BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2227 - Quirk Hearing Date:
June 23, 2014 A
As Amended: May 23, 2014 FISCAL B
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DESCRIPTION
Current law establishes the Clean Energy Job Creation Fund to
provide financial assistance to projects that create jobs in
California improving energy efficiency and expanding clean
energy generation, with up to $550 million per year through
2017-18 from state corporate tax revenues. (Proposition 39,
Public Resources Code § 26200 et seq.)
Current law establishes the Citizens Oversight Board (Board)
with members appointed by the State Controller, Treasurer and
Attorney General to review and evaluate these projects under the
Clean Energy Job Creation Fund. (Proposition 39)
Current law implementing Proposition 39 specifies allocation of
funding available for energy efficiency projects at K-12 schools
and community college districts.
This bill requires, through July 1, 2019, that funding for the
Board be available, upon appropriation by the Legislature, in
the annual Budget Act, requires the Board to be located within
the California Energy Commission (CEC), and establishes a
governance structure with members serving four-year terms and
meetings at least quarterly.
This bill requires the Board to review and evaluate the progress
and status of projects, and submit annual reports of its
activities, findings, and recommendations to the Governor,
Legislature, and public.
This bill becomes inoperative on July 1, 2019, and is repealed
as of January 1, 2020.
BACKGROUND
Proposition 39 - This ballot initiative was approved by voters
at the November, 2012 election. Titled the California Clean
Energy Jobs Act of 2012, it requires most multistate businesses
to determine their California taxable income using a single
sales factor method. (Previously, state law allowed such
businesses to pick one of two different methods to determine the
amount of taxable income associated with California and taxable
by the state.) This change has the effect of increasing state
corporate tax revenue.
For a five-year period (2013-14 through 2017-18), Proposition 39
requires that half of the annual revenue raised from the
measure, up to $550 million, 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.
"Moneys in the fund shall be available for appropriation for the
purpose of funding projects that create jobs in California
improving energy efficiency and expanding clean energy
generation." Proposition 39 specifically requires that the funds
maximize energy and job benefits by supporting:
Energy efficiency retrofits and alternative energy
projects in public schools, colleges, universities, and
other public facilities;
Financial and technical assistance for energy retrofits;
and
Job training and workforce development programs related
to energy efficiency and alternative energy.
Proposition 39 also requires that funded programs be coordinated
with the CEC and California Public Utilities Commission (CPUC)
in order to avoid duplication and leverage existing energy
efficiency and alternative energy efforts. In addition,
Proposition 39 states that the funding is to be appropriated
only to agencies with established expertise in managing energy
projects and programs. Legislation implementing Proposition 39
allocated $450 million in the 2013-14 fiscal year for a K-14
education, with $400.5 million to the California Department of
Education (CDE) for allocation to K-12 school districts, charter
schools and county offices of education and $49.5 million to the
California Community Colleges (CCC) for allocation to community
college districts. The Governor requires CDE and CCC to allocate
these funds on a per student basis.
Board Established - Proposition 39 also established the Board
consisting of nine members with three appointed each by the
State Controller, the State Treasurer, and the Attorney General.
The purpose of the Board 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. Proposition
39 stated that the Board is required to:
Annually review all expenditures from the Job Creation
Fund;
Commission and review an annual independent audit of the
Job Creation Fund and of a selection of projects completed
to assess the effectiveness of the expenditures in meeting
the objectives of this division;
Publish a complete accounting of all expenditures each
year, posting the information on a publicly accessible
Internet Web site; and
Submit an evaluation of the program to the Legislature
identifying any changes needed to meet the objectives of
this division.
COMMENTS
1. Author's Purpose . According to the author, Proposition
39 established the Board in order to review and evaluate
projects funded by the Clean Energy Job Creation Fund but
failed to include language implementing the Board's
mandate. This bill provides the necessary structure so the
Board can begin to evaluate, review and report how the
funds are spent. According to the author, this bill
establishes general governance requirements for the
operations of the Board and "provides all the necessary
detail for the board to accomplish its mission."
2. Ensuring Transparency and Accountability . The voter
information guide for Proposition 39 discussed the role of
the Board in providing strict accountability for use of
taxpayer funds for authorized energy efficiency programs.
However, the proposition was largely silent on the
structure and operation of the Board. This bill
establishes governance structure for the Board that is
fairly standard for state agencies, including Board member
terms for four years and three terms total, selection of a
chair and vice chair, establishing committees, and
reimbursement of member expenses. To ensure transparency,
this bill makes the Board and its committees subject to the
Bagley-Keene Open Meeting Act, which requires open and
public meetings and public agendas posted prior to
meetings. On page 3, lines 22 to 26, the bill restates the
Board's obligation to comply with specific agenda and
closed session requirements of Bagley-Keene, which appears
to be a technical error. Thus, the author and committee
may wish to consider amending the bill to strike lines 22
to 26 on page 3 of the bill.
3. Transparency of the Board's Records . This bill does not
specify that the Board also is subject to the California
Public Records Act, which would enable the public to
further review the Board's activities and ensure that it
serves its prescribed mission of providing oversight for
expenditure of taxpayer funds dedicated to energy
efficiency. Thus, the author and committee may wish to
consider amending the bill to make the records of the Board
subject to the California Public Records Act.
ASSEMBLY VOTES
Assembly Floor (77-0)
Assembly Appropriations Committee (12-0)
Assembly Natural Resources Committee
(9-0)
POSITIONS
Sponsor:
Western States Council of Sheet Metal Workers
State Controller's Office
Support:
California School Employees Association
Oppose:
None on file
Jacqueline Kinney
AB 2227 Analysis
Hearing Date: June 23, 2014