BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2227
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          ASSEMBLY THIRD READING
          AB 2227 (Quirk)
          As Amended May 23, 2014
          Majority vote 

           NATURAL RESOURCES   9-0         APPROPRIATIONS      12-0        
           
           ----------------------------------------------------------------- 
          |Ayes:|Chesbro, Dahle, Bigelow,  |Ayes:|Gatto, Bocanegra,         |
          |     |Garcia, Muratsuchi,       |     |Bradford,                 |
          |     |Patterson, Skinner,       |     |Ian Calderon, Campos,     |
          |     |Stone, Williams           |     |Eggman, Gomez, Holden,    |
          |     |                          |     |Pan, Quirk,               |
          |     |                          |     |Ridley-Thomas, Weber      |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :   Establishes procedures and guidance for the Citizens  
          Oversight Board (COB) created by the California Clean Energy  
          Jobs Act (Proposition 39).  Specifically,  this bill  :  
           
          1)Requires that funding for the COB shall be available, upon  
            appropriation by the Legislature, in the annual Budget Act.

          2)Specifies that COB members serve for a four-year term and may  
            be reappointed for two additional terms.  

          3)Requires that the COB principal office be located in the  
            California Energy Commission (CEC) office in Sacramento. 

          4)Specifies procedures for COB meetings and requires COB to meet  
            at least quarterly.  

          5)Authorizes COB to elect a chair and vice chair.  Specifies  
            that the chair oversee meetings, work with staff to ensure COB  
            resolutions are carried out, call special meetings if  
            necessary, appoint committee chairs, coordinate the hiring of  
            staff and consultants, and other duties as specified.  

          6)Requires the COB to: 

             a)   Review and evaluate the progress and status of projects;  










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             b)   Prepare, approve, and distribute annual reports of its  
               activities, findings, and recommendations to the Governor,  
               Legislature, and the public; and, 

             c)   Establish procedures for the preparation and  
               distribution of the annual reports.   
             
          7)Provides that the bill's provisions become inoperative on July  
            1, 2019, and are repealed as of January 1, 2020.

           EXISTING LAW  :  

          1)Pursuant to Proposition 39, which was approved by the voters  
            at the November 6, 2012, statewide general election:

             a)   Repeals prior law allowing multistate businesses to  
               choose a formula for calculating their California income or  
               franchise tax liability and, instead, requires those  
               businesses, starting in 2013, to utilize the "single sales  
               factor" (SSF) method of determining their taxable income.

             b)   Establishes the COB, composed of nine members appointed  
               by the State Treasurer, the State Controller, and the  
               Attorney General, as specified.  The COB is tasked with: 

               i)     Annually reviewing all expenditures from the Clean  
                 Energy Job Creation Fund (Fund); 

               ii)    Commission and review an annual independent audit of  
                 the Fund and of a selection of projects completed to  
                 assess the effectiveness of the expenditures; 

               iii)   Publish a complete accounting of all expenditures  
                 annually; and, 

               iv)    Submit an evaluation of the program to the  
                 Legislature that identifies any changes needed to meet  
                 the directives.

             c)   Dedicates $550 million or 50% of the annual increase in  
               revenues from the SSF, whichever is less, annually for five  
               fiscal years (2013-14 through 2017-18) to the Fund for  
               projects that create energy efficiency and clean energy  
               jobs in California, upon appropriation by the Legislature.   








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               The funding may include:

               i)     Energy efficiency and clean energy installations at  
                 public schools, universities and colleges, and other  
                 public buildings; 

               ii)    Job training and workforce development on clean  
                 energy and energy efficiency programs; and,

               iii)   Financing and technical assistance to fund Property  
                 Assessed Clean Energy (PACE) programs.

          2)Pursuant to SB 73 (Budget Committee), Chapter 29, Statutes of  
            2013: 

             a)   Specifies the allocation of Proposition 39 funding  
               available for energy efficiency projects at K-12 schools  
               and community college districts.  

             b)   Requires the CEC, in consultation with the California  
               Department of Education (CDE), the Chancellor of California  
               Community College districts, and the Public Utilities  
               Commission, to develop guidelines for contracts, as  
               specified.  

             c)   Appropriates $28 million from Proposition 39 funds to  
               the State Energy Conservation Assistance Account (ECAA) for  
               energy efficiency loans.  
              
              d)   Appropriates $3 million from Proposition 39 funds to the  
               California Workforce Investment Board to develop and  
               implement a competitive grant program for organizations  
               that prepare disadvantaged youth or veterans for  
               employment.   

          FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, initial increased costs for the CEC in the range of  
          $300,000 to $500,000 to staff the COB and perform the required  
          audits, evaluations, and reports.  Ongoing annual costs of up to  
          $300,000 (Proposition 39 funds).

           COMMENTS  :  The COB was established by voters in Proposition 39  
          and consists of nine members.  Three members are to be appointed  
          each by the State Controller, the State Treasurer, and the  








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          Attorney General.  To date, the Controller and Treasurer have  
          appointed members.  The purpose of the COB is to review Fund  
          expenditures, commission and review annual independent audits of  
          the Fund and selected projects, publish an accounting of annual  
          expenditures, and submit a program evaluation to the  
          Legislature. 

          While Proposition 39 created the COB and its purpose, it was  
          largely silent on the structure, procedures, and other details  
          relating to COB operations.  

          On December 19, 2013, CEC published Proposition 39: California  
          Clean Energy Jobs Act -2013 Program Implementation Guidelines in  
          accordance with SB 73.   The guidelines define how the state  
          plans to implement Proposition 39, provide information on the  
          types of awards and proposal requirements, explain screening and  
          evaluation criteria, describe the standards that will be used to  
          evaluate project proposals, and outline the award process.  

          According to the author, "this legislation provides all the  
          necessary detail for the board to accomplish its mission."  This  
          bill establishes general governance requirements for the  
          operations of the COB.  

           
          Analysis Prepared by  :  Elizabeth MacMillan / NAT. RES. / (916)  
          319-2092 


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