BILL ANALYSIS
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THIRD READING
Bill No: AB 2705
Author: Assembly Agriculture Committee
Amended: 8/24/00 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 6-0, 6/27/00
AYES: Bowen, Alarcon, Hughes, Kelley, Mountjoy, Solis
SENATE APPROPRIATIONS COMMITTEE : 10-0, 8/14/00
AYES: Johnston, Alpert, Bowen, Burton, Escutia, Karnette,
Kelley, Leslie, Perata, Vasconcellos
ASSEMBLY FLOOR : 79-0, 5/30/00 - See last page for vote
SUBJECT : Agricultural industry energy program
SOURCE : California Energy Commission
DIGEST : This bill requires that loan repayments and
interest from the Agricultural Energy Assistance Program be
deposited in the Energy Technologies Research, Development,
and Demonstration Account and be available for loans and
technical assistance for specified purposes upon
appropriation in the annual Budget Act. This bill places
limitations on the loan repayment period and the loan
interest rate. This bill also repeals an existing State
Department of Food and Agriculture "solar technology in
agriculture" program.
Senate Floor Amendments of 8/24/00 are technical and change
the criteria limiting funding for technical assistance from
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mandatory to permissive. The amendment is intended to
ensure that the California Energy Commission doesn't
interpret the 20 percent limit on allocation of funds for
technical assistance as a 20 percent requirement. (Amended
or not, the amount available for technical assistance under
this bill could be anywhere from zero to 20 percent.
Either way, 20 percent remains the upper limit. This
amendment has no substantive effect.)
ANALYSIS : Current law permits the State Department of
Food and Agriculture (DFA) to operate a Renewable Resource
Energy Agricultural account to develop agriculture-related
energy technology.
Current law authorizes the California Energy Commission
(CEC) to operate the Agricultural Industry Energy
Assistance Program (AIEP).
This bill codifies the CEC program and requires all funds
from loan repayments under the AIEP to be deposited into
the CEC's existing Energy Technologies Research,
Development and Demonstration Account (ETRDDA).
This bill permits money in the account to be available for
loans and technical assistance as prescribed in the
program.
This bill also repeals a "solar technology in agriculture"
program managed by DFA in cooperation with CEC.
Background
The AIEP was created in 1987 and was funded with $3 million
from the Petroleum Violation Escrow Account (PVEA). The
goal of the program was to create a revolving loan fund to
pay for equipment and services for agriculture energy
conservation and development demonstration projects.
The AIEP provides for a repayment period of not more than
seven years at a rate that is not less than two percent
below the rate earned by monies in the Pooled Money
Investment Account (PMIA).
Since its inception, the AIEP has issued over 110 loans in
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the amount of $6.2 million to fund various energy
efficiency projects related to agriculture. According to
CEC, applicants often repay the loans within the seven-year
deadline and the program has had no defaults.
Comments
Codifying the Uncodified . Because thee isn't a fund
account for the AIEP, loan repayments under the loan
program go directly into the PVEA account. The CEC then
has to go through the budget change proposal process each
year to request money from the PVEA in order to have money
to make new loans under the AIEP. By codifying the Energy
Technologies Research, Development and Demonstration
Account, this bill allows AIEP loan repayments to go
directo to the CEC and will allow them to loan money for
new projects without having to get money from the PVEA.
The PMIA Rate . Loans under the AIEP have been issued at a
rate that is not less than two percent below the rate
earned by the PMIA. The PMIA rate for the fiscal year
1998/99 was 5.68 percent, compared to the recent prime rate
of 9.5 percent.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
Redirection of $200,000 annually for six years from the
PVEA to the ETRDDA.
SUPPORT : (Verified 8/18/00)
California Energy Commission (source)
ASSEMBLY FLOOR :
AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn,
Baldwin, Bates, Battin, Baugh, Bock, Brewer, Briggs,
Calderon, Campbell, Cardenas, Cardoza, Cedillo, Corbett,
Correa, Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra,
Firebaugh, Florez, Floyd, Frusetta, Gallegos, Granlund,
Havice, Honda, House, Jackson, Kaloogian, Keeley, Knox,
Kuehl, Leach, Lempert, Leonard, Longville, Lowenthal,
Machado, Maddox, Maldonado, Margett, Mazzoni, McClintock,
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Migden, Nakano, Olberg, Oller, Robert Pacheco, Rod
Pacheco, Papan, Pescetti, Reyes, Romero, Runner, Scott,
Shelley, Steinberg, Strickland, Strom-Martin, Thompson,
Thomson, Torlakson, Villaraigosa, Vincent, Washington,
Wayne, Wesson, Wiggins, Wildman, Wright, Zettel,
Hertzberg
NC:cm 8/26/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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