BILL ANALYSIS Ó
AB 114
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Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 114 (Salas) - As Amended: May 8, 2013
Policy Committee: Natural
ResourcesVote:14-0
Utilities and Commerce 6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill 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) goals related to
job training and workforce development. Specifically, this bill:
1)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.
2)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.
3)Requires, for every year money is deposited into the Job
Creation Fund, 9.6 % of the revenue shall be available upon
appropriation by the Legislature for the Workforce Program
created by this bill (This is about $50 million.)
FISCAL EFFECT
1)Cost pressures in the $50 million range from Prop 39 proceeds
for this program.
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2)The Labor Agency would require additional resources to
administer a new program.
Prop 39 prohibits overhead costs in excess of 4% of the total
funding. Using this cap on administration, the Labor Agency
annual costs could be in the $2 million range.
COMMENTS
1)Purpose. This bill is intended to fulfill the Prop 39
requirement to dedicate a portion of the available funding to
job training and workforce development for disadvantaged
youth, veterans and others.
2)Prop 39. In November 2012, California voters approved Prop 39
to repeal the law allowing multi-state businesses to choose a
formula for calculating their California income tax liability.
Prior to Prop 39, businesses were able to calculate their tax
liability by using the formula that resulted in lower taxes
owed. Beginning in 2013, multi-state businesses are required
to use the single-sales factor method of determining taxable
income. This change is estimated to increase the state's
annual corporate tax revenues by as much as $1.1 billion.
This voter-approved measure dedicates $550 million, or 50% of
the annual increase in revenues, whichever is less, for fiscal
years 2013-14 through 2017-18, to the Clean Energy Job
Creation Fund (Fund) for projects that create energy
efficiency and clean energy jobs in California. Funds are
available upon appropriation by the Legislature and may
include:
a) Energy efficiency and clean energy installations at
public schools, universities and colleges, and other
public buildings.
b) Job training and workforce development on clean
energy and energy efficiency programs.
c) Financing and technical assistance to fund Property
Assessed Clean Energy (PACE) programs.
Prop 39 establishes a Citizens Oversight Board (COB), composed
of nine members appointed by the State Treasurer, the State
Controller and the Attorney General intended to ensure funds
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are used appropriately, and to evaluate the cost effectiveness
of projects.
3)Prop 98. Approved by the voters in 1988, Prop 98 assures
local school districts and community colleges will receive
minimum guaranteed funding from the state (roughly equivalent
to 40% of GF revenues). The increase in corporate tax
revenues resulting from Prop 39 will increase overall GF
revenues, thus increasing the minimum guarantee for schools.
In his proposed January budget, Governor Brown proposes to
count all Prop 39 revenue, including funds allocated to energy
projects, toward Prop 98, effectively raising the minimum
guarantee.
4)LAO Concerns. The Legislative Analyst's Office (LAO) has
raised a number of concerns with Governor Brown's Prop 39
proposal. Specifically, LAO argues that: a) voter-approved
limitations prohibit the use of all Prop 39 funds for Prop 98
purposes; b) the Governor's proposed treatment of funds, which
is based on the accounts the funds are deposited into, is
prone to manipulation; and c) the proposed allocation of funds
is inefficient and does not maximize potential benefits.
Instead, LAO suggests that Prop 39 revenue required for
transfer to the Fund should be excluded from the Prop 98
minimum guarantee. The LAO also suggests designating the CEC
as the lead agency for administering Prop 39's energy funds
and directing the CEC to promulgate a competitive grant
process for fund distribution
5)Related Legislation. The following 2013 bills propose various
approaches to distributing Prop 39 energy funds.
AB 29 (Williams) appropriates $152 million per year to public
higher education clean energy projects from Prop 39 clean
energy funds, with 50 percent to be awarded as grants and 50
percent to fund loans. AB 29 is now a two-year bill.
AB 39 (Skinner) establishes a program to be administered by
the CEC for the distribution of funds allocated by the Clean
Energy Jobs Act (Prop 39) to clean energy projects undertaken
by public schools. This bill will be heard by the
Appropriations Committee today.
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AB 239 (Hagman) transfers 50 percent of Prop 39 clean energy
funds to the Clean Energy School Fund to be expended by the
Office of Public School Construction (OPSC) to fund energy
efficiency retrofit or clean energy installation projects at
public schools, with 60 percent reserved for grants and 40
percent for loans. AB 239 is now a two-year bill.
AB 293 (Allen) requires the CEC to develop a program to award
funding on a competitive bases for the purposes of Prop 39.
This bill will be heard in the Appropriations Committee today.
SB 39 (De Leon), pending in the Senate Appropriations,
requires OPSC to distribute Prop 39 clean energy funds to K-12
public schools through competitive grants for energy
efficiency upgrade projects, with priority given to
disadvantaged school communities.
SB 64 (Corbett), pending in the Senate Appropriations
Committee, requires the CEC to provide financial assistance to
K-12 public schools or municipal facilities.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081