BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
363 (Hancock)
Hearing Date: 05/26/2009 Amended: 05/05/2009
Consultant: Brendan McCarthy Policy Vote: EU&C 7-0
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BILL SUMMARY: SB 363 creates a sub account within an existing
account used for energy efficiency loans. Funds from a specified
legal settlement would be deposited in the subaccount, and would
be available for low interest loans to schools for the
installation of solar energy systems.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Loan administration Absorbable within existing
resourcesSpecial *
Transfer of settlement Up to $70,000 General
funds
* State Energy Conservation Assistance Account
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense file.
Under current law, the Energy Commission manages a program to
provide low interest loans to local governments, schools, and
other public institutions. Low interest loans are provided to
pay for developing energy efficiency and distributed electricity
generation projects. The savings generated by these projects are
used to repay loans.
As a result of the state's energy crisis in 2000-2001, the state
settled a lawsuit with certain energy providers, known as the
Williams Settlement. The proceeds from this settlement were used
in a variety of ways to benefit electricity ratepayers and
support energy-related programs. In November 2008, the last
remaining $70 million from the settlement funds were transferred
to the General Fund for budget balancing purposes.
This bill would establish a new subaccount within the existing
program account. The bill directs that funds from the Williams
Settlement shall be deposited in the subaccount. This bill also
states that funds from the federal American Reinvestment and
Recovery Act may also be deposited in the subaccount. Funds in
the new subaccount would be available, upon appropriation by the
Legislature, to provide loans with an interest rate of 1.5
percent or less to schools for the installation of solar energy
programs.
Because the Energy Commission already manages a loan program in
this account, there are no anticipated additional staff costs to
operate the proposed program. However, because the remaining
proceeds of the Williams Settlement were previously transferred
to the General Fund, enactment of this bill may put pressure on
the General Fund by requiring those funds to be transferred to
the proposed subaccount.