BILL ANALYSIS                                                                                                                                                                                                    

                                                                AB 1265
                                                                Page  1

        AB 1265 (Caballero)
        As Amended  August 5, 2010
        2/3 vote.  Urgency
        |ASSEMBLY: |     |(June 2, 2009)  |SENATE: |27-7 |(August 9, 2010)     |
             (vote not relevant)

        |COMMITTEE VOTE:  |10-3 |(August 9, 2010)    |RECOMMENDATION: |concur    |
        |                 |     |                    |                |          |

        Original Committee Reference:    REV. & TAX.
         SUMMARY  :  Changes submission to the voters of the Safe, Clean, and  
        Reliable Drinking Water Supply Act (Water Bond) from November 2010  
        to November 2012 and prohibits a joint powers authority that  
        receives public funding under the Water Bond for a surface water  
        storage project from including for-profit entities among its  

         The Senate amendments  delete the Assembly version of the bill, and  

        1)Change submission of the Water Bond from the November 2, 2010  
          statewide election to the November 6, 2012 statewide election and  
          makes conforming changes throughout the Water Bond to reflect the  
          2012 date.

        2)Add language prohibiting a joint powers authority which receives  
          public funds under the Water Bond to design, acquire, and  
          construct a surface water storage project from including in its  
          membership any for-profit corporation or any mutual water company  
          whose shareholders and members include a for-profit corporation  
          or any other private entity.

        3)Declare that this bill shall take effect immediately as an  
          urgency statute, in order to enable the Secretary of State to  
          make the changes required by this act at the earliest possible  
          date, and to ensure that the Water Bond is submitted to the  


                                                                AB 1265
                                                                Page  2

          voters at the November 6, 2012, statewide general election, it is  
          necessary that this act take effect immediately.

         EXISTING LAW  :

        1)Creates a nine-member California Water Commission (CWC) within  
          the Department of Water Resources (DWR) with each member  
          appointed by the Governor, subject to confirmation by the Senate,  
          and serving four-year staggered terms.

        2)Enacts the Water Bond which, if approved by the voters in  
          November 2010, authorizes $11.14 billion in general obligation  
          bonds to fund various water resources programs and projects.  The  
          funding by chapter is as follows:

          $   455 M           Chapter 5Drought Relief
          $1,050    Chapter 6 Water Supply Reliability
          $2,250    Chapter 7 Delta Sustainability
          $3,000    Chapter 8 Statewide Water System Operational  
          $1,785    Chapter 9 Conservation and Watershed Protection
          $1,000    Chapter 10Groundwater Protection and Water Quality
           $1,250     Chapter 11Water Recycling Program
          $11,140 M Total

        3)Authorizes the CWC, under Chapter 8 of the Water Bond to fund  
          what it determines are the public benefits of water storage  
          projects selected by the CWC and which improve the Sacramento-San  
          Joaquin Delta (Delta) ecosystem or tributaries to the Delta.
        4)Authorizes, under Chapter 8 of the Water Bond, local joint powers  
          authorities (JPAs) formed by irrigation districts and other local  
          water districts and local governments within the applicable  
          hydrologic region to:

           a)   Be eligible for funds to design, acquire, and construct  
             surface storage projects; and, 

           b)   Include in their membership governmental and  
             nongovernmental partners that are not located within their  
             respective hydrologic regions in financing the surface storage  
             projects, including, as appropriate, cost share participation  
             or equity participation.

        5)Makes the DWR an ex-officio member of JPAs subject to this  


                                                                AB 1265
                                                                Page  3

          section, but prohibits DWR from controlling the governance,  
          management, or operation of the surface water storage projects.

         AS PASSED BY THE ASSEMBLY  , this bill specified that until January  
        1, 2012, a qualified itinerant vendor is a consumer, and not a  
        retailer, of tangible personal property owned and sold by the  
        vendor, with specified exceptions, so that the retail sale subject  
        to tax is the sale of tangible personal property to the qualified  
        itinerant vendor.

         FISCAL EFFECT  :  Unknown

         COMMENTS  :  On October 11, 2009, Governor Schwarzenegger issued a  
        proclamation convening the Legislature to meet in extraordinary  
        session to take up issues related to protecting and restoring the  
        Delta ecosystem and improving water reliability and management,  
        including addressing water conveyance, storage, and conservation  
        and considering a general obligation bond.  

        SB 2 X7 (Cogdill), Chapter 3, Statutes of the 2009-10 Seventh  
        Extraordinary Session, passed in November 2009, formed part of the  
        historic five-bill package adopted in that session and called for  
        the Water Bond to be placed on the November 2010 ballot.  If  
        approved by the voters, it would authorize the issuance of bonds in  
        the amount of $11.14 billion for a wide range of projects and  
        purposes including water conservation and efficiency, groundwater  
        protection and cleanup, integrated regional water management,  
        ecosystem and watershed protection and restoration, water  
        recycling, and water storage.  With respect to water storage  
        projects, SB 2X7 continuously appropriates $3 billion to the CWC to  
        fund the public benefits of those projects after determining the  
        amount of public benefits provided by each proposed project  
        pursuant to criteria set forth in that bill.  Those criteria  
        broadly define public benefits to include: ecosystem improvements  
        that benefit native fish and wildlife; water quality improvements;  
        flood control benefits; emergency response; and recreational  

        On May 14, 2010, Governor Schwarzenegger announced nine new  
        appointments to the CWC, a body which was previously dormant during  
        his administration.  Since that time, Governor Schwarzenegger  
        announced he would seek to delay the Water Bond until the 2012  

        As amended in the Senate, this bill would delay the Water Bond,  


                                                                AB 1265
                                                                Page  4

        placing it on the 2012 ballot instead of the 2010 ballot, and add  
        language prohibiting joint powers authorities which receive public  
        funds allocated by the CWC under the Water Bond to design, acquire,  
        and construct surface water storage projects from including in  
        their membership any for-profit corporation or any mutual water  
        company whose shareholders and members include a for-profit  
        corporation or any other private entity.  Related legislation, AB  
        1260 (Fuller), would extend the terms of the current CWC members  
        appointed by the Governor to May 14, 2014 if confirmed by the  

        This bill was substantially amended in the Senate and the  
        Assembly-approved provisions of this bill were deleted.  The  
        subject matter of this bill was not heard in an Assembly policy  
        committee this legislative session.  

         Analysis Prepared by  :    Tina Cannon Leahy and Diane Colborn / W.,  
        P. & W. / (916) 319-2096  

                                                                FN: 0005784