BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1074|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: SB 1074
Author: Hueso (D)
Amended: 5/31/16
Vote: 21
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/27/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
SUBJECT: Energy: Federal Trust Fund
SOURCE: Author
DIGEST: This bill appropriates, in Fiscal Year 2016-17, $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. This
bill also annually appropriates $2.5 million for this purpose
until all moneys in the fund have been encumbered or expended.
Finally, this bill allocates $2.5 million of the appropriated
monies to fund a program or efforts to recover lithium, metals,
agricultural products, and other beneficial minerals from highly
mineralized brines at an existing geothermal facility.
ANALYSIS:
Existing law:
1)Requires that all revenues received by the state pursuant to
specified federal laws be deposited in the Geothermal
Resources Development Account and continuously appropriated as
specified.
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2)Requires some of those revenues to be disbursed to counties in
which the federal government has leased land for geothermal
development and another portion of those revenues to be
available for distribution by the CEC as grants or loans made
to local jurisdictions or private entities.
3)Specifies purposes primarily relating to geothermal energy
development and mitigation for which recipients may expend
these moneys.
4)Authorizes the CEC to administer funds appropriated by the
federal American Recovery and Reinvestment Act of 2009 (ARRA)
for the federal Energy Efficiency and Conservation Block Grant
Program to award contracts, grants, and loans for
energy-related projects.
This bill:
1)Appropriates, in FY 2016-17, $13 million from the fund to the
CEC to award contracts, grants, and loans for energy-related
projects.
2)Annually appropriates $2.5 million for this purpose until all
moneys in the fund have been encumbered or expended.
3)Allocates $2.5 million of the appropriated monies to fund a
program or efforts to recover lithium, metals, agricultural
products, and other beneficial minerals from highly
mineralized brines at an existing geothermal facility.
Background
ARRA Investments: On February 17th, 2009, President Obama signed
the American 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
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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. 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.
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.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal:No
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According to the Senate Appropriations Committee:
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.
SUPPORT: (Verified 5/31/16)
None received
OPPOSITION: (Verified 5/31/16)
None received
Prepared by:Narisha Bonakdar / APPR. / (916) 651-4101
5/31/16 22:23:54
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