BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 64
                                                                  Page  1

          Date of Hearing:   August 6, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                     SB 64 (Corbett) - As Amended:  July 2, 2014 

          Policy Committee:                             Natural  
          ResourcesVote:6-3

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill requires the Governor's Office of Business and  
          Economic Development (Go-Biz) to expend cap-and-trade auction  
          revenues appropriated from the Greenhouse Gas Reduction Fund  
          (GHGRF) for evaluating new technologies and providing grants for  
          proven technologies or products with potential to reduce  
          greenhouse gas emission.  Specifically, this bill: 

          1)Establishes the Clean Technology Innovation Account (Account)  
            within the GHGRF and requires the Legislature to appropriate  
            moneys to the Account from the GHGRF or other funds.

          2)Requires that funds in the Account be expended by GO-Biz, upon  
            appropriation, for the specified purposes including a grant  
            programs and evaluation activities.

          3)Requires GO-Biz to establish a Science and Business Review  
            Committee to provide programmatic and technical expertise and  
            specifies the membership of the Committee.  Requires the  
            Committee to develop criteria for GHG emissions evaluation and  
            efficacy programs, funding priorities and policy guidelines,  
            and evaluate and score funding requests.  Requires the  
            Committee to develop guidelines for the grant program.

          4)Requires GO-Biz to conduct a public meeting to consider public  
            comments before finalizing the guidelines for the grant  
            programs and requires the draft solicitation and evaluation  
            guidelines be posted on its website at least 30 days before  
            the meeting.  

          5)Exempts the criteria and guidelines adopted by GO-Biz under  








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            this bill from the Administrative Procedure Act.  

           FISCAL EFFECT  

          1)Significant cost pressures, likely in the tens of millions of  
            dollars range, to Go-Biz to fund the specified grants and  
            activities (GHGRF and other special funds).

          2)Significant administrative costs to Go-Biz, likely in the  
            hundreds of thousands of dollars range.  This bill limits  
            administrative costs to five percent of the funds appropriated  
            (GHGRF and other special funds). 
            

           
          COMMENTS  

           1)Purpose.   According to the author, California continues to be  
            a major force in fostering cutting-edge technologies, creating  
            jobs, and enhancing a healthy economic and environmental  
            future.   This bill will develop a program to help transfer  
            technology from innovations along the technology development  
            track, through to the end user.  
           
           2)Background.     As part of the recently passed 2014-15 Budget,  
            SB 862 (Budget and Fiscal Review) allocates cap-and-trade  
            revenues for the 2014-15 fiscal year and establishes a  
            long-term plan for the allocation of cap-and-trade revenues  
            beginning in fiscal year 2015-16.  

            SB 862 continuously appropriates 35% of cap-and-trade funds  
            for investments in transit, affordable housing, and  
            sustainable communities.  Twenty-five percent of the revenues  
            are continuously appropriated to continue the construction of  
            high-speed rail.  The remaining 40% will be appropriated  
            annually by the Legislature for investments in programs that  
            include low-carbon transportation, energy efficiency and  
            renewable energy, and natural resources and waste diversion.  

            The total amount appropriated under SB 862 is $872 million.   
            Funding for this bill could be appropriated from the 40% of  
            cap-and-trade revenues that will be annually appropriated by  
            the Legislature in subsequent budgets.
             
             If this bill is enacted this year, it is unlikely it would be  








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            funded prior to the 2015-16 Budget Act.  

           3)Go-Biz.    GO-Biz was established in 2011 (AB 29, Chapter 475)  
            as the lead state entity for economic strategy and marketing  
            on issues relating to business development, private sector  
            investment, and economic growth.  GO-Biz includes the Office  
            of the Small Business Advocate and the Office of Business  
            Assistance.   

            Currently GO-Biz includes units relating to business  
            investment services; permit streamlining; small business  
            assistance; and, encouraging innovation and entrepreneurship,  
            and international affairs and business development.  

            This bill would expand GO-Biz's duties and authority to  
            include providing grants and other financial assistance to  
            evaluate new technologies and products that have the potential  
            to reduce GHG emissions and provide grants for these  
            technologies and products.  It is not clear that GO-Biz has  
            the expertise or is the appropriate entity to evaluate grant  
            applications based on GHG emission reduction value.

             

             

           Analysis Prepared by  :    Jennifer Galehouse / APPR. / (916)  
          319-2081