BILL ANALYSIS Ó
SB 1271
Page 1
Date of Hearing: June 23, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 1271 (Leno) - As Introduced: February 21, 2014
SENATE VOTE : 33-0
SUBJECT : Energy: alternative energy and advanced
transportation.
SUMMARY : This bill would authorize the Legislature to appoint
two additional members to the California Alternative Energy and
Advanced Transportation Financing Authority (CAEATFA).
Specifically, this bill :
1)Increases the number of CAEATFA members from five to seven.
2)Requires one additional member to be appointed by the Senate
Committee on Rules, with the other appointed by the Speaker of
the Assembly.
EXISTING LAW
a)Establishes CAEATFA with five members, including: the Director
of Finance, the Chairperson of the California Energy
Commission, the President of the California Public Utilities
Commission (PUC), the Controller, and the Treasurer (who
serves as chairperson of the authority). (Public Resources
Code § 26004)
b)Authorizes CAEATFA to provide financing to projects that
promote the creation of California-based manufacturing,
California-based jobs, the reduction of greenhouse gases, or
reductions in air and water pollution or energy consumption.
(Public Resources Code § 26011 and 26011.8)
FISCAL EFFECT : This bill is keyed non-fiscal.
COMMENTS :
1)Author's statement: "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
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to numerous companies. Some of these companies focus on
bringing manufacturing which creates jobs to 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 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."
2)The California Alternative Energy and Advanced Transportation
Financing Authority. CAEATFA was created by the Legislature in
1980. It provides financing through conduit or revenue bonds,
loan guarantees, and loan loss reserves. It also provides a
sales and use tax exemption to develop and commercialize
advanced transportation and alternative energy technologies.
The programs administered by CAEATFA help implement the
state's greenhouse gas reduction and clean energy goals. The
Governor's proposed budget of $27.5 million for CAEATFA in
2014-15 is funded primarily through transfers from the
California Energy Commission.
Current programs (and their enacting legislation) include:
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Sales Tax Exclusion (SB 71, Padilla, 2010 and SB 1128,
Padilla, 2012). This provides sales and use tax exemptions
for advanced manufacturing projects or for companies that
design, manufacture, produce or assemble advanced
transportation or alternative source products, components
or systems.
Clean Energy Upgrade Financing Program (AB 14 X1,
Skinner, 2011). This is a $25 million loan loss reserve
program to backstop loans made by participating financial
institutions for energy efficiency improvements and
distributed generation technology.
Property Assessed Clean Energy (PACE) Loss Reserve
Program (SB 96, Committee on Budget and Fiscal Review,
2013). This is 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.
Bond Financing. CAEATFA issues tax-exempt bonds to
finance green projects.
The five board members of CAEATFA include the State Treasurer,
State Controller, State Director of Finance, Chairperson of
the Energy Commission, and the President of the Public
Utilities Commission. Housed in the office of the State
Treasurer, they decide which projects to finance and meet once
a month, as necessary, to discuss the approval of projects.
The Authority now controls expenditures of over $125 million
annually.
1)CAEATFA as PUC program administrator. In 2013 the PUC issued a
decision on a pilot program to examine energy efficiency
financing. In Decision 13-09-044 the PUC approved seven pilot
projects for single family, master-metered multi-family, small
business, and "any size" business sectors. This decision also
designated CAEATFA as the statewide administrator for the
pilot program, pending CAEATFA receiving Legislative budget
authority. Subsequent to this decision, CAEATFA requested
budget authority for staffing and contracting to administer
the program.
Typically, authority to administer a program is sought through
either legislation or a Governor's budget proposal. Because
the PUC's decision did not occur in a manner timely for either
legislation or a budget proposal, the decision on whether
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CAEATFA should administer this program and whether the budget
authorization was reasonable, did not occur within the
timeframe anticipated by the PUC's decision.
Had Legislative representation been on the CAEATFA Board, the
representatives could have helped provided guidance to CAEATFA
on the timing and method of requesting the budget
authorization needed for this request. If, following the pilot
program, CAEATFA seeks to become a permanent administrator of
this program or expand its activities into other areas, it
would be valuable to include Legislative participation in
CAEATFA.
2)Value added. As other entities contain legislative appointees
(such as the CA Film Commission, CA Coastal Commission, CA
Transportation Commission, and High Speed Rail Authority), it
is sensible to consider CAEATFA similarly.
3)Support and opposition. In support, The Vote Solar Initiative
contends that adding Legislative appointments to serve as
members will add an important perspective currently absent
from the authority and ensure that the Legislature's vision
and intent is adequately represented regarding greenhouse gas
reductions.
REGISTERED SUPPORT / OPPOSITION :
Support
The Vote Solar Initiative (Vote Solar)
Opposition
None on file.
Analysis Prepared by : Brandon Gaytan / U. & C. / (916)
319-2083