BILL ANALYSIS
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THIRD READING
Bill No: AB 1106
Author: Fuentes (D), et al
Amended: 8/17/10 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE TRANSPORTATION & HOUSING COMMITTEE : 8-1, 8/10/10
AYES: Lowenthal, Huff, DeSaulnier, Harman, Kehoe, Pavley,
Simitian, Wolk
NOES: Ashburn
SENATE APPROPRIATIONS COMMITTEE : 8-2, 8/12/10
AYES: Kehoe, Alquist, Corbett, Emmerson, Leno, Price,
Wolk, Yee
NOES: Ashburn, Walters
NO VOTE RECORDED: Wyland
SUBJECT : AB 118: Alternative and Renewable Fuels and
Vehicle
Technology Program
SOURCE : Author
DIGEST : This bill permits the California Energy
Commission to contract with small business financial
development corporations to expend Alternative and
Renewable Fuels and Vehicle Technology Program funds.
ANALYSIS : AB 118 (Nunez), Chapter 750, Statutes of 2007,
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created the Alternative and Renewable Fuel and Vehicle
Technology Program, which the California Energy Commission
(CEC) administers to provide grants, revolving loans, loan
guarantees, loans, or other appropriate funding measures to
public agencies, vehicle consortia, businesses, consumers,
recreational boaters, and academic institutions to develop
and deploy innovative technologies that transform
California fuel and vehicle types to help attain the
state's climate change policies.
Existing law provides, upon appropriation by the
Legislature, approximately $120 million annually through
2015 for this program comes from additional fees on vehicle
registrations, special identification plates for various
vehicles, and vessel registrations, plus $10 million
annually from the Public Interest Research, Development,
and Demonstration Fund, which is derived from a portion of
electric utility rates.
The CEC, through a competitive process, allocates these
funds to alternative fuel and vehicle technology projects.
To set priorities for the allocation of funds, the CEC must
develop an investment plan in consultation with a wide
array of stakeholders. The CEC adopted its first
investment plan at its
April 22, 2009 meeting. It is now in the process of
updating that plan for 2010, which the CEC plans to adopt
this month.
Existing law makes the following projects eligible for
funding under the Alternative and Renewable Fuel and
Vehicle Technology Program:
Alternative and renewable fuel infrastructure, fueling
stations, and equipment.
Projects to develop and improve vehicle technology that
provide for better fuel efficiency and lower greenhouse
gas emissions.
Alternative and renewable fuel projects to develop,
improve, demonstrate, deploy, produce, and commercialize
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alternative and renewable fuels, plus reduce the overall
carbon footprint of these fuels.
Vehicle retrofit projects to create higher fuel
efficiencies.
Infrastructure projects that promote alternative and
renewable fuel infrastructure development for existing
fleets, public transit, and existing transportation
corridors.
Workforce training programs related to alternative fuels
and vehicle technology.
Block grants administered by not-for-profit technology
consortia for specified purposes.
Analyses and assessments performed by state agencies to
determine the impacts of increasing the use of low-carbon
transportation fuels and technologies.
In addition, AB 109 (Nunez), Chapter 313, Statutes of 2008,
allowed the CEC, until January 1, 2012, to contract with
the State Treasurer to expend Alternative and Renewable
Fuels and Vehicle Technology Program funds through programs
that the State Treasurer implements, provided the program
is consistent with either the Alternative and Renewable
Fuels and Vehicle Technology Program or another AB 118
program, the Air Quality Improvement Program, that the Air
Resources Board administers.
This bill:
1. Allows the CEC to contract with small business financial
development corporations that the Business,
Transportation and Housing Agency (BT&H) establishes to
expend Alternative and Renewable Fuels and Vehicle
Technology Program funds through the Small Business Loan
Guarantee Program provided that the expenditure is
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consistent with all of the requirements of the program
and of AB 118.
2. Deletes obsolete language included in AB 118 and AB 109.
3. Contains double-jointing language with SB 1340 (Kehoe).
Comments
Purpose of the bill . State law authorizes BT&H under its
Small Business Loan Guarantee Program to establish small
business financial development corporations (FDCs) that
provide guarantees for loans private financial institutions
issue to small businesses. These are loans that banks
would not issue without the loan guarantees. Under the
program, loan guarantees cover a percentage, typically 80
percent, of the loan balance and interest upon defaults.
FDCs are nonprofit corporations that BT&H designates to
market the program, coordinate the packaging of the loan
and loan guarantee applications between the small business
and financial institution, issue the loan guarantees, and
ensure that lenders have followed required procedures
before requesting payment on defaulted loans. A total of
11 FDCs operate throughout the state.
Recent state budgets have borrowed or otherwise used for
unrelated purposes moneys in the Small Business Expansion
Fund, which supports the loan guarantees that FDCs make
under the Small Business Loan Guarantee Program. This bill
permits the use of AB 118 funds to restore some of those
lost funds. This bill enables the CEC to contract with the
FDCs to use its AB 118 moneys to fund loan guarantees for
small business borrowing that is consistent with the
Alternative and Renewable Fuels and Vehicle Technology
Program and BT&H's Small Business Loan Guarantee Program.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
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Major Provisions 2010-11 2011-12 2012-13 Fund
BT&H administration up to $50, minor ongoing
special fund costs General*
CEC design program up to $50, ongoing costs are
minor General*
FDC administration costs would depend on amounts
allocated Special*
to FDCs, and could be in the range of
$500
Loan guarantees unknown potential redirection of funds
to Special*
FDCs for loan guarantees that would
other-
wise be used for other projects
* Alternative and Renewable Fuel and Vehicle Technology
Fund
SUPPORT : (Verified 8/19/10)
Association of Financial Development Corporations
JJA:mw 8/19/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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