BILL ANALYSIS �
AB 114
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Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 114 (Salas) - As Amended: April 23, 2013
SUBJECT : Proposition 39: implementation: workforce
development
SUMMARY : Establishes the Clean Energy and Jobs Workforce
Development Program (Workforce Program) within the Labor and
Workforce Development Agency (Labor Agency) to oversee the
implementation of the Proposition 39 (Prop 39) goal related to
job training and workforce development. Specifically, this bill :
1)Establishes the Workforce Program within the Labor Agency to
provide competitive grants to organizations with existing
workforce development programs to train and employ
disadvantaged youth, veterans, and others on energy efficiency
and clean energy projects, including the California
Conservation Corps, certified community conservation corps and
YouthBuild.
2)Requires the Labor Agency to establish and implement a
procedure to develop training goals, identify performance
metrics, institute a data tracking system, including a
geographic distribution, and evaluate training outcomes.
3)Specifies the Labor Agency shall administer grants to eligible
entities for the purposes of workforce development and job
training on energy efficiency and clean energy projects.
4)States the Labor Agency shall consult with the Chancellor of
the California Community Colleges (Community Colleges), the
State Department of Education (Education), the California
Energy Commission (CEC), and the California Public Utilities
Commission (PUC) to develop a competitive process to award
grants to eligible entities, and evaluate and select
applications for grants.
5)Requires funded projects serve low-income or unemployed
residents of an economically disadvantaged community.
6)Prioritizes how grants should be awarded to eligibility
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entities.
7)Requires grantees to submit a report to the Labor Agency
detailing the program results.
8)Specifies annual reporting requirements for the Labor Agency.
9)Establishes related definitions, findings and declarations.
EXISTING LAW :
1)Establishes the Clean Energy Job Creation Act to create
good-paying energy efficiency and clean jobs in California;
put California to work repairing and updating schools and
public buildings to improve efficiency and make clean energy
improvements; promote new private sector job creation through
energy efficiency improvements in commercial and residential
buildings; achieve maximum job creation and energy benefits;
and supplement, complement, and leverage existing energy
efficiency and clean energy programs. (Public Resources Code
26201)
2)Allocates up to $550 million to the Job Creation Fund in
fiscal years 2013-14, 2014-15, 2015-16, 2016-17, and 2017-18.
(Public Resources Code 26205)
3)Creates the Clean Energy Job Creation Fund to improve energy
efficiency and expand clean energy generation, including all
of the following:
a) Public schools, Universities, and Colleges: Energy
efficiency retrofits and clean energy installations, along
with related improvements and repairs that contribute to
reduced operating costs and improved health and safety
conditions
b) Other public buildings and facilities: Financial and
technical assistance including revolving loan funds,
reduced interest loans, or other financial assistance for
cost-effective energy efficiency retrofits and clean energy
installations on public facilities.
c) Job training and workforce development: Funding to the
California Conservation Corps, Certified Community
Conservation Corps, YouthBuild, and other existing
workforce development programs to train and employ
disadvantaged youth, veterans, and others on energy
efficiency and clean energy projects.
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d) Public-private partnerships: Assistance to local
governments in establishing and implementing PACE programs
or similar financial and technical assistance for
cost-effective retrofits that include repayment
requirements. Funding shall be prioritized to maximize job
creation, energy savings, and geographical and economic
equity. Where feasible, repayment revenues shall be used to
create revolving loan funds or similar ongoing financial
assistance programs to continue job creation benefits.
(Public Resources Code 26205)
4)Establishes criteria for expenditures from the funds:
a) Existing state and local government agencies, with
expertise in managing energy projects and programs shall
provide project selection and oversight.
b) All projects awarded funds are to be based on in-state
job creation and energy benefits for each project type.
c) All projects must be cost effective and may include
consideration of non-energy benefits, such as health and
safety.
d) All project contracts must include project
specifications, costs, and projected energy savings.
e) All projects shall be subject to audit.
f) Program overhead costs shall not exceed 4 percent of
total funding.
g) Funds can only be appropriated only to agencies with
established expertise in managing energy projects and
programs.
h) All programs must be coordinated with the CEC and the
California Public Utilities Commission (PUC) to avoid
duplication and maximize leverage of existing energy
efficiency and clean energy efforts.
i) Eligible expenditures include costs associated with
technical assistance, and with reducing project costs and
delays, such as development and implementation of processes
that reduce the costs of design, permitting or financing,
or other barriers to project completion and job creation.
(Public Resources Code 26206)
5)Creates a COB comprised of three members appointed by the
Treasurer, three members by the Controller, and three members
by the Attorney General. Each appointing office shall appoint
one member with expertise in building construction and design,
financial transactions and cost-effectiveness, and expertise
in energy efficiency and clean energy. The CEC and PUC each
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serve as ex office members.
6)The duties of the board include:
a) An annual review of all expenditures
b) And annual independent audit of the fund and a selection
of projects completed
c) A publicly available accounting of expenditures
d) An annual evaluation of the program to be provided to
the Legislature
(Public Resources Code 26210)
FISCAL EFFECT : Unknown.
COMMENTS :
1)Yes on 39 : In November 2012, California voters approved Prop
39 to close a corporate tax
loophole that previously allowed multi-state businesses to
select one of two different methods to determine the amount of
taxable income associated with California and taxable by the
state. Prop 39 now requires these businesses to determine their
California taxable income using a single sales factor method
which is estimated to increase the state's annual corporate tax
revenues by as much as $1.1 billion.
Prop 39 also specifies how a portion of this new revenue should
be spent. Half of the revenue generated from the measure - up to
$550 million - will be transferred to a new Clean Energy Job
Creation Fund to support projects intended to improve energy
efficiency and expand the use of alternative energy at public
schools, colleges, universities, and other public buildings, as
well as public-private partnerships and workforce training
related to energy efficiency. Prop 39 funding can only be
appropriated to agencies with established expertise in managing
energy projects. In addition, the programs must be coordinated
with the CEC, and PUC in order to avoid duplication among
agencies, and leverage existing energy efficiency and
alternative energy efforts.
However the state's funding obligations under Prop 98 is
impacted by Prop 39. In 1988, the voters passed Proposition 98,
modified it in 1990, which requires a minimum level of state and
local funding each year for school districts and community
colleges. This is commonly known as the Prop 98 minimum
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guarantee. This assures local school districts and community
colleges that they will receive at least a minimal level of
funding from the state and local governments. The Prop 98
guarantee can grow with increases in state General Fund revenues
(including those collected from state corporate income taxes).
Therefore, revenues generated by Prop 39 can affect the state's
Prop 98 funding requirements.
The Governor's 2013-14 Budget includes a plan to implement the
provisions of Prop 39, including funds allocated to energy
projects toward the Prop 98 minimum guarantee. The Governor also
proposes to designate all energy-related Prop 39 funds to K-12
schools ($400.5 million) and the community colleges ($49.5
million) for the next five years. The proposal would allocate
funds on a per student basis, which averages school districts
and community college district to receive $67 and $45 per
student, respectively.
The Legislative Analyst's Office (LAO) has raised serious
concerns with the Governor's Prop 39 proposal. In sum, the LAO
argues:
Governor's treatment of Prop 39 revenue to count toward
Prop 98 purposes is questionable and a departure from the
state's longstanding view of how revenues are to be treated
for the purposes of 98. In fact, it is contrary to what
the voters were told in the official voter guide as to how
the revenues would be treated.
The Governor's proposed treatment of funds, which is
based on the accounts the funds are deposited into, is
subject to manipulation.
The proposal excludes many eligible projects that could
potentially achieve a greater level of energy benefits,
fails to account for energy consumption differences, does
not sufficiently leverage existing programs and experience,
and excludes job training and workforce development funding
for disadvantaged youth, and veterans which is a primary
component of the Prop 39.
1)Prop 39 equals more clean energy jobs : Many special interests
tout the promise of clean
energy jobs when negotiating energy policy. The methodology
accounting for clean energy (i.e. green jobs) in this state has
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drawn much criticism and skepticism. Different surveys using
various definitions yield different results which make it
challenging to determine how many sustainable clean energy jobs
exist in the state. For example, the range of green jobs
includes transit operators, farmers, architects, etc. A 2010
report from California's Employment Development Department
(EDD), for example, found more than 263,000 people in the state
spent at least half of their time at work producing green
products or offering green services. In 2012, the U.S. Bureau of
Labor Statistics issued a report estimating there were 338,400
jobs in California offering green goods or services, accounting
for 2.3 percent of employment within the state. The state's
policies to reduce greenhouse gas emissions, increase the
procurement of renewable energy, and encourage sales of electric
cars have turned California into a leading market for clean
technology products and services.
California is still recovering from the recent economic
recession. Earlier this month, EDD reported California's
unemployment rate decreased to 9.4 percent. AB 114 proposes the
Workforce Program which seeks to fulfill the Prop 39 requirement
that requires a portion of the funding be dedicated to job
training and workforce development for our state's disadvantaged
youth, veterans and others with an emphasis on energy efficiency
and clean energy projects. It appropriates 10 percent of the
Proposition 39 revenue for the Workforce Program for each fiscal
year that revenue is deposited into the Job Creation Fund. The
bill targets projects that serve low-income or unemployed
residents of an economically disadvantaged community. The bill
specifies that first priority be given to projects providing
training on energy efficiency and clean energy projects
disadvantaged youth, veterans, or persons currently in the
military but is not inclusive of women, pre-apprenticeship or
job training programs. The author and this committee may wish
to specify first priority shall be given to projects providing
job training or pre-apprenticeship job training , or2) women,
bridge programs like California Conservation Corps, Certified
Community Conservation Corps, Youth-Build and other community
based training programs that serve disadvantaged youth, women,
veterans, and provide a path to apprenticeships or jobs in the
energy efficiency and clean energy sectors .
Second priority is given to projects providing upgrade training
on energy efficiency and clean energy projects to incumbent
workers enrolled in, or graduate from, state-certified
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apprenticeship programs. One of the objectives of Prop 39 was to
allocate revenues to improve energy efficiency and expand the
use alternative energy at public schools. Therefore, the author
and this committee may which to include training projects that
provide energy efficiency and clean energy training to incumbent
school employees who are responsible for operation of school
facilities.
2)Accountability and transparency : Although the bill does not
predicate how many jobs will be
created by this new Workforce Program, it does however, require
the Labor Agency to implement a process to establish job goals,
identify performance metrics, institute a data tracking system,
and evaluate outcomes of the training program. The author and
this committee may consider a technical amendment to revise this
section by as follows: (1) Establish and implement a procedure
to set explicit job training goals, identify performance
metrics, institute a data tracking system including geographic
distribution, and evaluate training outcomes .
The bill designates the Labor Agency, as lead, will administer
grants to eligible entities and collaborate with the Community
Colleges, Education, CEC and PUC for the purposes of workforce
development and job training on energy efficiency and clean
energy projects. This includes developing a competitive bid
process to award grants, evaluating and selecting applications
for grants. The bill, however, is silent on requiring the
collaborating agencies to design implement a Workforce Program
that is not duplicative of other statewide programs with similar
goals. In the spring of 2009, the Energy Commission, the EDD,
and the CWIB entered into a collaborative effort to combine
American Recovery and Reinvestment Act (ARRA) funding from the
State Energy Program and the Workforce Investment Act Governor's
Discretionary 15 Percent funds to launch the Clean Energy
Workforce Training Program. Coupled with a dollar-for-dollar
match leveraged from public-private partnerships, the goal of
the initiative was to promote the use of industry sector
strategies as the framework for addressing the need for skilled
workers in the industries related to energy efficiency, water
efficiency, and renewable energy (distributed generation and
utility-scale). Therefore, the author and this committee may
wish to amend the bill require the Labor Agency to ensure the
Workforce Program is complementary and not duplicative of other
similar statewide job training programs .
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This committee may also wish to suggest an amendment that
requires the Labor Agency, Community Colleges, Education, PUC
and CEC to require an applicant requesting a grant to disclose
if the entity is receiving incentives for energy efficiency or
clean energy job training projects from other local, state and
federal programs . This would not preclude the entity from
receiving a grant nor reduce the amount of the grant. It serves
primarily as an information tool for the Labor Agency.
After the first year of implementation of the Workforce Program,
the Labor agency is responsible for reviewing and assessing the
specified goals of the program and identifying problems and
barriers, as well as possible solutions to achieving those
goals. The bill does not specify when or how this report should
be published. The author and this committee may wish to add a
technical amendment requiring the report findings to be included
in the first annual report due July 1, 2015 . The Workforce
Program also requires grantees to submit to the Labor Agency an
annual report, beginning July 1, 2015, on the quantity and
quality of jobs created, demographic and geographic profile, the
number of workers trained, the costs associated with training
the workers, the number and type of credential and certificates
awarded, job placement numbers, and other specified criteria.
Although it is imperative for the report to include the
pertinent figures relating to costs and job creation, it is
equally important for the Legislature to know how many eligible
projects were denied grants awards and the reasons for the
denial. This will provide the Legislature with a complete view
of the Workforce Program's success as well as the lessons
learned. The author and this committee may wish to amend the
bill to require the Labor Agency to include the number of grant
applications denied as well as the reason for the denial in its
annual report to the Legislature and on its Internet Website .
1)Job Creation . This bill requires grant recipients to provide
an annual report to the Labor
agency on the quantity of jobs created including the wages and
benefits, and a number of other items.
According to an analysis published by the Energy Resources Group
at the University of California, Berkeley, of 15 job creation
studies, job studies use a variety of ways to calculate job
creation. They note that it is important to define employment
terms because there is often confusion about types of jobs and
job years because referring to 'jobs' created without duration
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can be misleading. One-job year is full time employment for one
year.
In addition, is it important to define whether the estimate of
jobs created refers to direct jobs, indirect jobs, or induced
jobs. For purposes of Clean Jobs Program jobs created is likely
to mean direct jobs, including those jobs created in the design,
construction/installation, project management, operation and
maintenance. Indirect jobs would be those created through
suppliers while induced jobs would be those created due to
expenditures in the general economy.
In order to ensure consistent, comparative results, the author
may wish to amend the bill to define what is expected in terms
of how job creation is to be calculated as follows: For purposes
of reporting job creation, the person or entity shall report
both the number of direct full-time jobs created and the
job-years for each job created.
Related legislation :
AB 39 (Skinner), pending in this committee, establishes a
program to be administered by the CEC for the distribution of
funds to clean energy projects undertaken by public schools,
with 75 percent to be awarded as grants and 25 percent to fund
revolving loans.
AB 239 (Hagman) requires the Office of Public School
Construction, in consultation with the CEC and the PUC, to
expend moneys to fund a zero-interest revolving loan program and
a grant program for school districts to perform energy
efficiency retrofit or clean energy installation projects at
public schools.
AB 293 (Allen), pending in this committee, requires the CEC to
develop a program to award funding on a competitive basis for
the purposes of Prop 39.
SB 39 (De Leon, 2013) establish a competitive grant program to
provide assistance to K-12 school districts for the purpose of
energy efficiency upgrade projects and a financing program by
evaluating the potential to fund energy efficiency projects for
K-12 schools, California Community Colleges (CCC) and campuses
of the University of California (UC) and the California State
University (CSU), through matching funds, low-interest loans, or
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other financing methods.
SB 64 (Corbett) designates the California Energy Commission as
the lead agency to establish a grant program to distribute
Proposition 39 funds to school districts cities and counties for
energy efficiency and clean energy technology in school and
municipal facilities.
SB 729 (Fuller) states the intent of the Legislature to enact
legislation to implement the provisions of Proposition 39.
AB 1186 (Skinner, 2012) was vetoed by Governor Brown. The
Governor stated, in his veto message, "Though well intended, it
jumps the gun by establishing a program before we are ready."
REGISTERED SUPPORT / OPPOSITION :
Support
Alliance for Boys and Men of Color
Briones International LLC
California Human Development (CHD)
California Youthbuild Coalition (CAYB)
Center for Employment Training (CET)
City of Antioch
CRLA Foundation
El Concilio of San Mateo County
Emerald Cities Bay Area Oakland Council
Green For All
Individual Letters (53 letters)
Institute for Sustainable Economic, Educational and
Environmental Design (I-SEEED)
La Cooperativa Campesina de California
Metropolitan Education District (MetroED)
Monica E. Wilson, Antioch City Councilmember
PolicyLink
Profile Research & Marketing (PRM)
Proteus, Inc.
Southern California Watershed Alliance
The Greenlining Institute
Urban Habitat
Valley LEAP, Latino Environmental Advancement and Policy Project
Opposition
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None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083