BILL ANALYSIS Ó
SB 1207
Page 1
SENATE THIRD READING
SB
1207 (Hueso)
As Amended June 15, 2016
2/3 vote
SENATE VOTE: 38-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |15-0 |Gatto, Patterson, | |
| | |Burke, Chávez, Dahle, | |
| | |Eggman, Cristina | |
| | |Garcia, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Hadley, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Ting, | |
| | |Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Natural |7-0 |Williams, Jones, | |
SB 1207
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|Resources | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Hadley, Harper, Mark | |
| | |Stone, Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |15-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Chang, Eggman, | |
| | |Eduardo Garcia, | |
| | |Jones, Obernolte, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood, McCarty | |
| | | | |
| | | | |
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SUMMARY: Extends the sunset on the Energy Conservation
Assistance Account (ECAA) program, and makes other technical and
clarifying changes to the Public Resources Code relating to the
California Energy Commission (CEC) and the California
Infrastructure and Economic Development Bank (IBank).
Specifically, this bill:
1)Extends the sunset date on the ECAA program from January 1,
2018, to January 1, 2028.
2)Clarifies the authority of the CEC to pledge collateral to
secure the repayment of moneys borrowed, or of bonds or other
borrowings, by IBank.
3)Clarifies, in connection with the pledging of loans, or of the
principal and interest payment on loans, the CEC's authority
to enter into pledge agreements setting forth the terms and
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conditions pursuant to which the CEC is pledging loans, or the
principal and interest payment on loans, including the
pledging of loans, or the principal and interest payment on
loans, as collateral to secure the repayment of bonds or other
borrowings by IBank, and may also agree to have the loans held
by bond trustees or by independent collateral or escrow agents
and to direct that payments received on those loans be paid to
those trustee, collateral, or escrow agents.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, with the extension of the ECAA sunset, approximately
$2.1 million will flow back to the ECAA rather than the General
Fund. In addition, extending the Sunset will continue the CEC's
administrative costs which are about $2.5 million annually.
Furthermore, 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)Author's Statement: According to the author, "SB 1207 ensures
low cost financial assistance is available for clean energy
and energy efficiency projects in the State of California.
This bill accomplishes this by: 1) extending the existing
ECAA program, which is an energy efficiency loan program
administered by the CEC, and 2) authorizing the CEC to pledge
its loans to secure the bonds issued by the IBank for its
[California Lending for Energy and Environmental Needs Center]
Center, which finances energy efficiency and clean energy
projects."
2)IBank: The IBank was established in 1994 to finance public
infrastructure and economic development projects in California
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communities. In 2014, IBank established the California
Lending for Energy and Environmental Needs (CLEEN) Center to
focus on energy efficiency projects and retrofits. The CLEEN
Center utilizes IBank's access to capital markets to help
drive energy related projects through the Statewide Energy
Efficiency Program (SWEEP). SWEEP provides financing to State
and local governments, via a combination of a direct loan from
IBank or public market tax-exempt bonds, for approved clean
energy projects.
3)CEC's Energy Conservation Assistance Account: The CEC
operates the ECAA program which provides loans to cities,
counties, public school districts, special districts, public
hospitals and care facilities, and public colleges and
universities at low rates, to reduce statewide energy
consumption through energy efficiency measures. From its
inception in 1979 to March 2016, the ECAA Program has issued
over $392 million in loans to 851 applicants.
The ECAA program is set to sunset on January 1, 2018. This
bill extends the sunset to January 1, 2028.
4)CEC and IBank: The IBank and CLEEN Center do not have a
dedicated source of funding specifically for clean energy
projects. The IBank is currently collaborating with the CEC
to securitize an unleveraged CEC loan program portfolio to
raise funds for the CLEEN Center at the lowest possible cost.
Securitizing the loan will result in $50 to $75 million in new
funding for the CLEEN Center so that it can continue to
finance energy efficiency and clean energy projects. By using
an existing CEC loan portfolio as pledged collateral, the
IBank would be able to secure a higher credit rating on its
bonds to fund CLEEN Center projects. Obtaining a higher
credit rating will result in lower interest rates and cost for
IBank, which would lower the cost of loans for prospective
IBank borrowers, therefore increasing the accessibility for
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more borrowers to obtain financing for energy efficiency
projects through the IBank.
This bill clarifies the CECs authority to pledge collateral to
secure the repayment of moneys borrowed, or of bonds or other
borrowings, by IBank.
Analysis Prepared by:
Edmond Cheung / U. & C. / (916) 319-2083 FN:
0004091