BILL ANALYSIS
AB 2705
Page 1
Date of Hearing: April 24, 2000
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick D. Wright, Chair
AB 2705 (Committee on Agriculture) - As Amended: April 4, 2000
SUBJECT : Agricultural industry energy program.
SUMMARY : Requires that loan repayments and interest on loans
from the Agricultural Energy Assistance Program (AEAP) be
deposited in the Energy Technologies Research, Development, and
Demonstration Account, and upon appropriation be available for
loans and technical assistance. Additionally, requires that
loans have a replacement period of not more than seven years,
and bear interest at a rate not less than two percent below the
rate earned by moneys in the Pooled Money Investment Account.
EXISTING LAW : Authorizes AEAP, administered by the California
Energy Commission (CEC), to provide technical assistance and
loans to agricultural entities to develop projects that
demonstrate energy efficiency.
FISCAL EFFECT : Unknown.
COMMENTS :
1)SB 1145 [(Mello), Chapter 1341, Statues 1986] created AEAP for
the purpose of providing low interest loans to demonstrate
energy efficient projects by the agricultural industry. The
bill funded the program with a $3 million appropriation from
the Petroleum Violation Escrow Account. While SB 1145
provided for a revolving loan fund to pay for the program, it
did not create such a fund. Payments have been deposited into
the General Fund, and CEC has annually prepared budget change
proposals (BCPs) to return the loan and interest payments back
to AEAP. This bill establishes a mechanism to ensure that
monies repaid pursuant to AEAP are available for the program.
This change eliminates the need for CEC to secure funding for
future loans via the cumbersome BCP process.
1)Since its inception in 1987, AEAP has issued over 110 loans to
fund various energy efficiency projects related to
agriculture, totaling $6.2 million. The average loan is
$55,000. There have been no defaults. Eligible operators
include food and fiber farmers, dairy producers, cattle
AB 2705
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ranchers, food processors, greenhouse activities, and
irrigation districts. Project activities include: on-farm
efficient water pumping plant performance; on-farm irrigation
water conservation; irrigation district water delivery system
efficiencies; field machinery fuel use reduction;
petrochemical pesticide use reduction; fertilizer management;
harvest and post-harvest energy cost savings; food processing
energy and water management; and alternative energy sources.
REGISTERED SUPPORT / OPPOSITION :
Support
California Energy Commission (Sponsor)
Opposition
None on file.
Analysis Prepared by : Joseph Lyons / U. & C. / (916) 319-2083