BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: SB 675
AUTHOR: Steinberg
AMENDED: As proposed
FISCAL COMM: Yes HEARING DATE: April 1, 2009
URGENCY: No CONSULTANT:Kathleen Chavira
NOTE : This bill has been double referred to the Senate
Education Committee and the Senate Rules Committee. A do
pass motion should include a referral to the Senate Rules
Committee.
SUBJECT : Clean Technology and Renewable Energy Job
Training, Career
Technical Education, and Dropout
Prevention Act
SUMMARY
This bill would enact the Clean Technology and Renewable
Energy Job Training, Career Technical Education, and
Dropout Prevention Act of 2010 to provide funds to
qualifying entities for construction or reconfiguring
facilities to provide program participants with skills and
knowledge necessary for successful employment related to
clean technology, renewable energy, or energy efficiency.
BACKGROUND
Proposition 1D, authorized by AB 127 (Nunez and Perata) and
approved by the voters in November 2006, provided $7.3
billion for K-12 school facilities, and established the
Career Technical Education Facilities Program, providing
$500 million to construct or modernize facilities for this
purpose.
Current law creates the Public Interest Research,
Development, and Demonstration Fund (PIER) for the purpose
of making awards for projects or programs that are not
provided for by competitive and regulated markets. The
revenue for this fund comes from electrical utility
corporations and is available upon appropriation by the
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Legislature.
ANALYSIS
This bill establishes the Clean Technology and Renewable
Energy Job Training, Career Technical Education and Dropout
Prevention Act of 2010. More specifically it:
1) Establishes the Clean Technology and Renewable Energy
Job Training, Career Technical Education and Dropout
Prevention fund in the State Treasury to provide
competitive grants for the purpose of constructing or
reconfiguring new facilities with a useful life
expectancy of at least 20 years or the
length of bond maturity to provide program
participants with skills and knowledge necessary for
successful employment related to clean technology,
renewable energy, or energy efficiency.
2) Defines various terms in the bill including:
a) Council : The Clean Technology and
Renewable Energy Job Training, Career Technical
Education and Dropout Prevention Council
comprised of the Secretaries of the Natural
Resources Agency (chair), Labor and Workforce
Development, Environmental Protection, the
Superintendent of Public Instruction, the
Chancellor of the California Community Colleges,
two members appointed by the Senate Rules
Committee and two members appointed by the
Speaker of the Assembly, as specified.
b) Eligible entity : Those eligible to
apply for the competitive grants to include a
public school serving any of grades 7-12, a
California community college, a public entity
providing career technical education including a
county office of education or school agency joint
powers authority, a publicly or investor owned
facility, a non-profit organization, a labor
organization, a business entity, a state-approved
apprenticeship program, a regional collaborative,
as specified, the California Conservation Corp or
a certified local conservation corp, a public
postsecondary educational institution or any
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other entity approved by the Council.
c) Program participants : Those served
by the eligible entities including middle or high
school pupils, community college students, job
trainees, incumbent workers, members of the
California Conservation corps, as specified, or
minors or adults under 22 years of age either on
probation or participating in programs that
include career technical education as an
alternative to conviction, incarceration or
adjudication, as specified.
3) Outlines various elements of the competitive grants
program proposed by the bill. Specifically it:
a) Requires the State Allocation
Board (SAB) to administer grant applications and
to implement the program pursuant to regulations
and guidelines established by the Council.
b) Requires grants be allocated on a
per square foot basis and prohibits any
requirement that students be unhoused or that
facilities meet any age requirements to receive a
grant under the program.
c) Establishes a maximum of $3
million per project per eligible entity for new
construction grants for either stand-alone
projects or as supplements to the per pupil
allocation under the existing new construction
program. Establishes a maximum of $1.5 million
per project per eligible entity for modernization
grants for the purpose of reconfiguration and
provides that the grant be supplemental to the
per pupil allocation provided under the existing
modernization program.
d) Requires the eligible entity to
contribute toward the project on a 50/50 match
basis and authorizes the local contribution to
come from private industry groups, the school
district or a joint powers authority and
authorizes the reduction, but not the elimination
of the match at the discretion of the Council.
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e) Authorizes the repayment of the
local contribution over time but prohibits the
State Allocation Board (SAB) from waiving the
local contribution on any basis.
f) Requires that applicants meet any
criteria established by the Council and also
enter into agreements, as specified, to engage in
specified activities related to education, job
training, or providing employment and career
opportunities to program participants.
g) Requires the Council to develop
guidelines for awarding the competitive grants,
specifies a number of elements to be included in
the grant application and requires priority be
given to projects serving students in grades
7-12, dedicated to dropout prevention and career
technical education, in communities with schools
that rank in the bottom three deciles of the
Academic Performance Index (API), as specified,
in communities with higher than average rates of
dropouts, low-income households, or other
challenges, as specified, and projects initiated
by the California Conservation Corps or a
certified local conservation corps.
h) Authorizes the Council to use
state agency personnel in administering outreach,
education, technical assistance, guideline
development and grant application review.
i) Requires that every proposed
activity or project financed be in compliance
with the California Environmental Quality Act,
and that real property acquisitions are from
willing sellers.
j) Authorizes up to 5 percent of
funds be allocated for administrative costs of
the program.
aa) Requires the body awarding a
contract for a public works project financed from
these funds to adopt and enforce a labor
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compliance program, as specified.
bb) Requires the chair of the Council
to provide for an annual independent audit of
expenditures from the fund.
4) Makes fiscal provision for the funding of the grant
program. Specifically it:
a) Authorizes the Council to incur
indebtedness and issue and renew negotiable
bonds, notes, debentures or other securities of
any kind or class.
b) Requires all indebted incurred to
be paid solely from moneys from the Public
Interest Research Development and Demonstration
Fund (PIER) and from funds appropriated by the
Legislature in the annual Budget Act for this
purpose and requires that proceeds from the sale
of these instrument be deposited into the Clean
Technology and Renewable Energy Job Training,
Career Technical Education and Dropout Prevention
fund in the State Treasury.
c) Specifies that the funds
appropriated by the Legislature in the annual
Budget Act for this purpose shall not exceed an
unspecified amount.
d) Authorizes the Legislature by
statute, to authorize the Council to issue bonds
in excess of the unspecified amount provided for
in the bill.
e) Declares that bonds issued do not
constitute a debt or liability of the state or
any political subdivision of the state other than
the Council and that the issuance of bonds under
these provisions does not obligate the state or
any political subdivision of the state to levy or
pledge of any form of taxation or to make any
appropriation for their payment.
STAFF COMMENTS
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1) Further clarification . According to information
provided by the author, it is the intent to use funds
from the Energy Commission's Public Interest Energy
Research Fund (PIER) to securitize an unspecified
amount in bonds to finance the competitive grant
program proposed by this bill. Essentially, it is the
intent of the author that bonds to support the program
created by the bill be backed by the revenues that
accrue to the PIER fund. According to the California
Energy Commission, its proposed FY 2009/10
budget includes $74.2 million in PIER funds to support
approximately 70 positions, operating and baseline
technical support contracts and $62.5 million for pass
through research, development and demonstration
projects.
Rather than a statewide general obligation bond, this
bill proposes the creation of a revenue backed bond
issuance, i.e. bonds backed by the revenue that
accrues to the PIER fund as well as appropriations
made by the Legislature.
2) Who guarantees repayment of the bonds ? This bill
specifically declares that the State bears no
financial responsibility for the bonds and has no
obligation to levy any taxes or make any appropriation
for their payment. The bill further declares that
debt or liability would only be incurred by the
Council. Staff notes, however, that the Council is
comprised of the leaders of various state agencies and
representation from the Legislature, all
state-affiliated entities. Is it reasonable to assume
that the state would face no pressure, both
politically and legally, to guarantee repayment of the
bonds issued by the Council? What controls exist on
the Council to ensure that it does not exceed the
capacity of the fund and appropriations to support the
debt it issues?
3) PIER Funds . PIER funds are currently used to fund
research projects to develop new energy technologies.
If enacted these funds would be redirected for the
purposes outlined in this bill. Current law restricts
the expenditure of these funds for specified purposes
from 2007 until 2012. It is unclear whether the
purposes outlined in this bill are consistent with the
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existing purposes.
4) Council vs. SAB . This bill creates a Council made up
of various leaders of state agencies and assigns them
a variety of responsibilities relative to the grant
program it creates, but assigns no staff to the
Council for these purposes. In addition, it assigns
responsibility for implementing the program developed
by the Council to the State Allocation Board, a policy
level body for programs administered by the Office of
Public School Construction. Would it make more sense
to assign these responsibilities to the SAB and to
have the Council act in an advisory capacity relative
to the competitive grant program?
5) Gift of public funds ? According to the author's
office, it is their intent that eligible entities must
enter into agreements with schools or colleges to
qualify for grants. However, the bill defines
eligible entities to include a number of non-profit
and private entities and does not clearly require that
the grant recipient be a public school, college or
other public entity. In order to ensure that there is
no gift of public funds the author may wish to
consider restricting eligibility for the grants to
public schools serving any of grades 7-12, California
community colleges, or other public entities providing
career technical education.
6) Prior legislation . This bill is very similar to SB
1672 (Steinberg) which was heard and passed by this
committee by a vote of 7-1 in April 2008. Although SB
1672 authorized a statewide obligation bond when heard
by this committee, it was subsequently amended and was
essentially identical to the bill before this
committee today. That bill was ultimately held under
submission in the Assembly Appropriations Committee.
SUPPORT
American Federation of State, County and Municipal
Employees
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Board of Governors, California Community Colleges
California Catholic Conference
California School Boards Association
Long Beach Community College District
San Francisco Unified School District
State Building and Construction Trades Council of
California
OPPOSITION
None received.