upon the effective date of the ?nancing order, there shall exist a ?rst priority lien on all wild?re recovery property then existing or thereafter arising pursuant to the terms of the ?nancing order. This lien shall arise by operation of this section automatically without any action on the part of an electrical corporation, any af?liate thereof, the public ?nancing entity, another ?nancing entity, or any other person. This lien shall secure all obligations, then existing or subsequently arising, to the holders of the wild?re recovery bonds issued pursuant to the ?nancing order, the trustee or representative for the holders, and any other entity speci?ed in the ?nancing order. The persons for whose bene?t this lien is established shall, upon the occurrence of any defaults speci?ed in the ?nancing order, have all rights and remedies of a secured party upon default under Division 9 (commencing with Section 9101) of the Commercial Code, and are entitled to foreclose or otherwise enforce this statutory lien in the wild?re recovery property. This lien attaches to the wild?re recovery property regardless of 08/20/19 01:52 PM RN 20440 PAGE 26 Substantive who owns, or is subsequently determined to own, the wild?re recovery property, including an electrical corporation, any af?liate thereof, the public ?nancing entity, another ?nancing entity, or any other person. This lien shall be valid, perfected, and enforceable against the owner of the wild?re recovery property and all third parties upon the effectiveness of the ?nancing order without any further public notice; provided, however, that any person may, but is not required to, ?le a ?nancing statement in accordance with subdivision Financing statements so ?led may be ?protective ?lings? and are not evidence of the ownership of the wild?re recovery property. (2) A perfected statutory lien in wild?re recovery property is a continuously perfected lien in all wild?re recovery property revenues and proceeds, whether or not the revenues or proceeds have accrued. Con?icting liens shall rank according to priority in time of perfection. Wild?re recovery property shall constitute property for all purposes, including for contracts securing wild?re recovery bonds, whether or not the wild?re recovery property revenues and proceeds have accrued. 932. A transfer of wild?re recovery property (1) by an electrical corporation to an af?liate or to the wild?re victim compensation fund, (2) by an electrical corporation, an af?liate, or the wild?re victim compensation fund to a ?nancing entity, or (3) by one ?nancing entity to another ?nancing entity, which the parties in the governing documentation have expressly stated to be a sale or other absolute transfer, in a transaction approved in a ?nancing order, shall be treated as an absolute transfer of all of the transferor?s right, title, and interest, as in a true sale, and not as a pledge or other ?nancing, of the wild?re recovery property. The characterization of the sale, assignment, or transfer as an absolute transfer and true sale and the corresponding characterization of the property interest of the purchaser shall not be affected or impaired by, among other things, the occurrence of any of the following: (1) Commingling of wild?re recovery charge revenues with other amounts. (2) The retention by the seller of either of the following: (A) A partial or residual interest, including an equity interest, in the ?nancing entity or the wild?re recovery property, whether direct or indirect, subordinate or otherwise. (B) The right to recover costs associated with taxes, franchise fees, or license fees imposed on the collection of wild?re recovery charges. (3) Any recourse that the purchaser may have against the seller. (4) Any indemni?cation rights, obligations, or repurchase rights made or provided by the seller. (5) The obligation of the seller to collect wild?re recovery charges on behalf of an assignee. (6) The treatment of the sale, assignment, or transfer for tax, ?nancial reporting, or other purposes. (7) Any true?up adjustment of the wild?re recovery charges as provided in the ?nancing order. (8) Any reduction in net income that is available to the shareholders of the electrical corporation in accordance with Section 930. (9) Any transfer of unspent sale proceeds to a ?nancing entity to provide for the repayment of wild?re recovery bonds. 08/20/19 01:52 PM RN 19 20440 PAGE 27 Substantive A transfer of wild?re recovery property shall be deemed perfected against third persons when both of the following occur: (1) The commission issues the ?nancing order authorizing the wild?re recovery charges included in the Wild?re recovery property. (2) An assignment of the Wild?re recovery property in writing has been executed and delivered to the transferee. As between bona ?de assignees of the same right for value without notice, the assignee ?rst ?ling a ?nancing statement in accordance with Chapter 5 (commencing with Section 9501) of Division 9 of the Commercial Code naming the assignor of the wild?re recovery property as debtor and identifying the wild?re recovery property has priority. Any description of the Wild?re recovery property shall be suf?cient if it refers to the ?nancing order creating the wild?re recovery property. A copy of the ?nancing statement shall be ?led by the assignee with the commission, and the commission may require the assignor or the assignee to make other ?lings with respect to the transfer in accordance with procedures it may establish, but these ?lings shall not affect the perfection of the transfer. 933. Any successor to the electrical corporation or the public ?nancing entity, whether pursuant to any bankruptcy, reorganization, or other insolvency proceeding, or pursuant to any merger, sale, or transfer, by operation of law, or otherwise, shall perform and satisfy all obligations of the electrical corporation or the public ?nancing entity, as applicable, pursuant to this article in the same manner and to the same extent as the electrical corporation or the public ?nancing entity, as applicable, including, but not limited to, collecting and paying to the holders of wild?re recovery bonds, or their representatives, or the applicable ?nancing entity revenues arising with respect to the wild?re recovery property sold to the applicable ?nancing entity or pledged to secure Wild?re recovery bonds. Any successor to the electrical corporation or the public ?nancing entity, as applicable, is entitled to receive any ?xed recovery tax amounts otherwise payable to the electrical corporation or the public ?nancing entity. Any local publicly owned electric utility that annexes or otherwise acquires a portion of the electrical corporation?s service territory?shall assess the wild?re recovery charges authorized by the ?nancing order, collect such wild?re recovery charges authorized by the ?nancing order, and remit those amounts to the owner of the wild?re recovery property. 934. The authority of the commission to issue ?nancing orders pursuant to Section 928 shall expire on December 31, 2050. The expiration of the authority shall not affect ?nancing orders adopted by the commission pursuant to this article or any wild?re recovery property arising therefrom, or the charges authorized to be levied thereunder, or the rights, interests, and obligations of the electrical corporation or any ?nancing entity or holders of wild?re recovery bonds pursuant to the ?nancing order, or the authority of the commission to monitor, supervise, or take further action with respect to the order in accordance with the terms of this article and of the order. 935. Before the date that is two years and one day after the date when any public ?nancing entity no longer has any payment obligation with respect to any wild?re recovery bonds outstanding, the public ?nancing entity is prohibited from ?ling and shall have no authority to ?le a voluntary petition under the United States Bankruptcy Code (Title 1 of the United States Code), as it may, from time to time, be in effect, 08/20/l9 01:52 PM RN [9 20440 PAGE 28 Substantive and neither any public of?cial nor any organization, entity, or other person shall authorize the public ?nancing entity to be or to become a debtor under the United States Bankruptcy Code during that period. The provisions of this section shall be part of any contractual obligation owed to the holders of wild?re recovery bonds issued under this article. Any such contractual obligation shall not subsequently be modi?ed by state law during the period of the contractual obligation, and the state and the Legislature hereby covenant with the holders that the state and any public instrumentality thereof and the Legislature shall not limit or alter the denial of authority under this section during the period referred to in this section. 936. The commission shall enforce the provisions of the ?nancing order against any ?nancing entity, including any public ?nancing entity to the extent permitted by law, and for those purposes may exercise all authority granted to the commission with respect to a public utility by Article XII of the California Constitution and by this part. Nothing in this section makes a ?nancing entity a public utility. A ?nancing entity that is not an electrical corporation, the wild?re victim compensation fund, and the Wild?re Fund shall not be considered an electrical corporation or person providing electrical service by virtue of engaging in the transactions described in this article. Neither the ?nancing entity, the wild?re victim compensation fund, nor the Wild?re Fund is an agent of an electrical corporation by virtue of engaging in the transactions described in this article. A public ?nancing entity and all persons connected therewith, shall and are hereby authorized to, at the request of the electrical corporation, give the electrical corporation reasonable assistance or other cooperation in carrying out the purposes of this article, including for activities associated with an application for a ?nancing order. 937. A public ?nancing entity shall make annual reports to the Governor and the Legislature regarding its activities and expenditures pursuant to this article. An annual report submitted to the Legislature pursuant to subdivision shall be submitted in compliance with Section 9795 of the Government Code. 938. This article shall not affect any civil action or proceeding. SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article 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 de?nition of a crime within the meaning of Section 6 of Article of the California Constitution. Amendment 5 On page 3, strike out lines 1 to l, inclusive, and strike out pages 4 and 5 -0-