BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 262
                                                                  Page  1

          Date of Hearing:   May 6, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                     AB 262 (Bass) - As Amended:  April 14, 2009 

          Policy Committee:                               
          UtilitiesVote:11-3

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill:

          1)Authorizes the California Energy Commission (CEC) to award  
            grants from funds received by the state from the federal  
            American Recovery and Reinvestment Act of 2009 (ARRA) for  
            energy-related activities.

          2)Increases the percentage of funds received pursuant to the  
            federal Energy Efficiency and Conservation Block Grant (EECBG)  
            that CEC may use for administrative purposes from 5% to 10%,  
            consistent with the parameters of the federal law.

          3)Authorizes the CEC to adopt guidelines governing the award,  
            eligibility, and administration of funding pursuant noticed  
            meeting.

          FISCAL EFFECT  

          Potential significant reallocation of federal EECBG monies from  
          grants to administrative cost by increasing the percentage of  
          funds that may be used for this purpose.  Based on the $49.6  
          million received to date under the program through ARRA,  
          allowable administrative costs within this allocation would  
          increase by about $2.5 million.

           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 Act of 2009 (ARRA)  








                                                                  AB 262
                                                                  Page  2

          for energy related activities.  ARRA gives preference to  
          activities that can be started and completed expeditiously,  
          including a goal of allocating at least 50% of the funds 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 Energy Independence and Security Act.  In  
          anticipation of federal funding that may have been received  
          pursuant to EISA, AB 2176 (Caballero)/Chapter of 2008, which  
          required the CEC to administer the funds in a manner consistent  
          with federal law and also placed a five percent limit on the  
          amount of funding available for administrative purposes.  (The  
          EECBG program was funded for the first time, however, by ARRA.)   
          This bill increases allowable administrative expenses to 10%,  
          consistent with the federal law.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081