BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       SB 1074|
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                                UNFINISHED BUSINESS 


          Bill No:  SB 1074
          Author:   Hueso (D), et al.
          Amended:  8/19/16  
          Vote:     21 

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 5/27/16
           AYES:  Lara, Beall, Hill, McGuire, Mendoza
           NOES:  Bates, Nielsen

           SENATE FLOOR:  29-9, 6/2/16
           AYES:  Allen, Beall, Block, Cannella, De León, Galgiani,  
            Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso,  
            Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell,  
            Monning, Nguyen, Pan, Pavley, Roth, Stone, Wieckowski, Wolk
           NOES:  Anderson, Bates, Berryhill, Fuller, Gaines, Huff,  
            Morrell, Nielsen, Vidak
           NO VOTE RECORDED:  Moorlach, Runner

           ASSEMBLY FLOOR:  80-0, 8/29/16 - See last page for vote

           SUBJECT:   Energy:  Federal Trust Fund:  geothermal projects


          SOURCE:    Author


          DIGEST:  This bill allocates, in Fiscal Year 2016-17, $2.5  
          million of the funds appropriated to the California Energy  
          Commission (CEC) from the Federal Trust Fund (fund) to certain  
          projects that recover beneficial minerals from highly  
          mineralized geothermal brines. This bill also continuously  
          appropriates $2.5 million from the fund, beginning in Fiscal  
          Year 2017-18, until all funds are encumbered.










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          Assembly Amendments (1) remove the $13 million appropriation to  
          the CEC from the fund; (2) add to the list of eligible  
          expenditures, projects to recover lithium, metals, agricultural  
          products, and other beneficial minerals from highly mineralized  
          geothermal brines at a geothermal facility in existence on  
          January 1, 2017, that is in a disadvantaged community, and  
          provide local employment opportunities; (3) appropriate $2.5  
          million of the funds appropriated to the CEC to the  
          abovementioned projects, and require the CEC to issue a  
          competitive solicitation for projects by February 1, 2017; and  
          (4) make technical, conforming changes.


          ANALYSIS:
               
          Existing law:

          1)Authorizes specified federal funds available to the CEC to be  
            used to augment funding for any specified programs or measures  
            unless prohibited by the ARRA. (Public Resources Code Section  
            25463)


          2)Establishes the Geothermal Resource Development Account to  
            promote the development of new or existing geothermal  
            resources and technologies.  (Public Resources Code Section  
            3820 et seq.)


          3)Requires revenues from the Geothermal Resource Development  
            Account, disbursed to specified counties of origin and grants  
            or specified loans made to local jurisdictions or private  
            entities to be expended by recipients for the following  
            purposes:   


             a)   Undertaking research and development projects relating  
               to geothermal resource assessment and exploration, and  
               direct-use and electric generation technology.


             b)   Local and regional planning and policy development and  








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               implementation necessary for compliance with programs  
               required by local, state, or federal laws and regulations.


             c)   Identification of feasible measures that will mitigate  
               the adverse impacts of the development of geothermal  
               resources and the adoption of ordinances, regulations, and  
               guidelines to implement those measures.


             d)   Collecting baseline data and conducting environmental  
               monitoring.


             e)   Preparation or revision of geothermal resource elements,  
               or geothermal components of energy elements, for inclusion  
               in the local general plan, zoning and other ordinances, and  
               related planning and environmental documents.


             f)   Administrative costs incurred by the local jurisdiction  
               that are attributable to the development or production of  
               geothermal resources.


             g)   Monitoring and inspecting geothermal facilities and  
               related activities to assure compliance with applicable  
               laws, regulations, and ordinances.


             h)   Identifying, researching, and implementing feasible  
               measures that will mitigate the adverse impacts of that  
               development or production.


             i)   Planning, constructing, providing, operating, and  
               maintaining those public services and facilities that are  
               necessitated by and result from the development or  
               production.


             j)   Undertaking projects demonstrating the technical and  








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               economic feasibility of geothermal direct heat and  
               electrical generation applications.


             aa)  Undertaking projects for the enhancement, restoration,  
               or preservation of natural resources, including, but not  
               limited to, water development, water quality improvement,  
               fisheries enhancement, and park and recreation facilities  
               and areas.  (Public Resources Code Section 3823)


          This bill allocates $2.5 million, of the moneys appropriated to  
          the CEC from the fund in Fiscal Year 2016-17, and annually  
          thereafter, to be expended on specified projects, including  
          geothermal brine treatment projects.  Specifically, this bill: 

          1)Authorizes projects to recover lithium, metals, agricultural  
            products, and other beneficial minerals from highly  
            mineralized geothermal brines at geothermal facility in  
            existence on January 1, 2017, that is in a disadvantaged  
            community and provides local employment opportunities to  
            receive specified funds. 


          2)Allocates $2.5 million of the moneys appropriated to the CEC  
            in Fiscal Year 2016-17 from the fund to be expended on the  
            above-mentioned projects.


          3)Allocates $2.5 million annually to the CEC for specified  
            purposes, beginning in Fiscal Year 2017-18 until all moneys in  
            the fund have been encumbered or expended.


          4)Requires the CEC to issue a competitive solicitation for  
            specified projects no later than February 1, 2017. 

          Background

          American Recovery and Reinvestment Act Investments.  On February  
          17, 2009, President Obama signed the American Recovery and  
          Reinvestment Act (ARRA), otherwise known as the Stimulus  








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          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, more than $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. 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. 

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


          Appropriates $2.5 million annually (General Fund-fungible) from  
          the fund to the CEC until all funds are encumbered.


          SUPPORT:  (Verified  8/30/16)

          None received

          OPPOSITION:   (Verified  8/30/16)










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          None received

          ASSEMBLY FLOOR:  80-0, 8/29/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth  
            Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,  
            Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,  
            Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,  
            Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon


          Prepared by:Narisha Bonakdar / APPR. / (916) 651-4101
          8/30/16 20:22:29


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