BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1074 (Hueso) - Energy: Federal Trust Fund
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|Version: March 28, 2016 |Policy Vote: |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 2, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 1074, in Fiscal Year 2016-17, appropriates $13
million from the Federal Trust Fund (fund) to the State Energy
Resources Conservation and Development Commission (CEC) to award
contracts, grants, and loans for energy-related projects. The
bill also annually appropriates $2.5 million for this purpose
until all moneys in the fund have been encumbered or expended.
Fiscal
Impact:
One-time appropriation of $13 million (special fund).
Annual appropriation of $2.5 million (special fund) until
funds have been encumbered or expended.
Unknown, but potentially significant, costs to the CEC.
Background:
American Recovery and Reinvestment Act (ARRA) Investments: On
February 17th, 2009, President Obama signed the American
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Recovery and Reinvestment Act (ARRA), otherwise known as the
Stimulus Package, to restart the economy. The package contains
extensive funding for science, engineering research and
infrastructure, and more limited funding for education, social
sciences and the arts. States received discretionary funding
through the ARRA for a variety of programs, and certain programs
received funding through block grants.
Through 2013, the CEC administered $314 million in energy
efficiency and renewable energy pilot programs under ARRA. These
pilot programs influenced the administration of current and
ongoing programs, and budget proposals under other funding
sources, such as the Greenhouse Gas Reduction Fund (GGRF). When
ARRA ended in 2013, over $30 million of funds remained with
sub-recipients who administer the programs, mainly in revolving
loan funds. The CEC, as part of its evaluation of these
programs, determined that certain programs were under-performing
and is now proposing to use the funds for a different purpose.
Governor's Proposal. The CEC is requesting $8 million in federal
fund authority in the budget year, and $2.5 million through
2026-27, to implement both voluntary and mandatory programs to
increase energy efficiency in existing buildings, and to conduct
a competitive grant program to facilitate more effective use of
local government knowledge and authority to promote and conduct
energy efficiency improvements in existing buildings. The
proposal also requests federal fund transfer authority to shift
$5 million (ARRA funds) to the Department of General Services
for the Energy Efficiency State Property Revolving Fund loan
program. Staff Comments: The need to promote energy efficiency
at the local level is critical to making the state more energy
efficient.
The CEC has multiple programs that address this need, and the
Legislature has weighed in on many through statute. Over the
past year, several ideas have arisen including the idea that
this type of program should be directed toward education of
public and private entities, and with the idea of lasting
benefits to a broad spectrum of the state's energy users. To
that end, the Legislature should consider whether or not the CEC
should create a new program to allocate the funding, or rather
establish a legislatively-directed program that may be more
cross-cutting across all aspects of the local jurisdictions,
small and medium businesses, and state agencies.
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Proposed Law: This bill:
Appropriates, in FY 2016-17, $13 million from the fund to the
CEC to award contracts, grants, and loans for energy-related
projects.
Annually appropriates $2.5 million for this purpose until all
moneys in the fund have been encumbered or expended.
Related
Legislation:
SBX 11 (Evans, Chapter 11, Statutes of 2009), among other things
allowed the transfer of American Recovery and Reinvestment Act
of 2009 (ARRA) funds into the Orphan Underground Storage Tank
Cleanup Fund and allows those ARRA funds to be used in lieu of
state funds for orphan site cleanup.
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