BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 771
                                                                  Page  1

          Date of Hearing:   August 17, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                     SB 771 (Kehoe) - As Amended:  June 30, 2011 

          Policy Committee:                             Natural 
          ResourcesVote:9-0
                       Utilities and Commerce                 13-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              No

           SUMMARY  

          This bill revises the definition of projects available to 
          receive financial assistance through the California Alternative 
          Energy and Advanced Transportation Financing Authority 
          (CAEATFA).  Specifically, this bill: 

          1)Removes "ultralow-emission equipment" from the definition of 
            renewable energy.

          2)Defines "ultralow-emission energy" as energy generation based 
            on natural gas turbines, landfill gas turbines, digester gas 
            turbines, microturbines, natural gas engines, landfill gas 
            engines, digester gas engines and fuel cells that the 
            authority, in consultation with the Air Resources Board (ARB), 
            determines to meet certain standards.

          3)Adds ultralow-emission energy projects to the types of 
            projects eligible for financial assistance from the authority. 


           FISCAL EFFECT  

          1)Minor, absorbable special fund costs to CAEATFA and ARB. 

          2)Special fund cost pressure of an unknown amount, potentially 
            in the millions of dollars, to fund ultralow-emission energy 
            projects that, absent this bill, would not be eligible for 
            CAEATFA financial assistance.  

           COMMENTS  








                                                                  SB 771
                                                                  Page  2


           1)Rationale  .  The author contends it appropriate to make 
            eligible for CAEATFA financial assistance projects that, while 
            not utilizing or generating renewable energy, reduce 
            greenhouse gas emissions. 

           2)Background.   CAEATFA was created in 1980 to finance projects 
            utilizing alternative sources of energy, such as cogeneration, 
            wind and geothermal power.  In 1994, its duties were expanded 
            to include the financing of "advanced transportation" 
            technologies.  During the energy crisis of 2001, its authority 
            was again expanded to provide financial assistance to public 
            power entities, independent generators, and others for new and 
            renewable energy sources and to develop clean distributed 
            generation.

            CAEATFA's authority had not been utilized recently.  The 
            Treasurer has tried to reinvigorate the authority and has 
            launched a sales and use tax exemption program to stimulate 
            green manufacturing, as authorized by SB 71 (Padilla, Chapter 
            10, Statutes of 2010).

           Analysis Prepared by  :    Jay Dickenson / APPR. / (916) 319-2081