BILL ANALYSIS �
AB 293
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Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 293 (Allen) - As Amended: March 19, 2013
SUBJECT : California Clean Energy Jobs Act: implementation
SUMMARY : This bill would require the California Energy
Commission (CEC), in consultation with the California Public
Utilities Commission (PUC) and other appropriate state agencies,
to develop a program to award financial assistance using the
funds authorized by Proposition 39 (Prop 39, enacted in 2012).
Specifically, this bill :
a)Directs the CEC to develop a program that competitively
provides financial assistance using the funds authorized by
Proposition 39.
b)Directs the CEC to develop the program in consultation with
the PUC and other state agencies deemed appropriate by the
CEC.
c)Directs the CEC to provide a report to the Legislature, by
July 1, 2016 on the progress of the program, the applicants
applying for funding under the program, the exact disbursement
of funds and to whom, and recommendations to improve the
allocation of moneys in the Job Creation Fund.
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)
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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.
d) Public-private partnerships: Assistance to local
governments in establishing and implementing Property
Assessed Clean Energy (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)
1) 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
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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 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)
1) Creates a Citizens Oversight Board 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 who have
expertise in building construction and design, financial
transactions and cost-effectiveness, and expertise in
energy efficiency and clean energy. The CEC and PUC each
serve as ex office members.
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)Author's Statement. "It is necessary that tax dollars be spent
in a responsible manner to address proven needs and on valid
projects that will not be fraught with waste and fraud."
The author opines that "currently there is neither a required
justification nor need for spending the funds from this
account on proposed projects; and, the funds are currently set
to be distributed at the desire of the legislature."
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2)Governor's Prop 39 Proposal. In November 2012, California
voters approved Prop 39 to close a corporate tax loophole that
previously allowed multi-state corporations operating in
California to choose between two methods of determining
taxable income. This shift to a single sales factor method is
estimated to increase the state's annual corporate tax
revenues by as much as $1.1 billion.
An increase in state corporate tax revenues due to Prop 39,
however, can also affect the state's funding obligations under
Proposition 98. Approved by voters in 1988, Prop 98 assures
local school districts and community colleges that they would
receive at least a minimum level of funding from the state and
local governments (roughly equivalent to 40 percent of General
Fund revenues). Because an increase in corporate tax revenues
from Prop 39 can increase overall General Fund revenues, the
Prop 98 minimum guarantee for public education would increase
as well.
In his 2013-2014 proposed budget, Governor Brown proposes to
count all Prop 39 revenue, including funds allocated to energy
projects, toward the Prop 98 calculations, effectively raising
the minimum guarantee. The same budget plan would also apply
all revenue towards meeting the minimum guarantee: Estimated
Prop 39 energy project revenue for the next five years, $450
million in 2013-2014 and $550 million for each of the next
four years, would be distributed to K-12 school districts and
community colleges exclusively. The proposal would allocate
funds on a per student basis, which would be equivalent to $65
for each K-12 student and $45 for each community college
student.
The Legislative Analyst's Office (LAO) has raised a number of
concerns with Governor Brown's Prop 39 proposal.
Specifically, LAO argues that: 1) voter-approved limitations
prohibit the use of all Prop 39 funds for Prop 98 purposes; 2)
the Governor's proposed treatment of funds, which is based on
the accounts the funds are deposited into, is prone to
manipulation; and 3) 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
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and directing the CEC to promulgate a competitive grant
process for fund distribution.
3)To be consistent with other similar legislation. In other
related Assembly bills, this Committee has suggested
amendments that should also be included in this bill in order
to maintain consistency. The following amendments address
ensuring that the CEC enacts policies that inhibit waste,
fraud and abuse; provides transparency, ensures that
incentives available from other entities are used to reduce
the level of financial assistance needed; includes the loading
order to ensure all cost-effective energy efficiency and
demand response measures are implemented prior to funding on
site clean generation; and provides that the report will be
submitted to the Citizen Oversight Board, rather than the CEC,
along with specifying the content of the report.
26232. (a) On or before July 1, 2016, the commission shall
submit to the Legislature, pursuant to Section 9795 of the
Government Code, a report on the progress of the program
developed pursuant to Section 26231, the applicants applying
for funding under the program, the exact disbursement of funds
and to whom, and recommendations to improve the allocation of
moneys in the Job Creation Fund. The commission shall
administer grants, loans, or other financial assistance to
eligible institutions for the purpose of eligible projects
that create jobs in California by reducing energy demand and
consumption at eligible institutions in accordance with this
section.
(b) The commission shall establish criteria, including but not
limited to:
(1) Standard methods for estimating energy benefits, including
reasonable assumptions for current and future costs of energy.
(2) Existing qualifications, licensing and certifications for
contractors applicable to the occupations that perform the
work.
(3) Limits for grants or loans for each type of eligible
improvement.
(c) The commission shall maintain a public database of the
eligible entities that receive grants, loans, or other
financial assistance through this program. The database shall
include relevant metrics, to be determined by the commission,
for electric, gas, and cost savings of the projects.
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(d) Any incentives, available from federal, state, and local
government or from public utilities or other sources used by
the entity awarded a grant, loan, or financial assistance,
shall be used to reduce the amount of the grant awarded.
(e) Any eligible institution applying to the commission for a
grant, loan, or financial assistance to install solely a clean
energy technology shall demonstrate to the commission that the
institution has implemented all cost-effective energy
efficiency and demand response improvements.
26233. (a) No sooner than one year but no later than fifteen
months after a person or entity receives a grant, loan, or
other assistance from the Job Creation Fund, the person or
entity shall submit a report to the Citizens Oversight Board
created pursuant to Chapter 3 (commencing with Section 26210)
of Division 16.3 containing the following information, to the
extent applicable:
(1) The number of jobs created.
(2) The amount of energy saved.
(3) The amount of new clean energy generation installed.
(4) The number of trainees.
(5) The portion of financial assistance provided that was used
for administrative costs.
(6) The amount of time between awarding of the financial
assistance and the completion of the project or training
activities.
(b) 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.
(c) The Citizens Oversight Board shall report the information
it receives pursuant to subdivision (a) to the Legislature as
part of its responsibilities pursuant to subdivision (d) of
Section 26210. The board's report shall be submitted annually.
The report shall also be posted on a publicly accessible
Internet Web site.
4)Related Legislation. The following 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
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percent to fund loans.
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
AB 114 (Salas) establishes the Clean Energy Jobs and Workforce
Development Program within the Labor Agency and continuously
appropriates an unspecified amount from Prop 39 clean energy
funds.
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.
SB 39 (De Leon) 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) requires the CEC to provide financial
assistance to K-12 public schools or municipal facilities.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083