BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 1106
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          AB 1106 (Fuentes)
          As Amended  August 17, 2010
          2/3 vote.  Urgency
          |ASSEMBLY:  |     |(June 1, 2009)  |SENATE: |29-3 |(August 20,    |
          |           |     |                |        |     |2010)          |
                     (vote not relevant)
           Original Committee Reference:    U. & C.  

           SUMMARY  :  Authorizes the California Energy Resources  
          Conservation and Development Commission (CEC) to contract with  
          small business financial development corporations (FDCs) to  
          expend Alternative and Renewable Fuels and Vehicle Technology  
          Program (ARF Program) funds.  Specifically,  this bill  :

          1)Authorizes CEC to contract with FDCs, which have been  
            designated by the Business, Transportation and Housing Agency  
            (BTH), to expend ARF Program funds through the Small Business  
            Loan Guarantee Program, as specified.

          2)Removes the sunset on the CEC's authority to contract with the  
            State Treasurer (Treasurer) to expend ARF Program moneys  
            through programs administered by the Treasurer.

          3)Makes technical and nonsubstantive related changes including  
            double-jointing with SB 1340 (Kehoe) relating to electrical  
            vehicle charging infrastructure.

          4)Contains an urgency clause allowing this bill to take effect  
            immediately upon enactment.

           EXISTING LAW  :

          1)Establishes the ARF Program, administered by the CEC, for the  
            purpose of providing competitive grants, revolving loans, loan  
            guarantees, loans, or other appropriate funding measures to  
            specified public and private entities for the purpose of  
            developing and deploying innovative technologies that result  
            in the transformation of  California fuel and vehicle types to  
            help attain the state's climate change policies.


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          2)Provides, upon appropriation by the Legislature, approximately  
            $120 million annually through 2015 for the ARF Program.   
            Program moneys come from additional fees on vehicle  
            registrations, special identification plates for various  
            vehicles, and vessel registrations, plus $10 million annually  
            from the Public Interest Research, Development, and  
            Demonstration Fund, which is derived from a portion of  
            electric utility rates.

          3)Authorizes the CEC to contract with the Treasurer's Office  
            until January 1, 2012, to expend program funds.

          4)Provides that moneys allocated through the ARF Program shall  
            be awarded based on a set of priorities put forward in a  
            commission approved investment plan.  

          5)Establishes a small business loan guarantee program,  
            administered through BTH for the purpose of assisting small  
            businesses in obtaining long-term loans or lines of credit  
            from conventional financial institutions.  Under this program,  
            the 11 state approved FDCs are to serve as financial  
            intermediaries between the state, the small business, and the  
            financial institution.  

           AS PASSED BY THE ASSEMBLY  , this bill required the California  
          Public Utilities Commission to develop a feed-in tariff for  
          eligible renewable electric generation that is less than 20  
          megawatt in size.

           FISCAL EFFECT  :  According to the Senate Appropriations'  
          Committee, implementation of this measure would have $100,000 in  
          ongoing administrative costs to the CEC and BTH.  Unknown amount  
          of administration fees to the FDCs to deliver the program.

           COMMENT  :  FDCs are nonprofit corporations that have been  
          designated by BTH to market its small business capital program,  
          coordinate the packaging of the loan and loan guarantee  
          applications between the small business and financial  
          institution, issue the loan guarantees, and ensure that private  
          lenders have followed required procedures before requesting  
          payment on defaulted loans.  A total of 11 FDCs operate  
          throughout the state.
          This bill permits the CEC to utilize FDCs in the implementation  
          of the ARF Program.  By authorizing the use of FDCs to implement  


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          an additional state business capital program, the state gains a  
          strong regionally-based community development partner that has a  
          demonstrated ability to work with small businesses and private  
          lending institutions.

          The language that appeared in the measure as it passed the  
          Assembly has been deleted and these new provisions were added in  
          the Senate Appropriations Committee.  Subsequent policy and  
          fiscal committee hearings were held on the new language.

           Analysis Prepared by  :    Toni Symonds / J., E.D. & E. / (916)  

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