BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1271|
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THIRD READING
Bill No: SB 1271
Author: Leno (D)
Amended: As introduced
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 4/9/14
AYES: Wolk, Knight, Beall, DeSaulnier, Hernandez, Liu, Vidak
SUBJECT : Energy: alternative energy and advanced
transportation
SOURCE : Author
DIGEST : This bill increases the California Alternative Energy
and Transportation Financing Authority's (CAEATFA's) board from
five to seven members. One appointed by the Senate Committee on
Rules and another by the Speaker of the Assembly.
ANALYSIS : Existing law establishes CAEATFA which provides
financing through conduit or revenue bonds, loan guarantees,
loan loss reserves and a sales and use tax exemption for
facilities that use alternative energy sources and technologies.
CAEATFA's board is composed of five members, the State
Treasurer, State Controller, Director of Finance, Chairperson of
the Energy Commission, and President of the Public Utilities
Commission.
This bill adds one person appointed by the Senate Committee on
Rules, and one person appointed by the Speaker of the Assembly
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to CAEATFA's board increasing the membership from five to seven.
Background
While the Legislature created CAEATFA in 1980, it wasn't until
2008 that Governor Arnold Schwarzenegger and State Treasurer
Bill Lockyer announced that CAEATFA would use its existing
authority to grant a sales and use tax exemption for normally
taxable manufacturing equipment purchased by Tesla Motors
under a sale-leaseback agreement. Subsequently, the
Legislature directed CAEATFA to administer three new programs,
in addition to its conduit bond authority:
A $10 million loan loss reserve program that directs the state
to reimburse the original mortgage lender for the costs
associated with the Property Assessed Clean Energy program
assessments during a foreclosure (SB 96, Committee on Budget
and Fiscal Review, Chapter 336, Statutes of 2013).
A $25 million loan loss reserve program to backstop loans made
by participating financial institutions for energy efficiency
improvements and distributed generation technology (ABx1 14,
Skinner, Chapter 9, Statutes of 2011, First Extraordinary
Session).
Sales and use tax exemptions for manufacturers of renewable
technology (SB 71, Padilla, Chapter 10, Statutes of
2010), and advanced manufacturing (SB 1128, Padilla, Chapter
677, Statutes of 2012).
Comments
According to the author, "The California Alternative Energy and
Advanced Transportation Financing Authority (CAEATFA) is
responsible for incentivizing projects to develop alternative
sources of energy. CAEATFA has had a successful track record in
evaluating and granting tax treatments and funding which have
been extremely important to numerous companies. Some of these
companies focus on bringing manufacturing which creates jobs in
the state, like solar panel manufacturing plants. Other
programs administered by CAEATFA allow homeowners and businesses
to access loans under the Property Assessed Clean Energy (PACE)
program to finance energy efficiency and renewable energy
components. Since its establishment, and especially following
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the implementation of SB 71 (2009) and SB 1128 (2012), the
authority of CAEATFA and its funding ability have dramatically
expanded. The Authority now controls expenditures of over $125
million annually. Like the California Film Commission,
California Coastal Commission, California Transportation
Commission, and High Speed Rail Authority, CAEATFA is structured
to promote a certain interest throughout the state. However,
unlike the aforementioned commissions, CAEATFA's board does not
contain legislative appointees to aid in the authority's
decisions. Due to CAEATFA's additional responsibilities, it is
desirable and prudent that the Legislature be involved in the
decision processes to ensure funding is properly allocated. By
adding legislative appointees, the Legislature will have the
ability to maintain oversight to ensure the expanded authority
of CAEATFA is fully and correctly executed. The programs
administered by CAEATFA are the nuts and bolts implementation of
the state's greenhouse gas reduction and clean energy goals.
For this reason as well, legislative appointments created by SB
1271 would bring an important perspective to the board."
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 4/15/14)
The Vote Solar Initiative
AB:e 4/16/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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