BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 39 (Skinner) - Energy: conservation: financial assistance.
Amended: June 24, 2013 Policy Vote: EU&C 9-2
Urgency: No Mandate: No
Hearing Date: August 12, 2013 Consultant:
Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 39 extends the sunset date of the Energy
Conservation Assistance Account (ECAA) program from 2018 until
2020.
Fiscal Impact:
Annual costs in the low millions of dollars to ECAA
(special/General) for the administration of the program for
two years.
Delayed revision of at least $70 million of non-federal and
non-bond monies in ECAA to the General Fund.
Background: The ECAA program was established more than 30 years
ago by the California Energy Commission (CEC) to reduce
statewide energy consumption through energy efficiency programs.
The program makes low interest loans to cover up to 100% of a
project with a maximum repayment term of 15 years. A loan
repayment amount cannot exceed the estimated energy savings from
a funded program. Funding for ECAA has come from the General
Fund, bonds, and the American Recovery and Reinvestment Act of
2009 (ARRA). The 2013-14 Budget Act recently appropriated an
additional $28 million for 2013-14 to the ECAA program as a
result of Proposition 39 revenues.
The ECAA program sunsets on January 1, 2018. At that time, all
funds in the ECAA Account that were not precedes of bonds or
ARRA (unrestricted), revert to the General Fund. Bond funds,
once all bond obligations have been satisfied, also revert to
the General Fund. Remaining ARRA funds revert to the Federal
Trust Fund.
Proposed Law: This bill extends the sunset date of the ECAA
program from 2018 to 2020.
AB 39 (Skinner)
Page 1
Staff Comments: ECAA is a continuously appropriated account.
Therefore, an extension of the program is also an extension of
the appropriation.
Extending the sunset of the program also extends the
administrative costs of the program by two years. Currently, the
CEC is budgeted for $786,000 in positions and administration.
The addition of the Proposition 39 funds, however, will increase
the administrative costs of the program dramatically starting
next year. This year's Proposition 39 appropriation included
$3.8 million in administrative costs, but the necessary
administrative costs of the Proposition 39 in the future is
uncertain as the Proposition 39 program has yet to be fully
developed. However the total administration of the ECAA program
in including Proposition 39 funds in 2018 will likely be in the
low millions of dollars.
This bill also delays the revision of funds back to the General
Fund that is scheduled to happen at the end of the program. How
much is ultimately returned to the General Fund at the end of
the program, and on what schedule, depends on the terms of the
loans made up to the sunset date. Of the existing monies in
ECAA, there is $17.4 million in outstanding loans from ARRA
monies, $88.4 million from bond monies, and $44.4 million in
unrestricted monies. Only the unrestricted monies, and possibly
some of the bond monies, will revert to the General Fund at the
end of the program. The amount of outstanding loans in 2018 will
be significantly higher due to this year's $28 million
appropriation of Proposition 39 revenues that will be given out
as low- and no-interest loans to schools and future possible
Proposition 39 appropriations.