BILL ANALYSIS Ó
SB 1207
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1207
(Hueso) - As Amended June 15, 2016
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|Policy |Utilities and Commerce |Vote:|15 - 0 |
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| |Natural Resources | |7 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill extends the sunset on the Energy Conservation
Assistance Account (ECAA) program from January 1, 2018 to
January 1, 2028. Additionally, this bill clarifies the
California Energy Commission's (CEC) authority to pledge
SB 1207
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collateral and enter into agreements pledging collateral to
secure the repayment of bonds or other borrowings by the IBank.
FISCAL EFFECT:
1)With the extension of the ECAA sunset, approximately $2.1
million will flow back to the ECAA rather than the GF.
2)Extending the Sunset will continue the CEC's administrative
costs which are about $2.5 million annually (ECAA).
The ECAA revolving fund loan program is self-sustaining. As
loans are repaid, those repayments provide resources to fund
additional eligible projects. If the program is not extended,
new loans would not be issued and interest income would decrease
over time.
COMMENTS:
1)Purpose. According to the author, for over three decades,
ECAA has funded more than 840 loans and has not had a single
default. The author contends this program has allowed local
government, school districts, and hospitals to install new
lighting systems, efficient pumps and motors, automated energy
management system, replace heating and air conditioning, and
much more.
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.
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2)ECAA. The ECAA was created in 1979 and currently provides
low- and no-interest loans to fund energy efficiency measures
in schools, universities, hospitals, public care institutions,
and local government entities. The loan repayment is based on
cost savings as a result of installing efficiency measures.
Initially, the borrower's energy payment does not decrease
because the savings are used to pay back the loan. After the
loan is fully repaid, the borrower entirely benefits from the
savings. To date, the ECAA program has issued over $392
million in loans to 851 applicants.
Funding for ECAA loans has come from a variety of sources over
the years, including the General Fund and tax-exempt revenue
bonds. In 2009, American Recovery and Reinvestment Act (ARRA)
provided $25 million to CEC for ECAA loans and SB 679 (Pavley,
Chapter 597, Statutes of 2011) appropriated an additional $25
million to the program.
ECAA has received five legislative extensions since its
enactment in 1979. The most recent extension was SB 1268
(Pavley, Chapter 615, Statutes of 2012).
3)IBank. The IBank was established in 1994 to finance public
infrastructure and economic development projects in California
communities through various activities including leveraging
existing public programs and funds to attract private sector
investment. The IBank is located within the Governor's Office
of Business and Economic Development (GO-Biz) and is governed
by a five-member Board of Directors.
The IBank established the California Lending for Energy and
Environmental Needs Center (CLEEN Center) in August 2015, to
help the state meet GHG emissions reduction goals by offering
financial assistance for public clean energy projects and
private commercial and industrial building retrofits. The
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CLEEN Center utilizes IBank's access to capital markets for
clean energy and energy efficiency projects through its
Statewide Energy Efficiency Program (SWEEP). This bill
clarifies CEC's authority to pledge collateral to secure the
bonds issued to raise capital for the CLEEN Center.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081