BILL ANALYSIS Ó
SB 1121
Page 1
Date of Hearing: August 6, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 1121 (De Leon) - As Amended: July 1, 2014
Policy Committee: Natural
ResourcesVote:6-3
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the California Alternative Energy and
Advanced Transportation Financing Authority (CAEATFA), in
consultation with the Air Resources Board (ARB), to develop and
administer a California Climate Technology and Infrastructure
Financing program to finance eligible greenhouse gas (GHG)
emissions reductions programs. Specifically, this bill:
1)Requires CAEATFA to establish guidelines for the program and
project eligibility and prioritization consistent with
existing statutes and specified criteria.
2)Requires CAEATFA to ensure the program maximizes net GHG
emissions and earns a net positive return on investments by
focusing funding on filling financing gaps and barriers to
greater investment or market transformation.
3)Requires CAEATFA to appoint an executive officer to oversee
the program and establishes a specified advisory body
including two members appointed by the Speaker of the Assembly
and two members appointed by the Senate Rules Committee.
4)Requires CAEATFA to prepare a detailed three-year guiding
document for program expenditures.
5)Requires the California Energy Commission (CEC) to submit an
annual report to the Legislature beginning July 30, 2014 on
the progress of the program.
6) Establishes the Climate Technology and Infrastructure Finance
Fund to finance the program through appropriations by the
SB 1121
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Legislature from the GHG Reduction Fund (cap-and-trade
revnues) and other funds including but not limited to revenues
from fees and bonds and other securities issued by CAEFATA and
gifts and grants.
FISCAL EFFECT
1)Increased annual costs for CAEFATA of up to $5 million per
year (special fund) to administer the program.
2)Increased costs to ARB of up to $2 million (Greenhouse Gas
Reduction Fund) for consultation with CAEFATA, supporting the
ARB Chairs participation in the advisory body and the
expansion of existing administrative responsibilities.
3)Increased reporting and staffing costs for CEC of up to
$200,000 (Greenhouse Gas Reduction Fund).
COMMENTS
1)Purpose . According to the author, this bill creates a state
financing institution, sometimes referred to as a Green Bank,
to use a portion of cap-and-trade revenue proceeds to promote
the widespread deployment of low-carbon technologies by
leveraging private investment. The authority, within CAEAFTA
in the Treasurer's office, will enhance existing energy
programs to achieve the state's greenhouse gas reduction goals
set forth in AB 32 and beyond.
2)CAEATFA provides financing for alternative energy facilities
and technologies and advanced transportation projects.
CAEATFA is authorized to issue revenue bonds, provide loans,
loan guarantees and loan loss reserves, and sales and use tax
exemptions. CAEATFA's board consists of the Treasurer,
Controller, Director of Finance, Chair of the CEC, and
President of the Public Utilities Commission. Current law
limits CAEATFA's total debt to $1 billion.
3)Green Banks. The financial assistance program proposed by
this bill is generally referred to as a green bank. Green
banks are publicly funded financing institutions that leverage
limited public sector funds through the use of various
financial mechanisms to attract private investment in
low-carbon clean energy projects. This bill would establish
this type of financial institution in California.
SB 1121
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1)Cap-and-Trade Revenues. As part of the recently passed
2014-15 Budget, SB 862 (Budget and Fiscal Review) allocates
cap-and-trade revenues for the 2014-15 fiscal year and
establishes a long-term plan for the allocation of
cap-and-trade revenues beginning in fiscal year 2015-16.
SB 862 continuously appropriates 35% of cap-and-trade funds
for investments in transit, affordable housing, and
sustainable communities. Twenty-five percent of the revenues
are continuously appropriated to continue the construction of
high-speed rail. The remaining 40% will be appropriated
annually by the Legislature for investments in programs that
include low-carbon transportation, energy efficiency and
renewable energy, and natural resources and waste diversion.
The total amount appropriated under SB 862 is $872 million.
Funding for this bill could be appropriated from the 40% of
cap-and-trade revenues that will be annually appropriated by
the Legislature in subsequent budgets.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081