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OFFICE OF THE MAYOR Gregory B. Lyman CITY HALL 10890 San Pablo Avenue, El Cerrito, CA 94530 Telephone (510) 215-4305 Fax (510) 215-4379 http://www.el-cerrito.org February 19, 2013 The Honorable Nancy Skinner California State Assembly State Capitol Sacramento, CA 95814 Re: AB 39 (Skinner, Perez) – Upgrading Schools and Creating Clean Energy Jobs Dear Assembly Member Skinner: On behalf of the City of El Cerrito, I am writing to express the Council’s support for Assembly Bill 39 to implement Proposition 39. With the passage of Proposition 39, the voters of California established a path forward for schools and clean energy jobs. For the next five years, Proposition 39 provides up to $550 million annually to the Clean Energy Job Creation Fund. The funds are to be used for projects in schools, universities, and other public buildings. Funds from Proposition 39 allow the State to reduce utility bills at public schools while promoting clean energy jobs that can’t be outsourced. Over the next five years, Proposition 39 could lead to 30,000 California jobs. In California, seventy percent of K-12 public school classrooms are over 25 years old. Combined, schools account for approximately 12 percent of all commercial energy consumption, which costs taxpayers $1.1 billion a year – more than was spent on books and supplies, combined. In an era of budget cuts, the savings from more efficient buildings will give schools flexibility to pay for student learning, rather than utility bills. AB 39 establishes guidelines for clean energy expenditures from the Clean Energy Job Creation Fund, including for K-12 schools, colleges and universities, other public facilities, and workforce training. AB 39 states that the money may be available in the form of grants, low or no-interest loans, or other forms of financial assistance. Sincerely, Gregory B. Lyman Mayor Agenda Item No. 5(C) ---PAGE BREAK--- Upgrading our Schools & Creating CleanEnergy Jobs AB 39 – Skinner, Speaker Pérez Nancy Skinner, AB 39 Contact: (916) 319-2015 1 SUMMARY Proposition 39 provides up to $550 million per year for clean energy programs at schools and other public buildings. However, the initiative contained little direction for how to prioritize projects and implement the act. Assembly Bill 39 establishes guidelines for clean energy expenditures at schools, colleges, other public facilities and for job training. BACKGROUND With the passage of Proposition 39, the voters of California established a path forward for schools and clean energy jobs. For the next 5 years, Prop 39 provides up to $550,000,000 annually to the Clean Energy Job Creation Fund for job creation and clean energy projects in schools, universities, and other public buildings. Funds from Prop 39 will allow the state to reduce utility bills at public schools while promoting clean energy jobs that can’t be outsourced. Over the next five years, Prop 39’s could lead to 30,000 California jobs. In California, 70 percent of K–12 public school classrooms are over 25 years old. Combined, schools account for approximately 12% of all commercial energy consumption, which costs taxpayers $1.1 billion a year – more than was spent on books and supplies, combined. In an era of budget cuts, the savings from more efficient buildings will give schools flexibility to pay for student learning, rather than utility bills. Retrofits at Oakland Unified School District, Murrieta Valley Unified School District and Antelope Valley High School District, saw annual savings of $100,000, $420,000, and $303,000 respectively. EXISTING LAW Proposition 39 closed a tax loophole for multi- state corporations, ensuring that all companies that do business in California are treated equally under the tax code. The initiative requires that, for the next 5 years, half of the expected revenue (up to $550 million annually) be deposited into the Clean Energy Job Creation Fund. THIS BILL AB 39 establishes guidelines for clean energy expenditures from the Clean Energy Job Creation Fund, including for K-12 schools, colleges and universities, other public facilities, and workforce training. AB 39 states that the money may be available in the form of grants, low- or no-interest loans, or other forms of financial assistance. AB 39 ensures that expenditures, for the first year, go toward “shovel-ready” projects to put people to work. For K-12 schools, AB 39 states that funds will be awarded by the CA Energy Commission using existing expertise and resources. In coordination with the Superintendent of Public Instruction, schools will be prioritized based on the age of the school, the proportion of disadvantaged students, whether the facilities have been recently modernized, the potential for demand reduction, and the school’s Energy Star score. AB 39 ensures that the savings from energy retrofits at schools are used to benefit the students at those facilities. Agenda Item No. 5(C) ---PAGE BREAK--- CURRENT BILL STATUS MEASURE : A.B. No. 39 AUTHOR(S) : Skinner and John A. Pérez. TOPIC : Proposition 39: implementation. HOUSE LOCATION : ASM TYPE OF BILL : Active Non-Urgency Appropriations Majority Vote Required Non-State-Mandated Local Program Fiscal Non-Tax Levy LAST HIST. ACT. DATE: 01/14/2013 LAST HIST. ACTION : Referred to Com. on NAT. RES. COMM. LOCATION : ASM NATURAL RESOURCES TITLE : An act to add Division 16.4 (commencing with Section 26225) to the Public Resources Code, relating to energy efficiency, and making an appropriation therefor. Page 1 of 1 AB 39 Assembly Bill - Status 2/12/2013 http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_0001-0050/ab_39_bill_20130117_status... Agenda Item No. 5(C) ---PAGE BREAK--- california legislature—2013–14 regular session ASSEMBLY BILL No. 39 Introduced by Assembly Members Skinner and John A. Pérez December 3, 2012 An act to add Division 16.4 (commencing with Section 26225) to the Public Resources Code, relating to energy efficiency, and making an appropriation therefor. legislative counsel’s digest AB 39, as introduced, Skinner. Proposition 39: implementation. The California Clean Energy Jobs Act, an initiative approved by the voters as Proposition 39 at the November 6, 2012, statewide general election, made changes to corporate income taxes and, except as specified, provides for the transfer of $550,000,000 annually from the General Fund to the Clean Energy Job Creation Fund (Job Creation Fund) for 5 fiscal years beginning with the 2013–14 fiscal year. Moneys in the Job Creation Fund are available, upon appropriation by the Legislature, for purposes of funding eligible projects that create jobs in California improving energy efficiency and expanding clean energy generation. Existing law provides for the allocation of available funds to public school facilities, university and college facilities, other public buildings and facilities, as well as job training and workforce development, and public-private partnerships, for eligible projects, as specified. Existing law establishes prescribed criteria that apply to all expenditures from the Job Creation Fund. Existing law creates the Citizens Oversight Board with specified responsibilities relative to the review of expenditures from the Job Creation Fund, including the submission of an evaluation to the Legislature. 99 Agenda Item No. 5(C) ---PAGE BREAK--- This bill would require the State Energy Resources Conservation and Development Commission (Energy Commission) to administer grants, no-interest loans, or other financial assistance to an eligible institution, defined as a public school providing instruction in kindergarten or grades 1 to 12, inclusive, for the purpose of projects that create jobs in California by reducing energy demand and consumption at eligible institutions. This bill would continuously appropriate for prescribed fiscal years an unspecified amount to the Energy Commission for this purpose in each year that at least that amount of money is transferred to the Job Creation Fund. This bill would require the Energy Commission to administer the grants, no-interest loans, or other financial assistance program to ensure that projects satisfy the prescribed criteria that apply to all expenditures from the Job Creation Fund. This bill would require an eligible institution that receives a grant, no-interest loan, or other financial assistance to report the amount of energy saved to the Energy Commission and to compute the cost of energy saved as a result of implementing projects funded by the grant, as prescribed. This bill would set forth certain criteria to be used to prioritize projects to be funded from moneys in the Job Creation Fund relative to public schools, school districts, public colleges and universities, and other public buildings and facilities. This bill would require moneys for job training and workforce development to be available from the Job Creation Fund, upon appropriation by the Legislature, to the California Conservation Corps, Certified Community Conservation Corps, Youth Build, and other existing workforce development programs, as specified, consistent with the requirements of the California Clean Energy Jobs Act. This bill would require moneys for public-private partnerships to be available from the Job Creation Fund, upon appropriation by the Legislature, for assistance to certain local governments to establish and implement Property Assisted Clean Energy programs or similar financial and technical assistance consistent with the requirements of the California Clean Energy Jobs Act. The bill would require a person or entity receiving financial assistance from the Job Creation Fund to report certain information to the Citizens Oversight Board. The bill would require this information to be included in an annual report by the board to the Legislature. Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no. 99 — 2 — AB 39 ---PAGE BREAK--- The people of the State of California do enact as follows: line 1 SECTION 1. The Legislature finds and declares all of the line 2 following: line 3 With the passage of Proposition 39 at the November 6, 2012, line 4 statewide general election, the people of California declared their line 5 intent to have multistate businesses treated equally under the line 6 Revenue and Taxation Code and to establish a path forward for line 7 schools and clean energy jobs. line 8 Between the 2013–14 and 2017–18 fiscal years, Proposition line 9 39 will dedicate up to $550,000,000 annually to the Clean Energy line 10 Job Creation Fund. line 11 Proposition 39 establishes objectives for clean energy job line 12 creation, including funding energy efficiency projects and line 13 renewable energy installations in public schools, universities, and line 14 other public facilities. line 15 Proposition 39 identifies energy efficiency retrofits and clean line 16 energy installations at public schools as one way to promote line 17 private-sector jobs to save energy and money. line 18 The United States Environmental Protection Agency line 19 estimates that schools waste 30 percent of their energy line 20 unnecessarily through inefficiencies. The financial savings from line 21 more efficient buildings would provide schools with the flexibility line 22 to pay for other upgrades and programs that enhance student line 23 learning. line 24 In California, more than 70 percent of the state’s kindergarten line 25 and grades 1 to 12, inclusive, public school classrooms are over line 26 25 years old and schools account for approximately 12 percent of line 27 all commercial energy consumption. This represents a significant line 28 cost to public schools and to California taxpayers. line 29 With the passage of Proposition 39, the state will be able to line 30 reduce energy demand at public schools and provide long-term line 31 savings and budgetary flexibility so schools can concentrate their line 32 limited resources on education and not utility bills. line 33 Proposition 39 also establishes a Citizens Oversight Board line 34 to review expenditures, audit the Clean Energy Job Creation Fund, line 35 and maintain accountability of the fund. line 36 It is the intent of the Legislature to establish guidelines for line 37 clean energy expenditures from the Clean Energy Job Creation line 38 Fund. 99 AB 39 — 3 — ---PAGE BREAK--- line 1 It is further the intent of the Legislature, during the 2013–14 line 2 fiscal year, to ensure that expenditures from the Clean Energy Job line 3 Creation Fund go toward “shovel-ready” clean energy projects line 4 with guidelines for future expenditures to be developed thereafter. line 5 SEC. 2. Division 16.4 (commencing with Section 26225) is line 6 added to the Public Resources Code, to read: line 7 line 8 DIVISION 16.4. PROPOSITION 39 IMPLEMENTATION: line 9 UPGRADING OUR SCHOOLS AND CREATING CLEAN line 10 ENERGY JOBS line 11 line 12 26225. For purposes of this division, the following terms have line 13 the following meanings: line 14 “Commission” means the State Energy Resources line 15 Conservation and Development Commission. line 16 “Eligible institution” means a public school or school district line 17 providing instruction in kindergarten or grades 1 to 12, inclusive. line 18 “Job Creation Fund” means the Clean Energy Job Creation line 19 Fund established in Section 26205. line 20 “Public buildings” has the same meaning as in subdivision line 21 of Section 4217.11 of the Government Code. line 22 26230. The commission shall administer grants, no-interest line 23 loans, or other financial assistance to eligible institutions for the line 24 purpose of projects that create jobs in California by reducing energy line 25 demand and consumption at eligible institutions in accordance line 26 with this section. line 27 Notwithstanding Section 13340 of the Government Code, line 28 for the purposes of this section, dollars is line 29 continuously appropriated for fiscal years 2013–14 through line 30 2017–18, inclusive, from the Job Creation Fund to the commission line 31 in each year that money in at least that amount is transferred to line 32 the Job Creation Fund pursuant to Section 26205. line 33 To implement this section, the commission shall do all of line 34 the following: line 35 Administer the grants, no-interest loans, or other financial line 36 assistance to ensure that projects satisfy the criteria in Section line 37 26206. line 38 Utilize existing resources, programs, and expertise to the line 39 extent possible. 99 — 4 — AB 39 ---PAGE BREAK--- line 1 Establish a system to prioritize eligible institutions for grants, line 2 no-interest loans, and other financial assistance through this section line 3 in consultation with the Superintendent of Public Instruction. line 4 Prioritization shall take into consideration circumstances that shall line 5 include, but not be limited to, the following: line 6 The age of the school facilities. line 7 The proportion of students receiving free and reduced-price line 8 meals. line 9 Whether the facilities have been recently modernized. line 10 Whether the facilities are operated as a year-round school. line 11 The potential for demand reduction. line 12 The school’s score from an energy rating system such as line 13 the United States Environmental Protection Agency’s Energy Star line 14 system. line 15 Any eligible institution may submit an application to line 16 the commission for a grant, no-interest loan, or other financial line 17 assistance. The commission shall award moneys pursuant to this line 18 section only to eligible institutions. line 19 Each year, in accordance with a schedule established by the line 20 commission, an eligible institution that receives a grant, no-interest line 21 loan, or other financial assistance pursuant to this section shall line 22 report the amount of energy saved to the commission and compute line 23 the cost of energy saved as a result of implementing energy line 24 efficiency retrofit and clean energy installation projects funded by line 25 this section. The cost shall be calculated in a manner established line 26 by the commission. line 27 The commission shall ensure that adequate energy audit, line 28 measurement, and verification procedures are employed to ensure line 29 that energy savings and greenhouse gas emissions reductions occur line 30 as a result of any grants, no-interest loans, or other financial line 31 assistance provided pursuant to this section. line 32 The commission shall use a net present value analysis or life line 33 cycle cost analysis when determining eligible measures for energy line 34 savings. line 35 This section shall not affect the eligibility of any eligible line 36 entity awarded a grant, no-interest loan, or other financial assistance line 37 pursuant to this section to receive other incentives available from line 38 federal, state, and local government, or from public utilities or line 39 other sources, or to leverage the grant from this section with any line 40 other incentive. 99 AB 39 — 5 — ---PAGE BREAK--- line 1 It is the intent of the Legislature that monetary savings at line 2 eligible institutions from retrofit and installation projects pursuant line 3 to this section be used to benefit students and learning at those line 4 institutions. line 5 26235. Moneys for eligible colleges and universities, and line 6 other public buildings and facilities shall be available from the Job line 7 Creation Fund, upon appropriation by the Legislature, for projects line 8 that meet the requirements of Division 16.3 (commencing with line 9 Section 26200). Eligible projects are projects that create jobs in line 10 California by improving energy efficiency, installing clean energy line 11 technologies, or making other energy system improvements. line 12 Eligible facilities shall be prioritized based on the line 13 requirements of Section 26206 and all of the following criteria: line 14 The potential for job creation within California. line 15 The potential for energy demand reduction. line 16 The extent to which the project is coordinated with the line 17 commission or the Public Utilities Commission, or both, to achieve line 18 the maximum amount of job creation within California and energy line 19 benefits from available funds. line 20 26240. Moneys for job training and workforce development line 21 shall be available from the Job Creation Fund, upon appropriation line 22 by the Legislature, to the California Conservation Corps, Certified line 23 Community Conservation Corps, Youth Build, and other existing line 24 workforce development programs to train and employ line 25 disadvantaged youth, veterans, and others on energy efficiency line 26 and clean energy projects, consistent with the requirements of line 27 Division 16.3 (commencing with Section 26200). line 28 26245. Moneys for public-private partnerships shall be line 29 available from the Job Creation Fund, upon appropriation by the line 30 Legislature, for assistance in establishing and implementing line 31 Property Assisted Clean Energy (PACE) programs or similar line 32 financial and technical assistance for cost-effective retrofits and line 33 installations that include repayment requirements, consistent with line 34 the requirements of Division 16.3 (commencing with Section line 35 26200). line 36 26250. No later than one year after a person or entity line 37 receives a grant, loan, or other assistance from the Job Creation line 38 Fund, the person or entity shall submit a report to the Citizens line 39 Oversight Board created pursuant to Chapter 3 (commencing with 99 — 6 — AB 39 ---PAGE BREAK--- line 1 Section 26210) of Division 16.3 containing the following line 2 information, to the extent applicable: line 3 The number of jobs created. line 4 The amount of energy saved. line 5 The amount of new clean energy generation installed. line 6 The number of trainees. line 7 The portion of financial assistance provided that was used line 8 for administrative costs. line 9 The amount of time between awarding of the financial line 10 assistance and the completion of the project or training activities. line 11 The Citizens Oversight Board shall report the information line 12 it receives pursuant to subdivision to the Legislature as part of line 13 its responsibilities pursuant to subdivision of Section 26210. line 14 The board’s report shall be submitted annually. The report shall line 15 also be posted on a publically accessible Internet Web site. line 16 26255. Funding for clean energy, energy efficiency, or job line 17 creation programs from sources other than the Job Creation Fund line 18 shall not be reduced or eliminated as a result of the availability of line 19 moneys from the fund. O 99 AB 39 — 7 —