BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       SB 1207|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   THIRD READING 


          Bill No:  SB 1207
          Author:   Hueso (D) 
          Introduced:2/18/16  
          Vote:     27 

           SENATE ENERGY, U. & C. COMMITTEE:  9-0, 3/29/16
           AYES:  Hueso, Morrell, Cannella, Gaines, Hill, Lara, Leyva,  
            McGuire, Wolk
           NO VOTE RECORDED:  Hertzberg, Pavley

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 5/27/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           SUBJECT:   Energy:  conservation:  financial assistance


          SOURCE:    Author


          DIGEST:  This bill extends by ten years the sunset on Energy  
          Conservation Assistance Account (ECAA) program.

          ANALYSIS:  Existing law establishes the ECAA loan program to  
          fund energy efficiency improvements at facilities used by local  
          governments.  Sunsets the program as of January 1, 2018, and  
          requires that unexpended funds in ECAA as of January 1, 2018,  
          and thereafter revert to the General Fund.  (Public Resources  
          Code § 25410 et seq)

          This bill extends the sunset date on the ECAA program from  
          January 1, 2018, to January 1, 2028.
          
          Background








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          ECAA program loans to local governments for energy efficiency.   
          The ECAA program, which sunsets in 2018, was established more  
          than 30 years ago by the Energy Conservation Assistance Act of  
          1979.  It is one of the oldest of California's many programs  
          designed to reduce statewide energy consumption through energy  
          efficiency measures.  The program makes low-interest loans to  
          cover up to 100 percent of a project with a maximum repayment  
          term of 15 years.  A loan repayment amount cannot exceed the  
          estimated energy savings from a funded project.  

          A variety of sources have funded ECAA over the years, including  
          the General Fund and tax-exempt revenue bonds.  In 2009, the  
          American Recovery and Reinvestment Act (ARRA) provided $25  
          million to California Energy Commission (CEC) for ECAA loans to  
          supplement about $34 million in ARRA funds that the CEC awarded  
          to 279 small cities and counties for energy efficiency projects.  
           SB 679 (Pavley, Chapter 597, Statutes of 2011) appropriated an  
          additional $25 million to CEC for ECAA loans that originated as  
          ratepayer funds deposited into the Renewable Resource Trust Fund  
          (RRTF). The $25 million was part of $50 million transferred by  
          SB 77 (Pavley, Chapter 15, Statutes of 2010) from the RRTF to  
          the California Alternative Energy and Advanced Transportation  
          Financing Authority within the State Treasurer's Office for a  
          Property Assessed Clean Energy (PACE) loan program that has  
          since been put on hold for residential energy efficiency loans.   
          More recently, Proposition 39 - the Clean Energy Jobs Act  
          program - has provided funding to the ECAA program for  
          zero-percent-interest loans for public schools.  

          According to the CEC, since 1979 the CEC has lent more than $383  
          million to various local agencies throughout the state to fund  
          energy efficiency improvements.  Those loans have gone to more  
          than 840 recipients, as follows, based on total loan amounts:   
          about 58 percent to local governments, 23 percent to K-12 public  
          schools, 10 percent to public colleges, 7 percent to public care  
          facilities and hospitals, and 2 percent to special districts.

          ECAA has received five legislative extensions since its  
          enactment in 1979. The most recent sunset extension was SB 1268  
          (Pavley, Chapter 615, Statutes of 2012).
          The CEC reports that, despite this long record of lending, the  
          ECAA program has never experienced a default on loan repayment.








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          Prior/Related Legislation
          
          SB 1268 (Pavley, Chapter 615, Statutes of 2012) extended the  
          ECAA program sunset from January 2013 to January 2018.


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

          According to the Senate Appropriations Committee, the extension  
          of the sunset to 2028 will result in the following fiscal  
          impacts: 

           Up to $2.8 million will flow back to ECAA, rather than to the  
            General Fund absent the extension. 
           The continuation of approximately $1.7 million annually (ECAA)  
            for administration costs, plus bond administrative costs of  
            approximately $75,000 annually.    


          SUPPORT:   (Verified5/27/16)


          School Energy Coalition


          OPPOSITION:   (Verified5/27/16)


          None received


          ARGUMENTS IN SUPPORT:     According to the author, this bill  
          will extend ECAA until January 1, 2028, thereby ensuring that  
          these beneficial programs can continue to help California meet  
          its energy usage goals and save taxpayer funds.



          Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
          5/28/16 17:15:12


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