Golden State Energy Financing Power - Golden State Energy Act - CA Public Utilities

Section § 3440

This law states that Golden State Energy is not required to pay franchise or corporate income taxes. Additionally, any debt issued by them is not subject to state income tax. However, the property they use does not get a tax exemption and is still taxable under specific sections of the California Constitution and Revenue and Taxation Code.

(a) Golden State Energy shall be exempt from franchise and corporate income tax pursuant to Section 23701 of the Revenue and Taxation Code. Indebtedness issued by Golden State Energy and any transfer thereof shall be exempt from income taxation of every kind by the state.

(b) Property used exclusively by Golden State Energy in carrying out its purposes in Section 3402 shall not be exempt from taxation under subdivision (b) of Section 4 of, and Section 5 of, Article XIII of the California Constitution and Section 214 of the Revenue and Taxation Code.

Golden State Energy tax exemption franchise tax corporate income tax debt issuance state income tax property taxation California Constitution Revenue and Taxation Code Section 3402 Section 23701 Section 214 Article XIII

(Added by Stats. 2020, Ch. 27, Sec. 12. (SB 350) Effective January 1, 2021.)

Section § 3442

This law states that any money owed by Golden State Energy is not considered a debt of California or its local governments. This means the state is not responsible for paying it back, and the debt doesn't impact the state's credit. Money to pay back these debts will come only from Golden State Energy's own available funds. The state or any local government won't be required to collect taxes or allocate money to cover these debts.

(a) Golden State Energy indebtedness shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, or a pledge of the faith and credit of the state or of any political subdivision of the state.

(b) Golden State Energy indebtedness shall be payable solely from the funds available to it.

(c) The issuance of indebtedness shall not directly, indirectly, or contingently obligate the state or any other political subdivision of the state to levy or pledge any form of taxation or to make any appropriation for its repayment.

Golden State Energy indebtedness state debt liability political subdivision faith and credit funds repayment taxation obligation appropriation non-liability of state debt issuance debt repayment public utility corporation financial obligations state financial responsibility local government liability

(Added by Stats. 2020, Ch. 27, Sec. 12. (SB 350) Effective January 1, 2021.)

Section § 3444

This law states that certain government code regulations do not apply to bonds or debts issued for Golden State Energy. Instead, Golden State Energy can choose private companies to help manage these financial activities if it benefits their customers. They can pick entities like underwriters or financial advisers to assist in issuing bonds or other debts. The payment for these services can come from the revenue generated by these financial transactions.

(a) Chapter 9 (commencing with Section 5700) of Division 6 of Title 1 of the Government Code shall not apply to any bonds or other forms of indebtedness issued for the benefit, or on behalf, of Golden State Energy.

(b) Notwithstanding any other law, whenever Golden State Energy deems that it will be in the best interests of its ratepayers, it may exercise an exclusive right to select and retain, or have any conduit issuer issuing bonds or other forms of indebtedness for its benefit or on its behalf select and retain, the services of private entities, including, but not limited to, underwriters, bond counsels, tax counsels, disclosure counsels, financial advisers, bond insurers, or other entities providing risk management services for bonds or other forms of indebtedness issued for its benefit or on its behalf. Payment for any of these private entities may be made out of the proceeds of the sale of the bonds or other forms of indebtedness issued for the benefit, or on behalf, of Golden State Energy.

Golden State Energy bonds indebtedness ratepayers private entities underwriters bond counsels tax counsels disclosure counsels financial advisers bond insurers risk management services conduit issuer exclusive right payment from proceeds

(Added by Stats. 2020, Ch. 27, Sec. 12. (SB 350) Effective January 1, 2021.)

Section § 3446

California promises that as long as Golden State Energy owes money, the state won't change or undermine the company's ability to honor its agreements with those who lent it money. This means the state won't interfere with the rights or remedies of these lenders. Golden State Energy has the option to include this promise in any documents related to the debt.

While any indebtedness issued by or on behalf of Golden State Energy remains outstanding, the State of California pledges to the holders of any such indebtedness that the state will not limit or alter the rights vested in Golden State Energy to fulfill the terms of any loan agreement, lease, or other contract with the holders of such indebtedness, or in any way impair the rights or remedies of those holders or of the parties to the related loan agreement, lease, or contract. Golden State Energy may include this pledge in any instrument under which that indebtedness is incurred or issued or other documents entered into in connection with that indebtedness as a covenant for the benefit of the holders thereof.

Golden State Energy debt state pledge to lenders loan agreements protection rights of indebtedness holders lenders remedies debt instruments state interference loan contract protection debt covenant creditor rights assurance financial agreement stability

(Added by Stats. 2020, Ch. 27, Sec. 12. (SB 350) Effective January 1, 2021.)