California capitol

California Schools Reap Dollars from Prop 39

California capitolCalifornia schools are gearing up to make energy efficiency improvements with money allocated from Proposition 39, and the onslaught of projects may be a boon to companies involved in energy efficiency retrofits.

Proposition 39 was passed in November 2012 to close a corporate tax loophole that benefited out-of-state corporations. It will generate about $1 billion annually for California with half of the money going to the general fund and half toward measures designed to save energy at schools. The energy efficiency funds will be available for five years.

Earlier this summer, the legislature passed a budget bill to implement Proposition 39. Per the recent budget adopted by Senate Bill 73, roughly $460+million has been allocated for energy projects at K-12 schools and community colleges for fiscal year 2013-14. The deal involves a poverty-weighted allotment of Prop 39 funds to each school district and community college district based on their average daily attendance (ADA) with more money going to schools where more students receive free or reduced-price lunches.

The districts are responsible for submitting applications for energy saving projects based on criteria established by the California Energy Commission and to have those applications approved before receiving funds. School districts may apply for Prop. 39 money in the fall after the California Energy Commission releases its draft application guidelines.

The procedure will require benchmarking, measurement and verification to ensure the projects are actually accomplishing energy savings.

Senator Kevin de León (D-Los Angeles) says the implementation places an emphasis on on-site and labor-intensive retrofits.

Other key features of the implementation include:

  • Accountability – Provides the necessary level of accountability so that the money is not squandered on deferred maintenance but rather on meaningful energy projects that will result in actual savings for schools.
  • Need – Supports school communities that are most in need by weighting the allocations based on participation in the Free and Reduced Lunch program.
  • Oversight – All districts must “apply” for the funds and have applications approved prior to receiving funding.
  • Adequate Reporting – Once projects are complete, districts must report on actual jobs created and energy saved based on measurement standards established by the State.
  • Extending Program Beyond 5-year Sunset – A revolving loan fund will be established each year to provide financing assistance. The repayment of these funds will ensure the program is available in later years for continued investments in energy savings.
  • Deep Retrofits – Requires large school districts to invest at least half of eligible funds towards projects of $250,000 or more.
  • Supports Small Districts – Allows smallest districts to bundle two years of their annual allotment in year one to support greater energy savings projects.
  • Annual Review – Requires an annual legislative review permitting adjustments as needed.
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