BILL ANALYSIS                                                                                                                                                                                                    




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          |SENATE RULES COMMITTEE            |                       SB 1074|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                   THIRD READING 


          Bill No:  SB 1074
          Author:   Hueso (D) 
          Amended:  6/1/16  
          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. 


          Senate Floor Amendments of 6/1/16 delete recent amendments that  
          allocate $2.5 million for the purpose of recovering beneficial  
          materials from mineralized geothermal brines at an existing  
          facility.

          ANALYSIS:  Existing law 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:








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          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)Appropriates annually $2.5 million for this purpose until all  
            moneys in the fund have been encumbered or expended.


          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  
          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  








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          $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. 


          FISCAL EFFECT:   Appropriation:     Yes       Fiscal  
          Com.:YesLocal:No


          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  6/1/16)


          None received


          OPPOSITION:   (Verified  6/1/16)


          None received


          Prepared by:Narisha Bonakdar / APPR. / (916) 651-4101
          6/1/16 18:41:46









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