Amended  IN  Assembly  April 10, 2024
Amended  IN  Assembly  March 21, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 2537

Introduced by Assembly Member Addis

February 13, 2024

An act to add Chapter 16 (commencing with Section 25993) to Division 15 of the Public Resources Code, and to amend Section 80832 to 80820 of the Water Code, relating to offshore wind generation. energy development.


LEGISLATIVE COUNSEL'S DIGEST


AB 2537, as amended, Addis. Energy: offshore wind generation: grant program. offshore wind energy development: Offshore Wind Community Capacity Building Fund Grant Program.

Existing law, the Warren-Alquist State Energy Resources Conservation and Development Act,

(1) Existing law requires the State Energy Resources Conservation and Development Commission Commission (Energy Commission), in coordination with specified entities, to develop a strategic plan for offshore wind energy developments installed off the California coast in federal waters. Existing law requires, if the commission requests the Department of Water Resources to procure eligible energy resources, and the department elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources, as provided, the commission, in consultation with the department, to develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of costs incurred by the department relating to bids for the development of eligible energy resources. waters and a second-phase plan and strategy for seaport readiness that builds on the recommendations and alternatives in the strategic plan, as specified. Existing law establishes the Voluntary Offshore Wind and Coastal Resources Protection Program, which is administered by the Energy Commission for the purpose of supporting state activities that complement and are in furtherance of federal laws related to the development of offshore wind facilities, including environmental impacts monitoring and workforce development grants.
This bill would establish in the State Treasury the Local and Tribal Communities Offshore Wind Community Capacity Building Fund and authorize moneys in the fund to be used, upon appropriation by the Legislature, by the Energy Commission to establish the Offshore Wind Community Capacity Building Fund Grant Program to award grants for the purpose of building capacity within local communities, as described, communities and California tribal communities to engage in the process of offshore wind energy development. development, as specified. The bill would make certain local communities, California tribes, as described, and nonprofit organizations, as described, organizations eligible for the grants. grants, as described. The bill would require the department Energy Commission to establish a grant application process for the fund, program, develop guidelines for the use of grant moneys awarded, awarded from the fund, and prepare and submit an annual report to the Legislature on the implementation and effectiveness of the fund, program, as specified.
(2) If the Public Utilities Commission (PUC) requests the Department of Water Resources to procure eligible energy resources, and the department elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources, as provided, existing law requires the PUC, in consultation with the department, to develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of certain costs incurred by the department. Existing law requires the department, in evaluating the bids received through a solicitation, to consider various factors, including the bidder’s economic and local community impact, workforce development needs and opportunities, environmental impact mitigation plan, and equipment acquisition and supply chain investment plan.
This bill would require the department, in evaluating the bids received through a solicitation, to also consider the bidder’s impact on the Offshore Wind Community Capacity Building Fund.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Chapter 16 (commencing with Section 25993) is added to Division 15 of the Public Resources Code, to read:
CHAPTER  16. Offshore Wind Community Capacity Building Fund Grant Program

25993.
 For purposes of this chapter, the following definitions apply:
(a) “Fund” means the Offshore Wind Community Capacity Building Fund established pursuant to Section 25993.1.
(b) “Program” means the Offshore Wind Community Capacity Building Fund Grant Program established pursuant to Section 25993.1.

25993.1.
 (a) There is hereby established in the State Treasury the Offshore Wind Community Capacity Building Fund.
(b) Moneys in the fund may be used, upon appropriation by the Legislature, by the commission to establish the Offshore Wind Community Capacity Building Fund Grant Program to award grants for the purpose of building capacity within local communities and tribal communities to engage in the process of offshore wind energy development, including, but not limited to, activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, and math, and the implementation of local and tribal benefit agreements. Moneys in the fund shall not be used to fulfill the purposes of financial commitments made to fulfill a lessee’s bidding credits in a bureau lease sale auction.
(c) Entities eligible for a grant from the fund include, but are not limited to, all of the following entities:
(1) Local communities located within ____ miles of the geographic center of a lease tract of applicable proposed or existing offshore wind energy developments, rural communities, coastal zone communities, disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code, and low-income communities as defined in Section 39713 of the Health and Safety Code.
(2) California tribes, including federally recognized tribes or California Native American tribes, identified on the contact list maintained by the Native American Heritage Commission.
(3) Nonprofit organizations that represent the interests of local communities or California tribes in relation to offshore wind energy development, if the organization meets all of the following criteria:
(A) Is recognized by the federal government as a 501(c) or 521(a) nonprofit entity pursuant to the Internal Revenue Code.
(B) Is registered and certified as a nonprofit organization by the State of California.
(C) Is not on the list of organizations for which the tax-exempt status is revoked that is published and maintained by the Franchise Tax Board pursuant to subparagraph (A) of paragraph (14) of subdivision (b) of Section 23772 of the Revenue and Taxation Code.
(d) The commission shall establish a grant application process for the program. The grant application process shall ensure that the allocation of grant moneys is done in an equitable manner that takes into account the needs and capacities of the communities, tribes, and organizations that apply for those grants.
(e) The commission, in consultation with local communities, tribes, and other relevant stakeholders, shall develop guidelines for the use of grant moneys awarded from the fund. The guidelines shall be subject to review and amendment every three years.
(f) Notwithstanding Section 10231.5 of the Government Code, the commission shall prepare and submit an annual report to the Legislature, in accordance with Section 9795 of the Government Code, on the implementation and effectiveness of the program. The report shall include, but not be limited to, the total amount of grant moneys awarded by the program, a description of the activities funded by program, and an assessment of the impact of the program on the capacity of local communities and tribes to engage in offshore wind energy development.

SEC. 2.

 Section 80820 of the Water Code is amended to read:

80820.
 (a) (1) Consistent with Sections 380, 454.51, 454.52, 454.53, and 454.54 of the Public Utilities Code and this division, if the commission requests the department to procure eligible energy resources, and the department elects to exercise its central procurement function to conduct one or more competitive solicitations or enter into contracts for eligible energy resources pursuant to paragraph (4) of subdivision (a) of Section 454.52 of the Public Utilities Code, the commission, in consultation with the department, shall develop and adopt procedures and requirements that govern competitive procurement by, obligations on, and recovery of costs incurred by the department pursuant to this division.
(2) The commission and the department shall establish a procurement group to advise the department on the procurement undertaken pursuant to this division.
(3) The department shall not enter into new contracts pursuant to this division on or after January 1, 2035.
(b) In evaluating the bids received through a solicitation, the department shall consider all of the following:
(1) For eligible energy resources dependent on the development of a project, that project’s viability, including, but not limited to, developer experience, developer financial strength and creditworthiness sufficient to eliminate financing contingencies, and the status of required permits and licenses, including a commitment to submit a consistency certification provided pursuant to the federal Coastal Zone Management Act of 1972 (16 U.S.C. Sec. 1451 et seq.) to the California Coastal Commission for offshore wind energy development projects, to the extent required.
(2) The ability to meet in-service dates offered during the solicitation and the ability to meet those in-service dates without escalation in cost.
(3) The useful life of the project.
(4) The capability to supply energy, capacity, and ancillary services at locations, times of day, and for durations that meet the state’s energy resource needs, as determined by the department and the commission.
(5) The bidder’s impact on the Offshore Wind Community Capacity Building Fund, established pursuant to Section 25993.1 of the Public Resources Code.

(5)

(6) The bidder’s economic and local community impact, workforce development needs and opportunities, environmental impact mitigation plan, and equipment acquisition and supply chain investment plan.

(6)

(7) A plan to contribute to large-scale, regional, or statewide baseline and ongoing monitoring of coastal waters and wildlife, if applicable.

(7)

(8) Any other criteria determined by the commission or the department.
(c) Every bid for the development of an eligible energy resource project selected by the department shall include the bidder’s certification that either of the following are true:
(1) The entirety of the construction of the eligible energy resource project is a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.
(2) The construction of the eligible energy resource project is not in its entirety a public work for which prevailing wages are required to be paid pursuant to Article 1 (commencing with Section 1720) of Chapter 1 of Part 7 of Division 2 of the Labor Code, but all construction workers employed on the project will be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate. If the eligible energy resource project is subject to this paragraph, for those portions of the eligible energy resource project that are not a public work, all of the following requirements shall apply:
(A) The bidder shall ensure that the prevailing wage requirement is included in all contracts for the performance of all construction work.
(B) All contractors and subcontractors shall pay to all construction workers employed in the construction of the eligible energy resource project at least the general prevailing rate of per diem wages, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.
(C) All contractors and subcontractors performing construction work on the eligible energy resource project shall employ apprentices at no less than the ratio required in Section 1777.5 of the Labor Code.
(D) Except as specified in subparagraph (F), all contractors and subcontractors performing construction work shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code, make those records available for inspection and copying pursuant to Section 1776 of the Labor Code, and furnish those payroll records to the Labor Commissioner pursuant to Section 1771.4 of the Labor Code.
(E) Except as specified in subparagraph (F), the obligation of the contractors and subcontractors to pay prevailing wages and employ apprentices may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the project, by an underpaid worker through an administrative complaint or civil action, or by a joint labor-management committee though a civil action pursuant to Section 1771.2 of the Labor Code. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code.
(F) Subparagraphs (D) and (E) do not apply if all contractors and subcontractors performing construction work on the eligible energy resource project are subject to a project labor agreement. The project labor agreement shall also include, but not be limited to, all of the following requirements:
(i) Provisions requiring payment of prevailing wages to all construction workers employed in the construction of the eligible energy resource project and for enforcement of that obligation through an arbitration procedure.
(ii) Targeted hiring provisions, including a targeted hiring plan, on a craft-by-craft basis to address job access for local, disadvantaged, or underrepresented workers, as defined by a relevant local agency.
(iii) Apprenticeship use provisions that commit all parties to increasing the share of work performed by state-registered apprentices above the state-mandated minimum ratio required in Section 1777.5 of the Labor Code.
(iv) Apprenticeship use provisions that commit all parties to hiring and retaining a certain percentage of state-registered apprentices that have completed the multicraft core preapprenticeship training curriculum described in Section 14005 of the Unemployment Insurance Code.
(d) Every bid for the development of an eligible energy resource project selected by the department shall include the bidder’s certification that a skilled and trained workforce will be used to perform all construction work on the eligible energy resource project, consistent with all of the following requirements:
(1) The bidder shall require in all contracts for the performance of work that every contractor and subcontractor at every tier will individually use a skilled and trained workforce to construct the eligible energy resource project.
(2) Every contractor and subcontractor shall use a skilled and trained workforce to construct the eligible energy resource project.
(3) Except as specified in subdivision (c), contractors and subcontractors that fail to use a skilled and trained workforce shall be subject to the penalties provided in Section 2603 of the Public Contract Code. Penalties for a contractor’s or subcontractor’s failure to comply with the requirement to use a skilled and trained workforce may be assessed by the Labor Commissioner within 18 months of completion of the project using the same procedures for issuance of civil wage and penalty assessments pursuant to Section 2603 of the Public Contract Code. Penalties shall be paid to the State Public Works Enforcement Fund.
(4) For purposes of this subdivision, a bidder shall be considered to be an “awarding body” under Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. Except as specified in paragraph (5), the bidder shall retain records, including copies of monthly reports, that demonstrate compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code while the eligible energy resource project or contract is being performed and for three years after completion of the eligible energy resource project or contract. The bidder shall submit these records immediately upon request of the commission. When submitted to the commission, these records shall be a public record under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) and shall be open to public inspection.
(5) Paragraphs (3) and (4) do not apply if all contractors and subcontractors performing work on the eligible energy resource project are subject to a project labor agreement. The project labor agreement shall also include, but not be limited to, all of the following requirements:
(A) Provisions requiring compliance with the skilled and trained workforce requirement and for enforcement of that obligation through an arbitration procedure.
(B) Targeted hiring provisions, including a targeted hiring plan, on a craft-by-craft basis to address job access for local, disadvantaged, or underrepresented workers, as defined by a local agency.
(C) Apprenticeship use provisions that commit all parties to increasing the share of work performed by state-registered apprentices above the state-mandated minimum ratio required by Section 1777.5 of the Labor Code.
(D) Apprenticeship use provisions that commit all parties to hiring and retaining a certain percentage of state-registered apprentices that have completed the Multi-Craft Core preapprenticeship training curriculum described in Section 14005 of the Unemployment Insurance Code.
(e) For purposes of this section, the following definitions apply:
(1) “Construction” means any new construction work and subsequent construction and construction maintenance work following initial completion that is contracted out to a contractor in the construction industry, including construction work on a barge, construction staging area, or construction area when being used as a construction work platform and the rigging and hoisting of construction materials directly from a barge, construction staging area, or construction area into the construction process for a construction project. “Construction” does not include the loading and unloading of cargo to and from vessels and the movement of cargo to and from vessels at any port facility to the cargo’s point of rest.
(2) “Project labor agreement” has the same meaning as defined in Section 2500 of the Public Contract Code.
(3) “Skilled and trained workforce” has the same meaning as defined in Section 2601 of the Public Contract Code.

SECTION 1.Section 80832 is added to the Water Code, to read:
80832.

(a)There is hereby established in the State Treasury the Local and Tribal Communities Offshore Wind Capacity Building Fund.

(b)Moneys in the Local and Tribal Communities Offshore Wind Capacity Building Fund may be used, upon appropriation by the Legislature, to award grants for the purpose of building capacity within local communities and tribal communities to engage in the process of offshore wind energy development, including, but not limited to, activities related to consultation, participation in project planning and development, programs connecting members of tribal nations and underrepresented communities to careers in science, technology, engineering, and math, and the implementation of local and tribal benefit agreements.

(c)Entities eligible for a grant from the Local and Tribal Communities Offshore Wind Capacity Building Fund include, but are not limited to, all of the following entities:

(1)Local communities located within ____ miles of the geographic center of a lease tract of applicable proposed or existing offshore wind energy developments, rural communities, disadvantaged communities identified pursuant to Section 39711 of the Health and Safety Code, and low-income communities as defined in Section 39713 of the Health and Safety Code.

(2)California tribes, including federally recognized tribes or California Native American tribes, identified on the contact list maintained by the Native American Heritage Commission.

(3)Nonprofit organizations that represent the interests of local communities or California tribes in relation to offshore wind energy development, if the organization meets all of the following criteria:

(A)Is recognized by the federal government as a 501(c) or 521(a) nonprofit entity pursuant to the Internal Revenue Code.

(B)Is registered and certified as a nonprofit organization by the State of California.

(C)Is not on the list of organizations for which the tax-exempt status is revoked that is published and maintained by the Franchise Tax Board pursuant to subparagraph (A) of paragraph (14) of subdivision (b) of Section 23772 of the Revenue and Taxation Code.

(d)The department shall establish a grant application process for the Local and Tribal Communities Offshore Wind Capacity Building Fund. The process shall ensure that the allocation of moneys is done in an equitable manner that takes into account the needs and capacities of the applying communities, tribes, and organizations.

(e)The department, in consultation with local communities, tribes, and other relevant stakeholders, shall develop guidelines for the use of moneys awarded, which shall be subject to review and amendment every three years.

(f)Notwithstanding Section 10231.5 of the Government Code, the department shall prepare and submit an annual report to the Legislature, in accordance with Section 9795 of the Government Code, on the implementation and effectiveness of the Local and Tribal Communities Offshore Wind Capacity Building Fund grant program pursuant to this section. The report shall include, but is not limited to, the total amount of funds allocated, a description of the funded activities, and an assessment of the impact of the fund on the capacity of local communities and tribes to engage in offshore wind energy development.