BILL ANALYSIS                                                                                                                                                                                                    




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          |SENATE RULES COMMITTEE            |                       SB 1074|
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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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