BILL ANALYSIS                                                                                                                                                                                                    



                                                                            
         AB 1106
                                                                Page  1

        CONCURRENCE IN SENATE AMENDMENTS
        AB 1106 (Fuentes)
        As Amended  August 17, 2010
        2/3 vote.  Urgency
         
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        |ASSEMBLY:  |     |(June 1, 2009)  |SENATE: |29-3 |(August 20,    |
        |           |     |                |        |     |2010)          |
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         (vote not relevant)

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        |COMMITTEE VOTE:  |4-0  |(August 25, 2010) |RECOMMENDATION:   |concur    |
        |                 |     |                  |                  |          |
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        (Economic Development)

        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  
          CHAPTERING CONFLICTS 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  








                                                                            
         AB 1106
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          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.

        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  








                                                                            
         AB 1106
                                                                Page  3

        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 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 IN THE SENATE.

        THE ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT AND THE  
        ECONOMIC ALSO HEARD THE MEASURE PURSUANT TO ASSEMBLY RULE 77.2 AND  
        VOTED TO CONCUR IN THE SENATE AMENDMENTS.


         Analysis Prepared by  :    Toni Symonds / J., E.D. & E. / (916)  
        319-2090 


        FN: 0006762