BILL ANALYSIS Ó SB 771 Page 1 Date of Hearing: August 17, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 771 (Kehoe) - As Amended: June 30, 2011 Policy Committee: Natural ResourcesVote:9-0 Utilities and Commerce 13-0 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill revises the definition of projects available to receive financial assistance through the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA). Specifically, this bill: 1)Removes "ultralow-emission equipment" from the definition of renewable energy. 2)Defines "ultralow-emission energy" as energy generation based on natural gas turbines, landfill gas turbines, digester gas turbines, microturbines, natural gas engines, landfill gas engines, digester gas engines and fuel cells that the authority, in consultation with the Air Resources Board (ARB), determines to meet certain standards. 3)Adds ultralow-emission energy projects to the types of projects eligible for financial assistance from the authority. FISCAL EFFECT 1)Minor, absorbable special fund costs to CAEATFA and ARB. 2)Special fund cost pressure of an unknown amount, potentially in the millions of dollars, to fund ultralow-emission energy projects that, absent this bill, would not be eligible for CAEATFA financial assistance. COMMENTS SB 771 Page 2 1)Rationale . The author contends it appropriate to make eligible for CAEATFA financial assistance projects that, while not utilizing or generating renewable energy, reduce greenhouse gas emissions. 2)Background. CAEATFA was created in 1980 to finance projects utilizing alternative sources of energy, such as cogeneration, wind and geothermal power. In 1994, its duties were expanded to include the financing of "advanced transportation" technologies. During the energy crisis of 2001, its authority was again expanded to provide financial assistance to public power entities, independent generators, and others for new and renewable energy sources and to develop clean distributed generation. CAEATFA's authority had not been utilized recently. The Treasurer has tried to reinvigorate the authority and has launched a sales and use tax exemption program to stimulate green manufacturing, as authorized by SB 71 (Padilla, Chapter 10, Statutes of 2010). Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081