BILL ANALYSIS                                                                                                                                                                                                    1
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   SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
                  DEBRA BOWEN, CHAIRWOMAN


AB 1663 -  Assembly U&C                           Hearing  
Date:  July 13, 1999                 A
As Amended:         May 6, 1999              FISCAL       B

                                                             
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                         DESCRIPTION
  
  This bill  extends the sunset date on a State Public Works  
Board (SPWB) program which issues revenue bonds to finance  
the cost of cogeneration equipment, alternative energy  
equipment, and conservation measures in public buildings  
until January 1, 2005. 

  This bill  extends the sunset date until January 1, 2011 for  
two California Energy Commission (CEC) grant and loan  
programs for local governments and public institutions to  
finance energy conservation measures, and makes minor  
changes to those programs.  These two programs are known by  
their account names:  the State Energy Conservation  
Assistance account (SECA) funded by the General Fund, and  
the Local Jurisdiction Energy Assistance account (LJEA)  
funded by Petroleum Violation Escrow Account (PVEA) funds.

  This bill  extends the sunset date on the authorization for  
a program which allows state agencies to share benefits  
resulting from energy and water projects with the state  
until January 1, 2005.

                        KEY QUESTIONS  

1.Should the SPWB revenue bond program and the CEC grant  











  and loan programs be extended?

2.Should the 25% local match requirement to obtain a local  
  from the SECA be eliminated?

                          BACKGROUND
  
  When A Sunset Isn't So Beautiful  .  The SPWB is authorized  
to issue up to $50 million annually in revenue bonds to  
finance any cost-effective project that reduces utility  
costs at state-owned facilities.  This program, which is  
run out of the Department of General Services (DGS), has  
financed over $200 million in projects at state agencies,  
community colleges, and California State University and  
University of California campuses.  This program is  
scheduled to sunset at the end of this year.

The SECA and LJEA are similar programs used to finance  
energy efficiency projects by local governments.  These  
programs, which are administered by the CEC, have funded  
over 500 loans worth over $60 million that have resulted in  
savings of approximately $250 million, according to the CEC  
staff.  The SECA program sunsets on January 1, 2001 and the  
LJEA program sunsets one year later.  This bill extends the  
sunset on both programs until January 1, 2011.

This bill also amends the SECA and LJEA programs to extend  
the maximum loan period for SECA loans from 11 years to 15  
years and  eliminates the mandatory 25% local match.

                           COMMENTS

1.Elimination of Local Match Requirement Is Questionable  .   
  It's unclear why the requirement for a 25% local match is  
  being eliminated by this bill.  Traditionally, local  
  match requirements have been used to ensure both  
  interest, buy-in, and commitment from the local community  
  seeking the state grant funds.   The author and the  
  Committee may wish to consider  whether it would be of  
  value to the state to keep the local match requirement in  
  current law.
                               
                       ASSEMBLY VOTES
  










Assembly U & C Committee           (11-0)
Assembly Floor                     (78-1)

                          POSITIONS
  
  Support:
  Department of General Services

  Oppose:
  None reported to Committee.


Randy Chinn 
AB 1663 Analysis
Hearing Date:  July 13, 1999