Bill Summary for Bill Number HB09-1312

Date: 04/16/2009

Final
BILL SUMMARY for HB09-1312

SENATE COMMITTEE ON EDUCATION

Votes: View-->	Action Taken:
Moved amendment L.013 (Attachment A). The motion Moved an amendment adding a two-year accountabilit Moved an amendment allowing charter schools to rec Refer House Bill 09-1312, as amended, to the Commi	Pass Without Objection Pass Without Objection Pass Without Objection PASS

01:35 PM -- House Bill 09-1312

Senator Schwartz, co-prime sponsor of House Bill 09-1312, presented her bill to the committee. The bill creates the Renewable Energy and Energy Efficiency for Schools Loan Program in the Governor's Energy Office. Senator Schwartz explained the need for the bill, discussing energy costs that are faced by schools and school districts. Senator Schwartz explained how the loan program would be administered.

01:39 PM

Senator Romer, co-prime sponsor of the bill, talked about the role of the State Treasurer in the loan program.

01:41 PM

The bill sponsors responded to questions from the committee. Senator Hudak asked for information about how the loan program would be funded, asking for reassurance that the program would not damage the Public School Fund (Permanent Fund) in any way. Senator Hudak also asked about up-front costs related to purchasing energy saving equipment. Senator Romer responded to Senator Hudak's questions, talking about the performance of the Permanent Fund in the current economic climate. He said the bill fits the use of the Permanent Fund by benefitting schools through teaching them to lower their energy bills. Senator Schwartz responded to the questions as well, providing information about the funding of the "Building Excellent Schools Today" (BEST) program, which uses Permanent Fund moneys as well. She explained that the loan program would involve a rigorous financial analysis. Conversation on these issues ensued.

01:48 PM

Committee questions for the bill sponsors continued, with a question from Senator Scheffel about how the loan program in the bill compares with what is available in the private sector. Senator Romer responded, saying the credit crunch is impacting the availability of funds and that this program is a legitimate use of state dollars. Conversation between Senator Scheffel and Senator Romer continued, with Senator Scheffel remarking that many local banks would be happy to have this business. Senator Scheffel suggested a sunset date. Senator Schwartz responded to Senator Scheffel's comments as well, saying there will be a residual opportunity for banks as the program will not meet all schools' needs.

01:54 PM

Senator King asked if the bill is the first time a loan program has been established using Permanent Fund moneys. Senator Schwartz said the program reflects a priority of allowing schools to function in a more efficient manner. Senator Romer said there have been other loan programs using Permanent Fund moneys, but those programs have not been used. He talked about the difficulty in getting energy efficiency loans from banks. Senator King next asked about the fee language in the bill. Senator Schwartz responded. Senator King asked about the bill's requirements and whether the bill would allow charter schools or small school districts to participate. Senator Schwartz responded, saying small districts can put teams together with local utilities to work on renewable energy issues. Senator Romer commented that including BOCES or the State Charter School Institute might make the bill more user-friendly.

02:03 PM

Senator Heath asked about the amount of moneys that would be available under the loan program.

02:06 PM

The following persons testified:

02:06 PM -- Mary Wickersham, representing the Office of the State Treasurer, testified in support of the bill. She spoke to earlier committee questions, including Senator King's question about inclusion of charter schools. She said that the language of the State Constitution limits it to loans to school districts, but noted that there is nothing prohibiting the district from giving money to a charter school. She responded to Senator Hudak's questions about the bill's impact on the Permanent Fund. Ms. Wickersham talked about constitutional requirements around investment losses, discussing the provisions of the State Constitution. Conversation between Senator Hudak and Ms. Wickersham ensued.

02:14 PM

Ms. Wickersham continued, answering Senator King's earlier question about fees under the bill. She said there is no expectation at the current time that a fee will have to be assessed. She responded to a question from Senator Scheffel about whether the loans would be offered below market value. Conversation between Senator Scheffel and Ms. Wickersham on this issue ensued. She responded to additional questions from Senator Hudak about the benefits of the bill.

02:21 PM

Senator Heath talked about how the Boulder Valley School District might use funds provided under the program. Ms. Wickersham talked about the State Treasurer's care of the Permanent Fund. Senator Scheffel asked about how much would be lent under the program, asking specifically about the $2 million identified in the fiscal note. Ms. Wickersham responded, explaining that the fiscal note is based on an estimate of the loans that might be made. Senator Hudak asked if a cap on the amount of loans would be considered. Senator Romer responded as did Ms. Wickersham.

02:28 PM

Senator Schwartz spoke to Senator Hudak's questions as well. Senator Romer asked whether the bill precludes the State Treasurer from working with a bank. Ms. Wickersham said there are no such restrictions in the bill. Senator Spence talked about the relationship between banks and school districts in small- and medium-sized communities and asked whether the bill would affect that relationship. Ms. Wickersham responded to these comments. Senator Romer and Senator Schwartz spoke to the issues raised by Senator Spence as well.

02:38 PM -- Tim Guiterman, representing the Governor's Energy Office, testified in support of the bill. He explained how the program would work and responded to questions from the committee.

02:45 PM -- Jenifer Saltzman, representing the Colorado Bankers Association and the Independent Bankers of Colorado, testified in opposition to the bill. She said her association opposes being in direct competition with the state in making loans. She responded to committee questions, including a question from Senator Scheffel about whether school districts are being denied loans for renewable energy projects. Senator King asked whether banks are in a position to make such loans in the current economic climate. Ms. Saltzman said there is money to lend in the state. Senator Romer commented on the testimony, saying many banks are not willing to lend money for these types of projects.

02:52 PM -- Erik Bowman, representing the Colorado Solar Energy Industries Association (CoSEIA), testified in support of the bill. He talked about job opportunities that would be created by projects funded through the loan program. He spoke to earlier committee questions about whether banks are financing these types of projects. Mr. Bowman talked about the value of energy produced through renewable means, speaking specifically to power purchase agreements and leases.

03:00 PM

Senator Schwartz asked Mr. Bowman to talk about how districts could make money through net-metering. Mr. Bowman responded, talking about energy produced and about how energy savings will more than offset the loan payment amount. Mr. Bowman responded to questions from Senator Hudak about how the loan program will benefit school districts.

03:08 PM -- Deb Kleinman, representing the U.S. Green Building Council - Colorado Chapter, testified in support of the bill. She talked about energy costs faced by schools and about how schools can recoup their costs by using renewable energy. She talked about lessons for students related to the new energy economy and 21st century skills.

03:14 PM -- Benjamin Waters, representing the Rocky Mountain Farmers Union, testified in support of the bill. Mr. Waters said the bill is another tool in the toolbox of the new energy economy and said it presents excellent educational opportunities for students.

03:16 PM -- Scott Groginsky, representing the Colorado Children's Campaign, testified in support of the bill. He responded to committee questions, saying the bill will not damage the Permanent Fund. Senator Spence asked Mr. Groginsky to comment on how the bill impacts school districts' relationships with their communities.

03:19 PM

Senator Schwartz said she has emails from the Colorado Association of School Executives (CASE), the Colorado Education Association (CEA), and the Colorado Association of School Boards (CASB) in support of the bill. She provided closing comments to the bill. Senator Romer made closing comments as well. The committee discussed the testimony of the Colorado Bankers Association.

03:26 PM

Committee discussion of the bill continued, with conversation around interest on the loans. Ms. Wickersham returned to the table to respond to questions about the interest.


BILL:	HB09-1312
TIME:	03:29:01 PM
MOVED:	Romer
MOTION:	Moved amendment L.013 (Attachment A). The motion passed without objection.
SECONDED:
		VOTE
	Groff
	Heath
	Hudak
	King K.
	Scheffel
	Spence
	Romer
	Bacon

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

3:30 PM

Ms. Wickersham returned to the table to speak to an amendment proposed by Senator King to add charter schools to the bill.


BILL:	HB09-1312
TIME:	03:30:24 PM
MOVED:	King K.
MOTION:	Moved an amendment allowing charter schools to receive loans under the bill. The motion passed without objection.
SECONDED:
		VOTE
	Groff
	Heath
	Hudak
	King K.
	Scheffel
	Spence
	Romer
	Bacon

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

3:39 PM

The committee discussed Senator Spence's proposed amendment.

Senator Romer said he would consider adding private schools to the bill. Senator Schwartz said that adding private schools would be unconstitutional as Permanent Fund moneys can be used only for public education purposes.


BILL:	HB09-1312
TIME:	03:39:51 PM
MOVED:	Spence
MOTION:	Moved an amendment adding a two-year accountability clause with a report to the Education Committees. The motion passed without objection.
SECONDED:
		VOTE
	Groff
	Heath
	Hudak
	King K.
	Scheffel
	Spence
	Romer
	Bacon

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1312
TIME:	03:41:30 PM
MOVED:	Romer
MOTION:	Refer House Bill 09-1312, as amended, to the Committee on Appropriations. The motion passed on a 7-1 vote.
SECONDED:
		VOTE
	Groff	Yes
	Heath	Yes
	Hudak	Yes
	King K.	Yes
	Scheffel	No
	Spence	Yes
	Romer	Yes
	Bacon	Yes

Final YES: 7 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS