BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 1121 (de León) - The California Green Bank Board.
Amended: April 29, 2014 Policy Vote: G&F 5-2
Urgency: No Mandate: No
Hearing Date: May 19, 2014 Consultant: Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1121 creates the California Green Bank Board,
which would be charged with evaluating current state financial
support for clean energy projects and identifying firms and
projects that will advance the state's policy objectives.
Fiscal Impact:
Unknown costs, likely approximately $1.2 million, f rom the
General Fund for staffing needs collectively at the board
and by member agencies.
Unknown contract costs, likely between $900,000 and $2.7
million, from the General Fund for contracts.
Background: The State Treasurer's office houses the California
Alternative Energy and Advanced Transportation Financing
Authority (CAEATFA) which provides financing through conduit or
revenue bonds, loan guarantees, loan loss reserves, and sales
and use tax exemptions for specified facilities including those
that use alternative energy sources and technologies.
The California Infrastructure and Economic Development Bank
(I-Bank) supports economic development and public and private
infrastructure investments through bonds, loans, and credit
enhancements.
Proposed Law: This bill would create the California Green Bank
Board (board) which will comprise of the State Treasurer, the
Director of Finance, The President of the California Public
Utilities Commission, The Chair of the California Energy
Commission, The Chair of the State Air Resources Board, an
appointee of the Senate Rules Committee, and an appointee of the
SB 1121 (de Leon)
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Assembly Speaker. Except for the two appointees, members may
designate a deputy to act and represent him or her at all
meetings.
The board would be able to employ staff and contract with
experts in clean energy development and finance.
The board would be responsible for the following:
Evaluating current state financial support for commercially
viable clean energy projects and innovative energy
technology projects that are currently not able to obtain
financing in the capital markets.
Identifying the firms and projects for which new forms of
financial assistance would advance the state's policy
objectives, including a reduction in greenhouse gases.
Recommending forms of financial assistance that will assist
these projects and firms with an acceptable amount of risk
for the state.
The board would be required to make recommendations to the
Legislature based on its responsibilities by January 1, 2016.
Staff Comments: This bill allows the board to employ staff and
to contract with experts. It is unclear how many staff or
contracts the board would need to meet its responsibilities. The
Treasurer's office roughly approximates that the board's likely
staffing and administrative costs would be approximately $1
million if the Treasurer was the chair of the board. Presumably,
with this level of board staffing, the agency members of the
board would need minimal additional staffing of their own to
support their member's participation on the board. Staff
estimates that the agencies would collectively need less than
$200,000 annually for a total cost of $1.2 million.
If the board decided to hire a minimum level of staff, then the
costs would shift to the member agencies. The member agencies
are likely to require approximately one staff each to support
the board's activities. Staff estimates that the total cost
would still be approximately $1.2 million, spread across the
members.
The two appointees would not receive compensation, but would
receive reimbursement for expenses actually incurred in the
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performance of their duties.
This bill also allows the board to contract with experts in
clean energy development and finance. Such contracts could
easily be in the high hundreds of thousands of dollars to the
low millions. As a point of reference, according to the
Treasurer's office, a consulting firm was hired to do an
evaluation of the marketplace and develop recommendations for
the New York Green Bank. The contract for this study, which was
more general than the board's responsibilities in this bill, was
for $910,000. For a more detailed study that identifies specific
firms and projects and their financial needs, the Treasurer's
office estimates contract costs of approximately $2.7 million.