BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1207|
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UNFINISHED BUSINESS
Bill No: SB 1207
Author: Hueso (D)
Amended: 6/15/16
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
SENATE FLOOR: 38-0, 5/31/16
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Monning, Moorlach,
Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone, Vidak,
Wieckowski, Wolk
NO VOTE RECORDED: Mitchell, Runner
ASSEMBLY FLOOR: 76-0, 8/18/16 - See last page for vote
SUBJECT: Energy: conservation: financial assistance
SOURCE: Author
DIGEST: This bill (a) extends by ten years the sunset on Energy
Conservation Assistance Account (ECAA) program and (b)
authorizes the California Energy Commission (CEC) to pledge its
loan portfolio to secure the bonds issued by the California
Infrastructure and Economic Development Bank (IBank).
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Page 2
Assembly Amendments authorize the CEC to pledge ECAA loans to
secure the bonds issued by the IBank.
ANALYSIS:
Existing law:
1)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)
2)Establishes the IBank to finance public infrastructure and
economic development that promote "a healthy climate for jobs,
contribute to a strong economy, and improve the quality of
life in California communities." 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.
IBank has broad authority to issue tax-exempt and taxable
revenue bonds, provide financing to public agencies, provide
credit enhancements, acquire or lease facilities, and leverage
state and federal funds.
This bill extends the sunset date on the ECAA program from
January 1, 2018, to January 1, 2028.
Background
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.
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Page 3
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 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. 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 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.
IBank Cleen Center to use CEC collateral to secure funding.
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
"practical and sustainable solutions via leveraged, risk
adjusted, financial assistance" for public clean energy projects
and private commercial and industrial building retrofits.
According to GO-Biz, the CLEEN Center utilizes IBank's access to
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Page 4
capital markets for clean energy and energy efficiency projects
and will help drive energy related projects for state and local
governments in California through the Statewide Energy
Efficiency Program (SWEEP), established within the CLEEN Center,
which provides financing to state and local governments for
approved energy efficiency and clean energy projects, such as
generation, distribution, transmission and storage of electrical
energy, energy conservation measures, environmental mitigation
measures, and water treatment and distribution.
This bill clarifies CEC's authority to pledge collateral to
secure the bonds issued to raise capital for the CLEEN Center.
Related/Prior 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 Assembly Committee on Appropriations:
With the extension of the ECAA sunset, approximately $2.1
million will flow back to the ECAA rather than the GF.
Extending the Sunset will continue the CEC's administrative
costs which are about $2.5 million annually (ECAA).
SUPPORT: (Verified8/19/16)
East Bay Municipal Utility District
School Energy Coalition
OPPOSITION: (Verified8/19/16)
None received
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ARGUMENTS IN SUPPORT: 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 CLEEN Center, which
finances energy efficiency and clean energy projects.
ASSEMBLY FLOOR: 76-0, 8/18/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines,
Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,
Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin,
Jones, Jones-Sawyer, 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
NO VOTE RECORDED: Dababneh, Gallagher, Roger Hernández, Kim
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
8/19/16 19:21:41
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