BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 675| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 675 Author: Steinberg (D), et al Amended: 4/2/09 Vote: 21 SENATE EDUCATION COMMITTEE : 7-0, 4/1/09 AYES: Romero, Alquist, Hancock, Liu, Maldonado, Padilla, Simitian NO VOTE RECORDED: Huff, Wyland SENATE BUS., PROF. & ECON. DEVEL. COMMITTEE : 8-1, 4/27/09 AYES: Negrete McLeod, Wyland, Corbett, Correa, Florez, Oropeza, Romero, Yee NOES: Aanestad NO VOTE RECORDED: Walters SENATE APPROPRIATIONS COMMITTEE : 6-3, 1/21/10 AYES: Kehoe, Corbett, Leno, Liu, Price, Yee NOES: Cox, Denham, Walters SUBJECT : Energy job training SOURCE : Author DIGEST : This bill enacts 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 CONTINUED SB 675 Page 2 clean technology, renewable energy, or energy efficiency. Funds will be provided in the form of grants for $3 million for qualifying new education-related modernization projects. This bill creates a council for the purposes of developing guidelines to implement this act and will empower to issue and renew negotiable bonds, notes, debentures, or other sources of security that will be secured by monies appropriated by the Legislature from the Public Interest Research, Development, and demonstration fund. ANALYSIS : Proposition 1D, authorized by AB 127 (Nunez and Perata), Chapter 35, Statutes of 2006, 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. Existing law creates the Public Interest Research, Development, and Demonstration Fund 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 Legislature. 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: (1) Council : The Clean Technology and Renewable SB 675 Page 3 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. (2) 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 other entity approved by the Council. (3) 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: (1) Requires the State Allocation Board (SAB) to administer grant applications and to implement the program pursuant to regulations and guidelines established by the Council. SB 675 Page 4 (2) 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. (3) 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. (4) 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. (5) Authorizes the repayment of the local contribution over time but prohibits the SAB from waiving the local contribution on any basis. (6) 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. (7) 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 SB 675 Page 5 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. (8) Authorizes the Council to use state agency personnel in administering outreach, education, technical assistance, guideline development and grant application review. (9) 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. (10) Authorizes up to five percent of funds be allocated for administrative costs of the program. (11) 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. (12) 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: (1) Authorizes the Council to incur indebtedness and issue and renew negotiable bonds, notes, debentures or other securities of any kind or class. (2) Requires all indebted incurred to be paid solely from moneys from the Public Interest Research Development and Demonstration Fund 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 SB 675 Page 6 Energy Job Training, Career Technical Education and Dropout Prevention fund in the State Treasury. (3) Specifies that the funds appropriated by the Legislature in the annual Budget Act for this purpose shall not exceed an unspecified amount. (4) Authorizes the Legislature by statute, to authorize the Council to issue bonds in excess of the unspecified amount provided for in the bill. (5) 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. Comments According to information provided by the author's office, this bill is intended to address two key state priorities: (1) reducing the high school dropout rate by encouraging the construction or reconfiguration of facilities that will provide engaging career technical education to students, and (2) developing a skilled workforce that is prepared to take advantage of opportunities created by emerging green technologies. According to 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. They also believe that all students benefit SB 675 Page 7 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. 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 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. Prior legislation A similar bill was SB 1672 (Steinberg) of 2008 which died in the Assembly Appropriation Committee. SB 675 Page 8 FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the California Energy Commission, its proposed FY 2009-10 budget includes $74.2 million in the Public Interest Research Development and Demonstration Fund (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. PIER funds are currently used to fund research projects to develop new energy technologies. These funds will be redirected for the purposes outlined in this bill. Currently law restricts the expenditure of these funds for specified purposes from 2007 until 2012. To make the funding mechanism of this bill viable, it will likely be necessary to extend the statutory life of the PIER fund. As the bill does not currently specify an amount of debt that will be issued by the Council, the exact cost of this bill is unknown. Assuming, for one example, that the intent was to use approximately half of the available amount of the PIER fund to pay-off the debt issued by the Council at an interest rate of five percent, the Council could issue $450 million in bonds. The total repayment over 20 years will be $722 million. Of course, the actual amount will be dependent on future legislative action concerning the fund and the authority ultimately granted to the Council. In addition to the costs of debt repayment, the Office of Public School Construction indicates costs of $900,000 for administering grant applications and operating the program. SUPPORT : (Verified 1/25/10) American Federation of State, County and Municipal Employees, AFL-CIO Apollo Alliance Association of California School Administrators Bloom Energy California Association of Local Conservation Corps. California Association of Regional Occupation Centers and Programs California Catholic Conference California Community Colleges SB 675 Page 9 California Correctional Peace Officers Association California Labor Federation California League of Conservation Voters California School Boards Association Calpine Corp. City of Sacramento Construction Employers' Association Elk Grove Unified School District Ella Baker Center for Human Rights - Green Collar Jobs Campaign Green Technical Education and Employment Long Beach Community College Los Angeles Community College District Los Angeles Unified School District Los Rios Community College District Metropolitan Education District Natural Resources Defense Council Sacramento Conservation Corps San Francisco Board of Supervisors San Francisco Unified School District School for Integrated Academics and Technologies Sierra Club State Construction and Building Trades of California ARGUMENTS IN SUPPORT : Several organizations have written in support of this bill and contend that it establishes 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. DLW:do 1/25/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****