BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chairman
� x1 1 (Steinberg)
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Hearing Date: �2/23/2011 Amended: �2/22/2011
Consultant: �Franzoia, Bob Policy Vote: Energy 8-3 �
Education 7-3�
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BILL SUMMARY:� SBx1 1 would require the Controller to annually �
allocate $8 million from the Energy Resources Programs Account, �
upon appropriation by the Legislature, to the Department of �
Education (department) for expenditure in the form of grants to �
school districts for creating and maintaining partnership �
academies. In addition, this bill would:
- Require a grantee to implement or maintain a partnership �
academy that focuses on employment in clean technology �
businesses and renewable energy businesses and provides skilled �
workforces for the products and services for energy or water �
conservation, renewable energy, pollution reduction or other �
technologies.
- Require the California Energy Commission (commission) to �
develop guidelines, which may be adopted as emergency �
regulations, to ensure that programs receiving grants reflect �
current state policies and priorities as well as provide skills �
and education linked to the needs of relevant industries.
- Authorize a school district to apply for planning grants for �
implementing a partnership academy and would allow the �
department to pay administrative costs.
- Require the department to report to the Legislature that �
includes a description of the curriculum and substance of the �
programs funded by grants awarded.
- State that it addresses the fiscal emergency declared and �
reaffirmed by the Governor by proclamation issued on January 20, �
2011.
The provisions of this bill would become inoperative on June 30, �
2017.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
� Expansion of partnership
academy program
- Grants $7,600 $7,600 $7,600 General*
- Admin Up to $400 Up to $400 Up to $400General*
- costs through 2016-17 -
- CEC guidelines and Up to $400 Up to $400 Up to �
$400 General*
consultation - costs through 2016-17 -
* Energy Resources Programs Account; counts toward meeting the �
Proposition 98 minimum funding guarantee.
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STAFF COMMENTS: This bill meets the criteria for referral to the �
Suspense File.
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This bill would enact the Clean Technology and Renewable Energy �
Job Training, Career Technical Education and Dropout Prevention �
Program. School districts may use the grant funds to establish �
a new partnership academy or to maintain an existing
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SBx1 1 (Steinberg)
academy, if the academy focuses on specified criteria. The �
current partnership academy program enrolls students in grades �
10 to 12. This bill would require academy programs to enroll �
students beginning in the 9th grade. (Currently, some academy �
programs use local funds to enroll 9th grade students.)
Partnership academies were first established in statute in 1984. �
School districts operate academies that serve as a school �
within a school for the purposes of integrating academic and �
career technical education for "at risk" students, as specified, �
though up to one half of the students may be student who do not �
meet the "at risk" criteria. Academies provide occupational �
training in 15 industry sectors including electronics, computer �
technology, finance, agribusiness, alternative energy, �
environmental design and construction, graphic arts and �
printing, international business, and space by partnering with a �
business. Students typically will work as an intern in their �
occupational field of concentration after their junior year.
Approximately 460 partnership academies are funded within �
Proposition 98. Some partnership academies are funded from a �
one time appropriation of $12 million from the Public Interest �
Research, Development, and Demonstration Fund. Additional �
academies are funded with a one time appropriation of Quality �
Education Investment Act (QEIA) funds. (QEIA implemented the �
terms of the CTA v. Schwarzenegger settlement and allocated the �
outstanding balance of the Proposition 98 maintenance factor �
that was due, but not provided in 2004-05 and 2005-06.)
In order to receive funding, a school district shall, among �
other things, provide the following:
- An amount equal to a 100 percent match of all funds received �
in the form of direct and in-kind support provided by the school �
district.
- An amount equal to a 100 percent match of all funds received �
in the form of direct and in-kind support provided by �
participating companies or other private sector organizations.
- An assurance that the state funds provided by the partnership �
academies program shall be used only for the development, �
operation, and support of the academies.
School districts may receive no more than $45,000 for the �
initial year, no more than $80,000 in the second year, no more �
than $120,000 in the third year and no more than $150,000 in the �
fourth and following years. This would provide for �
approximately 48 to 50 programs receiving the maximum grant �
amount.
The bill requires a report that includes, but is not limited to, �
a description of the curriculum and substance of the programs �
funded by the grants awarded. The first report shall include �
the identification of gaps in available curricula relating to �
clean technology and renewable energy that are consistent with �
state energy policy and priorities.
This bill requires the commission to adopt specified guidelines �
and provides those guidelines may be adopted as emergency �
regulations. To speed the adoption of
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SBx1 1 (Steinberg)
emergency regulations, if any, staff recommends� striking lines �
29 to 32 on page 6 and inserting the revised language noted �
below:
(4) The adoption of guidelines as emergency regulations pursuant �
to this section shall be deemed an emergency and considered by �
the Office of Administrative Law as
immediately necessary to avoid serious harm to the public peace, �
health, safety, or general welfare for purposes of sections �
11346.1 and 11349.6.
Up to five percent of the funds transferred to the department �
may be expended to pay the costs incurred in the administration �
of the provisions of this bill. This level is consistent with �
the current modest level of administrative expenses incurred by �
the department, which are split between state and federal �
Perkins funds.
Commission workload would consist of adopting guidelines and �
consulting with the department, which would take the lead, in �
reviewing grant applications, conducting ongoing program �
reviews, and issuing a report. At this time, an estimate of �
four personnel annually to administer the commission's workload �
appears to be high.
General Funds and special funds
�The "General Fund" is defined in Section 16300 of the Government �
Code as consisting of money received into the State Treasury and �
not required by law to be credited to any other fund.
However, to the term "General Fund," as that term is used in the �
California Constitution, has generally had a broader meaning �
than the definition contained in Section 16300 of the Government �
Code, being applied to all repositories of General Fund moneys �
that are not true special funds, but rather are funds that �
contain money that would otherwise flow into the General Fund. �
Thus, only if the Legislature is clearly restricted, �
constitutionally or otherwise, as to the purpose for which the �
moneys in any fund may be appropriated, may the fund be deemed a �
true special fund.
As a general proposition, the Legislature cannot authorize the �
diversion of a special fund if the diversion would conflict with �
a provision of the California Constitution controlling the fund, �
would impair the obligation of a contract, or would constitute a �
breach of trust.
Consistent with this meaning of "General Fund," examples of true �
special funds include funds consisting of fee revenues collected �
under regulatory acts enacted pursuant to the state's police �
power, funds created to receive the proceeds of a bond issue �
where the bonds are issued to finance a particular activity or �
function, funds containing moneys held by the state as a trustee �
for the benefit of others, funds consisting of moneys donated by �
local governmental agencies or private individuals for purposes �
specified in the donation, and the Public Employees' Retirement �
Fund.
Thus, unless moneys received by the state fall within a special �
fund category as described above, those revenues would be part �
of the General Fund.
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SBx1 1 (Steinberg)
The account (3360-0465) is funded by a surcharge on electricity �
use of up to three-tenths of a mill ($0.0003) surcharge per �
kilowatt hour. (This account is considered a "mixed" account as �
it contains General Funds and a small amount of special funds in �
the form of permit fees). Funds in the account may be used for �
the program proposed in this bill.
Due to the economic recession, energy use in the state has �
declined, reducing revenues into the account. In the fall of �
2010, the commission raised the surcharge to $0.00029. Based on �
the increased surcharge, the account has a projected fund �
balance of about $10 million at the end of 2011-12. However, �
the commission also projects expenditures to be larger than �
revenues in 2011-12 and thereafter.
This bill specifies legislative intent to appropriate $8 million �
per year through June 30, 2017 (approximately six fiscal years) �
from the account. If both this bill and SB x1 2 (Simitian) �
relating to renewable energy resources, also on today's file, �
are enacted, a reduction in other commission program �
expenditures of up to $9.4 million per year may be necessary to �
keep the account in balance. (As the state's economy recovers, �
revenues into the account should recover, ultimately mitigating �
the need for program reductions.)
The Renewable Resource Trust Fund (Public Resources Code 25751) �
may be used as set forth in Public Resources Code 25740.5 to �
optimize public investment and ensure that the most �
cost-effective and efficient investments in renewable energy �
resources are vigorously pursued with a long-term goal of having �
a fully competitive and self-sustaining supply of electricity �
generated from renewable sources and a near-term goal of �
increasing the quantity of electricity generated by in-state �
renewable electricity generation facilities, while protecting �
system reliability, fostering resource diversity, and obtaining �
the greatest environmental benefits for California residents.
As of September 30, 2010, this fund, and other related �
renewable energy program funds, had a balance of $58,079,206 �
with encumbrances of $48,831,904. (An encumbrance is a �
commitment of all or part of an appropriation for future �
expenditures. Encumbrances are accrued as expenditures by �
departments at year-end and included in expenditure totals in �
individual budget displays.) This fund also has outstanding �
Budget Act loans to the General Fund from 2002, 2008, and 2009 �
totaling $64,100,000 and to the Department of Fish and Game �
totaling $10,000,000. Another loan of $20 million has been �
proposed, with repayment in 2013-14, in response to the �
cancellation of the sale of state buildings. Given that moneys �
in this fund may be used for General Fund purposes and that the �
total balance in this fund is sufficient, at this time, to fund �
the program proposed by this bill, staff recommends� an amendment �
to specify the Renewable Resource Trust Fund be used instead of �
the Energy Resources Programs Account.
The January 20, 2011 proclamation noted in the bill identifies �
"the nature of this fiscal emergency to be the projected budget �
imbalance for Fiscal Year 2010-11, which is causing budgetary �
and cash deficits in Fiscal Year 2011-12."
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SBx1 1 (Steinberg)
This bill is substantially similar to SB 675 (Steinberg) 2010 �
which would have allocated $8 million annually from the account �
to the department for developing and maintaining programs that �
focus on training and employment in clean technology and �
renewable energy industries. The chaptered version was not �
heard by Senate Appropriations. SB 675 was vetoed by Governor �
Schwarzenegger.