BILL ANALYSIS
Appropriations Committee Fiscal Summary
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| |82(Murray) |
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|Hearing Date: 8/20/01 |Amended: 7/17/01 |
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|Consultant: Lisa Matocq |Policy Vote: E, U & C 10-0 |
| | G. O. |
| |12-0 |
| | |
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BILL SUMMARY: SB 82xx expands the scope of a loan/loan
guarantee program, administered by the Trade and Commerce
Agency (TCA) through financial development corporations, by
including solar energy systems, and makes related changes.
Fiscal Impact (in thousands)
Major Provisions 2001-02 2002-03
2003-04 Fund
Solar energy loans Unknown, potentially significant
Special*
CEC Minor, absorbable costs
General
TCA administration Probably $100 annually
General
*Small Business Expansion Fund
STAFF COMMENTS: This bill meets the criteria for referral
to the Suspense File. The TCA administers a $120 million
loan guarantee program, using the Small Business Expansion
Fund, through eight financial development corporations
(FDCs) located throughout the state. Businesses may obtain
loan guarantees for a variety of projects, including energy
efficiency improvements. Although current law provides
that the FDCs may grant energy efficiency improvement loans
, another statute restricts the use of expansion funds to
loan guarantees , unless the direct lending is for a
qualifying farming purpose. The minimum guarantee amount
is $ 25,000 and the maximum varies by FDC from $350,000 to
$500,000. This bill, among other things:
specifies that solar energy systems are an authorized
improvement for which FDCs may grant loans ,
specifies that for solar energy systems, the minimum loan
amount is $8,000 and the maximum is $1 million,
requires the California Energy Commission (CEC), in
cooperation with the California Office of Small Business
Development, to develop criteria and procedures for
administering solar energy systems loans,
requires the Department of General Services (DGS) to
ensure that solar energy equipment is installed, by
January 1, 2007, on all state buildings and parking
facilities, where feasible. "Feasible" means, among
other things, that space and adequate funding is
available,
requires solar energy equipment to be installed in all
new state buildings and parking facilities where
construction begins on or after December 31, 2002.
There is another statutorily created program, administered
by the nonprofit State Assistance Fund for Enterprise,
Business and Industrial Development Corporation, that
provides low-interest energy efficiency improvement
(including solar energy systems) loans to small businesses.
The program received a one-time appropriation of $2.75
million in 1987 and maintains a revolving fund. There is
no minimum loan amount; the maximum is $350,000. The
program sunsets on January 1, 2002, however, AB 84xx
(Strom-Martin), pending in the Assembly, seeks to extend
the sunset to January 1, 2011.
STAFF RECOMMENDS that the bill be amended to (1) clarify
which program it intends to expand, given that the TCA
program is for loan guarantees only, or to remove the
restriction(s) on the use of the expansion funds, and (2)
clarify whether the "if feasible" language also applies to
the provision requiring solar energy equipment to be
installed in all new state buildings and parking
facilities.
SB 17xx (Brulte), pending in the Assembly Revenue and
Taxation Committee, provides a tax credit for the
installation of large solar electric systems. SB 1085
(Bowen), pending in the Assembly Appropriations Committee,
requires new state buildings to exceed energy efficiency
standards and be constructed using environmentally friendly
building methods.
SB 5x (Sher, Ch. 7, St. of 2001) appropriated $40 million
to DGS for energy projects that reduce consumption in state
buildings. AB 29x (Kehoe, Ch. 8, St. of 2001) appropriated
$40 million to TCA for a renewable energy loan guarantee
program. AB 29x also requires DGS to inventory public
buildings to identify ways to reduce energy consumption and
generate electricity onsite where feasible. Apparently,
DGS does install solar energy systems in state buildings
where feasible.