BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 64
          Author:   Corbett (D)
          Amended:  5/28/13
          Vote:     21

           
           SENATE ENERGY, UTILITIES & COMMUNIC. COMMITTEE  :  8-2, 4/16/13
          AYES:  Padilla, Cannella, Corbett, De León, DeSaulnier, Hill,  
            Wolk, Wright
          NOES:  Fuller, Knight
          NO VOTE RECORDED:  Pavley

           SENATE APPROPRIATIONS COMMITTEE  :  5-0, 5/23/13
          AYES:  De León, Hill, Lara, Padilla, Steinberg
          NO VOTE RECORDED:  Walters, Gaines


          SUBJECT  :    Proposition 39:  implementation

           SOURCE  :     Author


           DIGEST  :    This bill directs the California Energy Commission  
          (CEC) to develop and administer a competitive financial  
          assistance program consistent with Proposition 39 (Prop. 39) for  
          energy efficiency and clean energy onsite generation projects,  
          as specified; and provides that eligible facilities for the  
          competitive financial assistance program include, but are not  
          limited to, hospitals and wastewater treatment facilities and  
          facilities in public school districts, as provided.

           Senate Floor Amendments  of 5/28/13 eliminate the restriction on  
          the funding of K-12 projects and specifically allow onsite  
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          generation projects on K-12 school sites be funded.  

           ANALYSIS  :    

          Existing law:

          1. Establishes the Clean Energy Job Creation Fund (Creation  
             Fund) to provide financial assistance to projects that create  
             jobs in California improving energy efficiency and expanding  
             clean energy generation.  Up to $550 million is available for  
             fiscal years 2013-14, 2014-15, 2015-16, 2016-17, and 2017-18,  
             the source of which is increased state corporate tax  
             revenues.  (Prop. 39)

          2. Requires CEC to develop and administer a series of programs  
             to provide cost-effective energy efficiency and conservation  
             contracts, grants, and loans to eligible entities.  (Public  
             Resources Code Sections 25410-25474)

          This bill:

          1. Directs the CEC to develop and adopt guidelines for, and  
             develop and administer, a competitive financial assistance  
             program for energy efficiency and clean energy onsite  
             generation projects that are consistent with Prop. 39.

          2. Specifies that eligible facilities may include, but are not  
             limited to, hospitals, wastewater treatment facilities, and  
             facilities in public school districts, as specified. 

          3. Provides that the guidelines shall do all of the following:

             A.    Establish audit standards and procedures.

             B.    Ensure that the projects receiving financial assistance  
                are consistent with the state's loading order, as  
                described in the Energy Plan II jointly adopted by the  
                State Energy Resources Conservation and Development  
                Commission and the Public Utilities Commission (PUC).

             C.    Ensure that the projects are reliable and feasible with  
                total energy savings benefits exceeding project costs.

             D.    Establish energy savings measurement and verification  

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                standards.

             E.    If the project is for clean energy onsite generation,  
                require that the energy cost savings over 75% of the  
                expected life of the project will exceed the initial  
                investment.

             F.    Give priority to projects that have the highest energy  
                savings relative to the amount of public moneys used to  
                finance the project.
           
          Background
           
           Prop. 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), Prop. 39  
          requires that half of the annual revenue raised from the  
          measure, up to $550 million, be transferred to a new 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."  Prop. 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.

          Prop. 39 also requires that funded programs be coordinated with  

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          the CEC and PUC in order to avoid duplication and leverage  
          existing energy efficiency and alternative energy efforts.  In  
          addition, Prop. 39 states that the funding is to be appropriated  
          only to agencies with established expertise in managing energy  
          projects and programs.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No
          According to the Senate Appropriations Committee:

             Unspecified amounts from the Creation Fund (special fund)  
             for financial assistance for energy efficiency or clean  
             energy technology installation.

             Unknown costs to the CEC from the Creation Fund for the  
             development and administration of programs.

           SUPPORT  :   (Verified  5/28/13)

          Bloom Energy
          California State Association of Counties 
          CleanTECH San Diego
          Cities of Benicia, Blue Lake, Ceres, Cerritos, Chowchilla,  
            Cloverdale, El Centro, Fairfield, Goleta, Livingston, Lodi,  
            Santa Barbara, South San Francisco, Thousand Oaks, and Ventura
          DBL Investors
          Environmental Defense Fund
          ETAGen, Inc.
          Jons Manville - A Berkshire Hathaway Company
          League of California Cities
          Sonoma County Board of Supervisors
          SunPower Corporation
          Sunrun, Inc.


           ARGUMENTS IN SUPPORT  :    According to the Environmental Defense  
          Fund:

            A key piece of our organization's mission is to advance state  
            initiatives dedicated to developing a robust clean energy  
            economy in California, and we were proud to be part of the  
            broad coalition that worked to pass Proposition 39.  The  
            investments from Prop 39's passage will stimulate the  
            fast-growing clean energy economy, create thousands of  

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            in-state jobs, and produce immediate benefits to air quality  
            and public health for Californians.

            As the fastest growing part of the state economy, clean energy  
            and energy efficiency are creating jobs at home in  
            California-jobs that have proven to be more reliable and  
            resilient than other sectors in tough economic times.  By  
            investing in energy efficiency and clean energy generation in  
            the public sector, SB 64 will not only create jobs and reduce  
            greenhouse gas emissions, but will also cut energy bills for  
            local and state governments-saving municipal dollars and  
            ensuring dollars expended are not wasted on unnecessary energy  
            use.


          JG:k  5/29/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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