BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 39 (DeLeon/Steinberg) - Energy: school facilities: energy
efficiency upgrade projects.
Amended: May 7, 2013 Policy Vote: Ed 8-0, EU&C 11-0
Urgency: No Mandate: No
Hearing Date: May 23, 2013 Consultant: Marie Liu
SUSPENSE FILE.
Bill Summary: SB 39 would require the State office of Public
School Construction (OPSC), in consultation with the Public
Utilities Commission (CPUC), the State Department of Education
(SDE), California Energy Commission (CEC), and the State
Allocation Board (SAB), to administer a competitive grant
program for energy efficiency upgrade projects for K-12 schools,
funded by Proposition 39 revenues.
Fiscal Impact:
Annual costs likely in the hundreds of thousands to low
millions from the Clean Energy Job Creation Fund (special
fund) for OPSC for the administration of the program.
Annual costs of approximately $200,000 from the Clean
Energy Job Creation Fund for SDE staff and outreach travel.
Annual costs likely in the hundreds of thousands from the
Clean Energy Job Creation Fund for the State Allocation
Board to approve grants.
Minor and absorbable cost to the PUC for consulting with
OPSC.
One-time costs in the millions of dollars from the Clean
Energy Job Creation Fund in FY 2013-14 to the CEC to develop
criteria and guidelines.
Background: The California Clean Energy Jobs Act of 2012
(Proposition 39), which was approved by the voters in November
2012, requires most multistate businesses to determine their
California taxable income using a single sales factor method.
This change has the effect of increasing state corporate tax
revenue. For a five year period (FY 2013-14 through FY 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
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improve energy efficiency and expand clean energy generation.
Proposition 39 caps administrative costs at four percent of
total funding.
The Governor's revised proposed budget would exclusively
allocate Proposition 39 funds in the Job Creation Fund to energy
efficiency and alternative energy projects at K-14 schools. For
FY 2013-14, $413 million for K-12 schools and $51 million to CCC
would be appropriated on a per-student basis. The minimum grant
size would be $50,000 or $15,000 for districts with less than
200 students. Eight positions and $4 million are proposed for
CEC to provide technical assistance to small districts.
Proposed Law: This bill would require the creation of a
competitive grant program for school districts. The CEC would be
responsible for developing the criteria for project development,
ranking, approval, and energy savings reporting. The SDE, in
consultation with the OPSC, would be responsible for offering
technical assistance to applicants and providing outreach. The
SAB would be responsible for approving the grants and the OPSC
would be responsible for administering, processing, and
distributing funds to the school districts.
The grant program would be required to give priority to
applications for projects that would provide an energy upgrade
at a school facility with above average energy consumption, will
benefit an economically disadvantaged school community, are
located in an area with above average unemployment, include
training and information to pupils and classified school
employees, enhance workforce development or utilize members of
the California Conservation Corps, and are a joint partnership
between two or more agencies.
Related Legislation:
SB 35 (Pavley) would require the California State
University (CSU) and the California Community Colleges
(CCC), and requests the University of California (UC), to
develop and implement a near- and long- term strategy for
energy savings projects. Status: Sen. Education, hearing
canceled.
SB 64 (Corbett) would require the State Energy Resources
Conservation and Development Commission (CEC) to provide
financial assistance, from monies resulting from the passage
of Proposition 39, to school districts, cities, and counties
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to install energy efficiency or clean energy technology in
public schools or municipal facilities. SB 64 is on the
Senate Appropriations Suspense File.
SB 729 (Fuller) states Legislative intent to enact
Legislation to implement Proposition 39. Status: Senate
Rules Committee.
AB 29 (Williams) would allocate $152 million over five
years to the CEC to administer financial assistance for the
UC, CSU, and CCC, to reduce energy demand and consumption.
Status: Assembly Utilities and Commerce, hearing canceled.
AB 39 (Skinner) would direct the CEC to develop and provide
financial assistance to K-12 schools and community colleges
to improve energy efficiency, install clean energy
technology, or make energy system improvements. Status:
Assembly Appropriations.
AB 114 (Salas) would direct the Labor and Workforce
Development Agency to award grants to eligible entities for
projects to provide job training on energy efficiency and
clean energy projects that are located in economically
disadvantaged communities. Status: Assembly Appropriations.
AB 239 (Hagman) would require the Office of Public School
Construction to fund a zero-interest revolving loan program
and grant program for school districts to perform energy
efficiency retrofit or clean energy installation projects at
public schools. Status: Assembly Utilities and Commerce,
failed, reconsideration granted.
Staff Comments: This bill would have five agencies coordinate in
developing and administering a competitive grant program. Staff
notes that the bill expresses a specific role for all of the
five agencies except for the CPUC.
Proposition 39 capped administrative costs to 4% of the funds
made available. Given that Proposition 39 is anticipated to make
$550 million available for energy efficiency projects, 4%
translates to $22 million, a substantial amount which should be
more than sufficient for administrative costs. However, this
bill proposes a grant program that will be developed and
administered by five agencies. While each of these agencies
bring a unique perspective and expertise to the program, the
administrative costs for five agencies to co-develop and
administer a grant program is likely to be significantly more
expensive than a program administered by one agency.
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This bill seems to suggest that the CEC would likely only be
involved in in the initial year for the development of criteria
and guidelines, but the SDE, OPSC, and SAB would have ongoing
roles in the program. The CEC estimates that their
responsibilities can be completed with between one and three
percent of the allocated funding. SDE estimates costs of
approximately $200,000 annually. CPUC believes their costs will
be minor and absorbable. Staff estimates that OPSC costs will
likely be in the hundreds of thousands to low millions and SAB
costs are likely in the hundreds of thousands annually.
This bill would give priority to projects that are a joint
partnership between two or more agencies. Staff notes that the
benefit of that criterion is unclear as such a partnership does
not necessarily mean that a project will be more energy
efficient or more efficiently implemented.