BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 771|
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                              UNFINISHED BUSINESS


          Bill No:  SB 771
          Author:   Kehoe (D)
          Amended:  9/2/11
          Vote:     21

           
           SENATE ENERGY, UTILITIES & COMM. CMTE  :  10-0, 05/03/11
          AYES:  Padilla, Fuller, Corbett, De León, DeSaulnier, 
            Pavley, Rubio, Simitian, Strickland, Wright
          NO VOTE RECORDED: Berryhill

           SENATE APPROPRIATIONS COMMITTEE  : Senate Rule 28.8

           SENATE FLOOR  :  38-0, 05/19/11
          AYES:  Alquist, Anderson, Berryhill, Blakeslee, Cannella, 
            Corbett, Correa, De León, DeSaulnier, Dutton, Emmerson, 
            Evans, Fuller, Gaines, Hancock, Harman, Huff, Kehoe, La 
            Malfa, Leno, Lieu, Liu, Lowenthal, Negrete McLeod, 
            Padilla, Pavley, Price, Rubio, Runner, Simitian, 
            Steinberg, Strickland, Vargas, Walters, Wolk, Wright, 
            Wyland, Yee
          NO VOTE RECORDED:  Calderon, Hernandez

           ASSEMBLY FLOOR  :  77-0, 9/7/11 - See last page for vote


           SUBJECT  :    California Alternative Energy and Advanced 
          Transportation
                        Financing Authority

           SOURCE  :     Clean Power Campaign


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           DIGEST  :    This bill specifies that landfill and digester 
          gas turbines, engines, and microturbines may be considered 
          renewable energy eligible for financial assistance under 
          the California Alternative Energy and Advanced 
          Transportation Financing Authority (CAEATFA) Act. 



           Assembly Amendments  (1) expand the definition of "renewable 
          energy" to include energy generation based on thermal 
          energy systems such as natural gas turbines; landfill gas 
          turbines, engines, and microturbines; digester gas 
          turbines, engines, and microturbines, and fuel cells, (2) 
          clarify that landfill and digester gas turbines, engines 
          and microturbines are eligible for funding, and (3) make 
          other clarifying and technical changes. 

           ANALYSIS  :    Existing law:

          1.Creates CAEATFA for the purpose of promoting the 
            development and utilization of alternative energy sources 
            and the development and commercialization of advanced 
            transportation technologies. CAEATFA consists of five 
            members:  the Director of Finance, the chairperson on the 
            California Energy Commission, the president of the Public 
            Utilities Commission, the State Controller, and the State 
            Treasurer, who serves as the chairperson of CAEATFA. 

          2.Permits CAEATFA to provide bond financing to lend 
            assistance to a participating party to enter into loan 
            agreements to finance projects that use an alternative 
            energy source or advanced transportation technologies. 

          3.Permits CAEATFA to approve a sales and use tax exemption 
            on tangible personal property utilized for the design, 
            manufacture, production, or assembly of advanced 
            transportation technologies or alternative energy source 
            products, components or system. This sales and use tax 
            exemption will sunset on January 1, 2021. 

          4.Requires CAEATFA to establish a renewable energy program 
            to provide financial assistance to public power entities, 
            independent generators, utilities, or businesses 
            manufacturing components or systems, or both, to generate 

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            new and renewable energy sources, develop clean and 
            efficient distributed generation, and demonstrate the 
            economic feasibility of new technologies, such as solar, 
            photovoltaic, wind, and ultralow-emission equipment. 

          5.Defines "renewable energy" as either of the following: 

             A.   A device or technology that conserves or produces 
               heat, processes heat, space heating, water heating, 
               steam, space cooling, refrigeration, mechanical 
               energy, electricity, or energy in any form convertible 
               to these uses, that does not expend or use 
               conventional energy fuels (e.g., oil, gasoline, 
               natural gas), and that uses biomass, solar thermal, 
               photovoltaic, wind, or geothermal electrical 
               generation technologies; or, 

             B.   Ultralow-emission equipment for energy generation 
               based on thermal energy systems such as natural gas 
               turbines and fuel cells. 

          This bill specifies that landfill and digester gas 
          turbines, engines, and microturbines may be considered 
          renewable energy eligible for financial assistance under 
          the CAEATFA Act.

           Comments
           
           California Alternative Energy and Advanced Transportation 
          Financing Authority (CAEATFA).   CAEATFA was created in 1980 
          with an authorization of $200 million in revenue bonds to 
          finance projects utilizing alternative sources of energy, 
          such as cogeneration, wind and geothermal power. It was 
          renamed in 1994 as currently titled and its charge expanded 
          to include the financing of "advanced transportation" 
          technologies.

          During the energy crisis of 2001, its authority was again 
          expanded, this time 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 is broad but in practice it has not 

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          been utilized until recently.  The State 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.  

          According to the author's office, a problem exists with 
          renewable programs and opines that as new technologies 
          evolve the renewable programs are not keeping pace leaving 
          some technologies that serve renewable goals ineligible for 
          specified programs particularly those that the author 
          categorizes as "clean continuous renewable energy 
          technologies."  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

           SUPPORT  :   (Verified  9/1/11)

          Clean Power Campaign (source) 
          State Treasurer Bill Lockyer
          City of San Diego
          Flex Energy, Inc.
          Marin Sanitary Service

           ARGUMENTS IN SUPPORT  :    The Clean Power Campaign states 
          that this bill a new a new category of "continuous clean 
          renewable energy" to recognize the benefits of technologies 
          that provide baseload electricity and maintain an emissions 
          profile equivalent or better than Air Resources Board 2013 
          standard.  By creating this new category and allowing for 
          its inclusion in selected clean technology programs managed 
          by the state, this bill will serve to achieve the state's 
          effort to improve air quality, accelerate the utilization 
          of clean technologies and promote economic growth by way of 
          investment in the clean technology sector.  


           ASSEMBLY FLOOR  :  77-0, 9/7/11
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, 
            Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Charles Calderon, Campos, 
            Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, 
            Eng, Feuer, Fletcher, Fong, Fuentes, Beth Gaines, 

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            Galgiani, Garrick, Gatto, Gordon, Grove, Hagman, 
            Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, 
            Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, 
            Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, 
            Mitchell, Monning, Morrell, Nestande, Nielsen, Norby, 
            Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, 
            Skinner, Smyth, Solorio, Swanson, Torres, Valadao, 
            Wagner, Wieckowski, Williams, Yamada, John A. Pérez
          NO VOTE RECORDED:  Donnelly, Furutani, Gorell


          RM:nl  9/8/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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