BILL ANALYSIS
AB 262
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Date of Hearing: April 27, 2009
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Felipe Fuentes, Chair
AB 262 (Bass) - As Amended: April 14, 2009
SUBJECT : American Recovery and Reinvestment Plan: energy
activities, programs, or projects.
SUMMARY : Provides direction and authorization to the California
Energy Commission (CEC) regarding the use of money received
pursuant to the federal American Recovery and Reinvestment Act
of 2009 (ARRA) for energy-related activities.
1)Requires that funds allocated to and received by the state for
the Energy Efficiency and Conservation Block Grant (EECBG)
Program pursuant to the Energy Independence and Security Act
of 2007 (EISA) to be administered by the CEC.
2)Limits the percent of the funds received for the EECBG Program
that may be expended for administrative purposes to 5 percent.
3)Requires the CEC to prioritize projects receiving funding
under the EECBG program based on the projects that render the
greatest cost-effective energy efficiencies.
THIS BILL:
1)Authorizes the CEC to award grants from funds received
pursuant to the Energy Independence and Security Act of 2007
(EISA) and ARRA, as well as enter into contracts to perform
functions required to promptly award energy efficiency and
conservation block grants.
2)Increases the percent of the funds received pursuant for the
EECBG that the CEC may use for administrative expenses to 10
percent.
3)Authorizes the CEC to adopt guidelines governing the award,
eligibility, and administration of funding pursuant to ARRA at
a publicly noticed meeting.
4)Repeals the requirement in current law that the CEC prioritize
projects receiving funding under the EECBG program based on
the projects that render the greatest cost-effective energy
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efficiencies.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author's office, AB 262 is in
anticipation of the $1.4 billion that California should be
receiving under the federal American Recovery and Reinvestment
Plan Act of 2009 directed for energy related activities. "These
programs and projects should be administered by the state's
energy and water agencies and must adhere to the principles of
accountability while promoting energy efficiency, water
conservation, the development and use of renewable energy
resources, the protection of the environment, and green job
training."
1) Background: The ARRA, signed into law on February 17, 2009,
was intended to stimulate the U.S. economy by creating and
retaining jobs in the wake of the economic downturn. The various
provisions of the act are worth approximately $787 billion, and
include over $61 billion in funding for a number of
energy-related programs. ARRA gives preference to activities
that can be started and completed expeditiously, including a
goal of using at least 50 percent of the funds made available by
it for activities that can be initiated not later than June 17,
2009.
The energy-related funding available in the ARRA is organized
into five basic categories: formula-based funds that are
provided directly to the state, competitive funds for which the
state is eligible but must apply, funding available to local
governments, and funding available to private entities and tax
credit bonds.
The EECBG program was created within the Department of Energy
(DOE) by the 2007 EISA. The program has both formula-based and
competitive funding components. The goals of the EECBG program
are to reduce fossil fuel emissions in a manner that is
environmentally sustainable, reduce the total energy use of
eligible entities; and to improve energy efficiency in the
building, transportation, and other energy-intensive sectors.
Eligible entities include states, local governments and Indian
tribes. In anticipation of federal funding that may have been
received pursuant to EISA, the Legislature passed AB 2176
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(Caballero), Chapter 229, Statutes of 2008, which required the
state to administer the funds in a manner consistent with
federal law and also placed a 5% limit on the amount of funding
that could be used for administrative purposes.
While the EECBG program was created in 2007, funding for the
program was not appropriated by Congress at that time. The
program was funded for the first time by ARRA, which
appropriated $3.2 billion for fiscal year 2009. The CEC has been
allocated $49.6 million and will make 60 percent of these funds
available to small cities and counties through a competitive
grant program pursuant to federal law. The remaining 40 percent
of this allocation will be spent at the CEC's discretion. There
was an additional $302 million allocated directly to large
cities and an additional $400 million is available nationally in
the form of competitive grants.
2) Administrative expenses: EISA limited the amount of EECBG
funds that eligible entities may use for administrative expenses
to not more than 10%. AB 2176 created a more stringent
limitation of 5%. This bill increases the limit to the full 10%.
3) Implementation via guidelines: This bill authorizes the CEC
to govern the award, eligibility, and administration EECBG
funding through the use of guidelines rather than the
regulations that would otherwise need to be developed in order
to appropriate this funding. The Legislative Analyst's Office
noted in their analysis of ARRA that in order for the CEC to be
able to spend the EECBG funds within the schedule that the
federal government has set, they would need to be able to issue
guidelines rather than regulation. The funds have to be
obligated by September 30, 2010.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Nina Kapoor / U. & C. / (916) 319-2083
AB 262
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