BILL ANALYSIS                                                                                                                                                                                                    







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       |Hearing Date:April 27, 2009    |                                          |
       |                               |              Bill No: SB 675           |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                         Senator Gloria Negrete McLeod, Chair

                        Bill No:        SB 675Author:Steinberg
                       As Amended:April 2, 2009 Fiscal:    Yes

       
       SUBJECT:  Energy job training.
       
       SUMMARY:  Enacts 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.


       Existing law:

       1)Establishes the California Energy Commission (Commission) as the  
         state's primary energy and planning agency.

       2)Within the Commission, creates the Public Interest Research,  
         Development and Demonstration program (PIER), funded by deposits from  
         electrical utility and natural gas corporations, to grant awards to  
         support cost-effective energy efficient and conversation projects and  
         programs and public interest research and development to improve  
         environmental quality, enhance electrical system reliability,  
         increase efficiency of energy using technologies, lower electrical  
         system costs or other tangible benefits.


       This bill:

         1)   Creates the Clean Technology and Renewable Energy Job Training,  
         Career Technical Education and Dropout Prevention Act of 2010.  

         2)   Makes a number of legislative declarations and findings  





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         regarding renewable energy, energy conservation, clean technology and  
         climate change policies, with a focus on California's leadership in  
         those areas, the need to use renewable energy and the technologies it  
         requires to reduce high school dropout and joblessness rates for the  
         state's young people and to develop the state's renewable energy  
         resources.

         3)   States legislative intent to stimulate the state's economy,  
         create tens of thousands of good paying jobs in industries and  
         businesses that are in compliance with the state's environmental  
         protection laws and regulations, to provide entrepreneurs and  
         employers the best-trained workforce in the United States and to  
         prepare young people and adults to work in clean, green industries  
         and professions.  

         4)   Creates the Clean Technology and Renewable Energy Job Training,  
         Career Technical Education and Dropout Prevention Fund (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.

         5)   Defines the following terms in the bill:

           a)   Board  refers to the State Allocation Board.

           b)   Clean technology projects  refers to the following

            i)     Energy audits determine energy savings that can be achieved  
              from projects funded under this program and that can be  
              recovered through utility bill financing.

            ii)    Retrofitting and weatherization activities that increase  
              energy efficiency and conservation.

            iii)   Energy and water efficient public buildings.

            iv)     Retrofitting and installing energy efficient household  
              appliances, windows, doors, insulation and lighting.

            v)     Retrofitting and installing water and energy conservation  
              technologies in existing residential, industrial, commercial and  
              public structures to improve efficiency, including the use of  
              energy and water management technologies and control systems.





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            vi)    The manufacture, sale, assembly, installation, construction  
              and maintenance of energy efficient technologies and renewable  
              energy facilities or the components of renewable energy  
              technologies.

            vii)   Projects related to energy efficient technologies or  
              practices and renewable energy production or the component parts  
              of renewable energy plants and energy distribution, including  
              energy storage, energy infrastructure, transportation, clean  
              vehicle technology, clean heat and power and water and  
              wastewater.

            viii)  Natural resource conservation projects related to climate  
              change such as fish and wildlife restoration, reforestation,  
              native species restoration, invasive species eradication,  
              community tree planting and other projects that fight climate  
              change.

           c)   Disadvantaged community  : A community with a median household  
            income that is less than 89 percent of the statewide average.   
             Severely disadvantaged community  means a community with a median  
            household income that is less than 60 percent of the statewide  
            average.

           d)   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, 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 (one who is a renewable energy projects employer  
            and another who is a member of a nonprofit environmental advocacy  
            organization) and two members appointed by the Assembly Speaker  
            (one who represents disadvantage communities and another from a  
            labor organization that provides state approved renewable energy  
            development pre-apprenticeship or apprenticeship programs)

           e)   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, the California Conservation Corps or a  





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            certified local conservation corps, a public postsecondary  
            educational institution or any other entity approved by the  
            Council.

           f)   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 or certified local conversation  
            corps, 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.

         6)   Outlines various elements of the competitive grants program  
         proposed by the bill.  Specifically it does the following:

          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. 

          d)   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. 

          e)   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.

          f)   Authorizes the repayment of the local contribution over time  
            but prohibits the SAB from waiving the local contribution on any  
            basis.

          g)   Requires applicants meet any criteria established by the  





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            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.

          h)   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), 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.

          i)   Authorizes the Council to use state agency personnel in  
            administering outreach, education, technical assistance, guideline  
            development and grant application review.

          j)   Requires every proposed activity or project financed be in  
            compliance with the California Environmental Quality Act and that  
            real property acquisitions are from willing sellers.

          aa)  Authorizes up to five percent of funds be allocated for  
            administrative costs of the program.

          bb)  Requires the body awarding a contract for a public works  
            project financed from these funds to adopt and enforce a labor  
            compliance program, as specified.

          cc)  Requires the Chair of the Council to provide for an annual  
            independent audit of expenditures from the fund.

       7)Makes the following provisions for the funding of the grant program.   


          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 indebtedness 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 instruments be deposited into  





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            the Clean Technology and Renewable Energy Job Training, Career  
            Technical Education and Dropout Prevention Fund.

          c)   Specifies 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 permit 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 any form of taxation or  
            to make any appropriation for their payment. 


       FISCAL EFFECT:  Unknown.  This bill is keyed "fiscal" by Legislative  
       Counsel.

       COMMENTS:
       

       1.Purpose.  According to the Sponsors, the  California Labor Federation   
         and the  State Building Trades and Construction Council of California  ,  
         this measure promotes career technical education and incentives  
         innovative public-private education and workforce preparation  
         partnerships with businesses, high schools, community colleges and  
         union apprenticeship programs.  They assert the measure ensures that  
         the investment in transportation, energy infrastructure, water,  
         industry, and many clean technologies produced by the implementation  
         of AB 32, voter approved infrastructure investment and the American  
         Recovery and Reinvestment Act, and also benefits California's most  
         underserved and at-risk communities.  

         The Sponsors also believe that all students benefit from academically  
         rigorous, relevant standards aligned in career technical education  
         (CTE) courses and further state that the public education system is  
         failing countless middle and high school students by not providing a  
         well-rounded education that engages and motivates students to finish  
         school.  They point to the record high dropout rate as an example of  
         the disconnect between current college bound curriculum emphasized in  
         schools and the career aspirations of California's student  
         population.





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       2.Background.  California Department of Education (CDE) 2006-07 data  
         shows that, statewide, California has a 67.6 percent high school  
         graduation rate and 24.2 percent dropout rate.  Graduation and  
         dropout rates vary among counties and the same data illustrates the  
         following dropout rate disparities among ethnic groups:  

              Ethnicity                               Graduation RateDropout  
              Rate
              White                    84.8%               15.2%
              African American         58.4           41.6
              American Indian               68.7           31.3
              Asian                    89.2                10.2
              Filipino                      88.1           11.9
              Hispanic/Latino               69.7           30.3
              Pacific Islander              72.1           27.9

         Other CDE data on career technical education (CTE) indicates that the  
         number of CTE classes declined approximately 24 percent between  
         1997-98 and 2006-07.  Recent research by Kenneth C. Gray and Edwin L.  
         Herr of Pennsylvania State University indicates that while many high  
         school students matriculate to college, relatively few go on to both  
         earn a college degree and work in a job requiring a college degree.   
         Gray and Herr argue that providing a range of educational coursework,  
         including opportunities for contextual and applied learning and  
         rigorous academics, creates more alternatives for high school  
         students and enables them to make more informed choices about career  
         pathways following high school. 

       3.California Research Bureau's (CRB) Careers Project Report.    Earlier  
         this year, the CRB released its Careers Project report which examined  
         the preparation all students in public middle and high schools  
         receive to explore career options and the relationship between that  
         preparation and California's state and regional economies.  The  
         report was done at the request of a bipartisan group of 11 members of  
         the California Legislature and funding support from the James Irvine  
         Foundation. The study consisted of three distinct phases - a  
         statewide survey of middle and high school counselors and principals,  
         an economic analysis and survey of representatives of business and  
         industry in California and school focus groups.

         The following are the findings relevant to this legislation:

         There are limited resources available to all students in grades seven  
         through 12 for career development. 





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              Half of all respondents reported that their schools offered a  
            curriculum for career development, less than half had developed  
            such a curriculum, and about half had provided career development  
            to all students.  This indicates that the provision of career  
            development information for all students regarding the various  
            careers and industries in the state is not a high priority for  
            school districts and schools. 

              Of the schools providing career development services, only ten  
            percent had evaluated the effectiveness of their career  
            development activities, programs or tools.  Moreover, of the  
            schools that had engaged with local businesses, about a fifth had  
            evaluated the effectiveness of these partnerships.

              Schools not providing career development to all students or not  
            engaging with entities in their local community (such as community  
            colleges, local businesses or other community organizations) might  
            if they had more staff.

              Principals and counselors concurred that students are  
            interested in receiving more career development information, since  
            this was the least cited reason for not providing career  
            development to all students.

       1.BP&ED Informational Hearing on Workforce Development.  On March 23rd,  
         the Committee on Business, Professions and Economic Development held  
         an informational hearing entitled "The Role of Private Education  
         Institutions in Preparing California's Diverse Workforce: Meeting the  
         Challenges of our Workforce and Job Training Needs."  The hearing  
         examined the ability of private postsecondary institutions to fill  
         the career preparation needs of California's workforce and evaluate  
         policy options that allow them to expand their workforce development  
         programs with the requisite amount of oversight required to protect  
         students.   

         Automotive, biotech, construction, health and manufacturing industry  
         representatives were invited to participate in the hearing and they  
         offered testimony on their industries' difficulty in difficulty in  
         hiring qualified employees.  They also provided the Committee with  
         information on workforce development programs in which they have  
         engaged to help address those workforce shortages.  This information  
         provided the basis for one of the hearing's main findings;  
         specifically, that industries are facing shortages in hiring workers  
         with the minimum skills needed for entry into the field.






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       2.California Energy Commission's PIER Program.  Created in 1974, the  
         California Energy Commission is the state's primary energy policy and  
         planning agency and among other things, is responsible for supporting  
         public interest energy research that advances energy science and  
         technology through research, development, and demonstration programs.  
          The Commission also supports renewable energy by providing market  
         support to existing, new, and emerging renewable technologies;  
         providing incentives for small wind and fuel cell electricity systems  
         and providing incentives for solar electricity systems in new home  
         construction.

         The Commission's Research Development and Demonstration Division  
         administers the PIER program and the PIER fund to provide grants for  
         energy-related research, development and demonstration efforts not  
         adequately provided by competitive and regulated markets.  The PIER  
         fund, which receives funds from electric and natural gas utilities,  
         allocates 83.5 million in public interest energy research funds  
         annually; $62.5 million for electricity and $21 million for natural  
         gas.

         The general goal of the program is to develop, and help bring to  
         market, energy technologies that provide increased environmental  
         benefits, greater system reliability, lower system costs and provide  
         tangible benefits to electric utility customers through the following  
         investments: 

              Advanced transportation technologies that reduce air pollution  
            and greenhouse gas emissions beyond applicable standards, and that  
            benefit electricity and natural gas ratepayers. 
              Increased energy efficiency in buildings, appliances, lighting,  
            and other applications beyond applicable standards, and that  
            benefit electric utility customers. 
              Advanced electricity generation technologies that exceed  
            applicable standards to increase reductions in greenhouse gas  
            emissions from electricity generation, and that benefit electric  
            utility customers. 
              Advanced electricity technologies that reduce or eliminate  
            consumption of water or other finite resources, increase use of  
            renewable energy resources, or improve transmission or  
            distribution of electricity generated from renewable energy  
            resources. 

       1.PIER funds.  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  





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         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.  

         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.  
          
        2.General Obligation Bonds for School Facilities.  Proposition 1D,  
         authorized by  AB 127  (Nunez and Perata. Chapter 35, Statutes of 2008)  
         and approved by the voters in November 2006 authorized the issuance  
         of $7.3 billion on general obligation bonds for K-12 school  
         facilities, and established the Career Technical Education Facilities  
         Program, which allocated $500 million for the construction and  
         modernization of career technical education facilities.
       
       3.Suggested Amendments.  This bill establishes the Clean Technology and  
         Renewable Energy Job Training, Career Technical Education and Dropout  
         Prevention Council (Council) comprised of the Secretaries of  
         specified state agencies and the Superintendent of Public Instruction  
                                                                                     (SPI).  Given the many responsibilities these individuals have and  
         the scheduling conflicts that may arise when trying to arrange  
         Council meetings, the Author may wish to consider amending the bill  
         to allow the designees of the various Secretaries and the SPI to sit  
         on the Council and act on their behalf.  

       4.Related legislation.   SB 1672  (Steinberg, 2008) would have  
         authorized, upon voter approval at 2010 statewide election, $2.25  
         billion worth of state general obligation (G.O.) bonds to fund  
         capital outlay projects at institutions offering career development  
         related to clean technology, renewable energy or energy efficiency  
         and to fund a revolving loan for capital outlay projects undertaken  
         by public and private entities involved in such career development.   
         The measure was held in the Assembly Appropriations Committee.

          AB 118  (N??ez, Chapter 750, Statutes of 2007) established the  
         Enhanced Fleet Modernization Program and the Air Quality Improvement  
         Program.  
          
         AB 32  (N??ez, Statutes of 2006, Chapter 488) enacted the Global  





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         Warming Act of 2006 (Act), which creates a statewide greenhouse gas  
         (GHG) emission limit to reduce emissions by 25 percent by 2020.  
        
         SB 1250  (Perata, Chapter 512, Statutes of 2006) authorized the  
         continued expenditure of funds collected pursuant to current law for  
         the Public Interest Energy Research program and the Renewable  
         Research Development and Demonstration program and provides policy  
         directions for these programs

          AB 1002  (Chapter 932, Statutes of 2000) imposed a surcharge on all  
         natural gas consumed in California to fund specified low-income,  
         energy efficiency, conservation and public interest research  
         programs.   

          AB 1890  (Chapter 854, Statutes of 1996) restructured the electrical  
         services industry in California in order to transition to competitive  
         markets by December 31, 2001, to lower the cost of electricity,  
         retain and attract jobs and to reduce power outages.

       5.Arguments in Support.  Several organizations (see below) have written  
         in support of this measure and contend that it would establish  
         partnerships between schools, ROC/Ps and various other entities to  
         work together to make California an international leader in clean  
         technology and renewable energy.  They state that this investment in  
         reducing the dropout rate, expanding workforce opportunities and  
         targeting climate change will create major economic stimulus for  
         clean energy and technology jobs that will improve the quality of  
         life for all Californians.

       6.Support if Amended.  The  California Manufacturers and Technology  
         Association  (CMTA) supports efforts to rebuild career and technical  
         education in California's schools and the need to address the state's  
         alarmingly high drop-out rate.  However, CMTA opposes the use of PIER  
         funds for this purpose and instead proposes that the programs in this  
         bill be funded through existing and future public education  
         resources.  CMTA states it looks forward to working with the Author  
         to identify viable and stable funding sources to support workforce  
         development goals and the economy.

         The  School for Integrated Academies and Technologies (SIATech)  also  
         has a support if amended position on SB 675.  SIATech is a  
         comprehensive high school program that partners with the Federal Job  
         Corps to provide a second chance for dropouts who wish to re-engage  
         in a rigorous academic program and receive an accredited California  
         education standards aligned diploma.  SIATech is asking that SB 675  
         be amended to include charter schools (such as theirs) that have  





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         specific workforce preparation roles in the eligible entity  
         definitions and refers to the current statutory reference to those  
         schools in Education Code  47605.1(g)(3), which reads as follows.  

         Education Code  47605.1(g). Notwithstanding any other provision of  
         law, the jurisdictional limitations set forth in this section do not  
         apply to a charter school that provides instruction exclusively in  
         partnership with any of the following:

            (1) The federal Workforce Investment Act of 1998 (29 U.S.C. Sec.  
         2801 et seq.)

            (2) Federally affiliated Youth Build programs.

            (3) Federal job corps training or instruction provided pursuant to  
         a memorandum of 
                 understanding with the federal provider.

            (4) The California Conservation Corps or local conservation corps  
         certified by the
                  California Conservation Corps pursuant to Sections 14507.5  
         or 14406 of the 
                  Public Resources Code. 

            (5) Instruction provided to juvenile court school pupils pursuant  
         to subdivision (c) of 
                 Section 42238.18 or pursuant to Section 1981 for individuals  
         who are placed in 
                 a residential facility

         Specifically, SIATech is requesting amendments to  102002 and  
         102004 that read:  "A charter school that provides instruction  
         exclusively in partnership with the programs identified in Education  
         Code  47605.1(g)(3)."
       

       SUPPORT AND OPPOSITION:
       
        Support:  


       American Federation of State, County, and Municipal Employees
       California Apollo Alliance
       California Association of Local Conservation Corps
       California Community Colleges
       California Labor Federation (Co-Sponsor)





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       California School Boards Association
       CALPINE
       Construction Employers' Association
       Long Beach City College District
       Los Angeles Unified School District
       Natural Resources Defense Council
       San Francisco Unified School District


       State Building and Construction Trades Council of California  
               (Co-Sponsor)
        Support if Amended  :

       California Manufacturers and Technology Association
       School for Integrated Academies and Technologies (SIATech)

         Opposition:  

        None received as of April 22nd.


       Consultant: Sieglinde Johnson