BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1265| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1265 Author: Caballero (D), et al Amended: 8/5/10 in Senate Vote: 27 - Urgency SENATE NATURAL RES. & WATER COMMITTEE : 8-1, 8/9/10 AYES: Pavley, Cogdill, Hollingsworth, Huff, Kehoe, Lowenthal, Padilla, Simitian NOES: Wolk SENATE FLOOR : 27-7, 8/9/10 AYES: Aanestad, Alquist, Ashburn, Cedillo, Cogdill, Correa, Denham, Ducheny, Dutton, Emmerson, Florez, Harman, Hollingsworth, Huff, Kehoe, Liu, Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Romero, Simitian, Steinberg, Strickland, Wright, Wyland NOES: Corbett, DeSaulnier, Hancock, Leno, Runner, Wolk, Yee NO VOTE RECORDED: Calderon, Oropeza, Walters, Wiggins, Vacancy, Vacancy ASSEMBLY FLOOR : 54-22, 8/9/10 - See last page for vote SUBJECT : Safe, Clean, and Reliable Drinking Water Supply Act of 2012: surface storage projects: submission to voters SOURCE : Author CONTINUED AB 1265 Page 2 DIGEST : This bill amends SB 2 X7 (Cogdill), Chapter 3, Statutes of 2009-10, Seventh Extraordinary Session, to delay the placement of the measure before voters to the November 6, 2012 general election, and makes conforming changes throughout the measure. ANALYSIS : Existing Law 1. A part of the water package passed in the 2009-10 Seventh Extraordinary Session was SB 2 X7. The bill enacted the Safe, Clean, and Reliable Drinking Water Supply Act of 2010, which, if approved by the voters in November 2010, authorizes $11.14 billion in general obligation bonds to fund various water resources programs and project. The funding (in millions) by chapter is as follows: $455 Chapter 5.Drought Relief $1,050 Chapter 6.Water Supply Reliability $2,250 Chapter 7.Delta Sustainability $3,000 Chapter 8.Statewide Water System Operational Improvement $1,785 Chapter 9.Conservation And Watershed Protection $1,000 Chapter 10.Groundwater Protection And Water Quality $1,250 Chapter 11.Water Recycling Program $11,140 Total 2. Chapter 8 would continuously appropriate $3.0 billion to the California Water Commission for surface and groundwater storage projects. Chapter 8 specified, among other things, that funds allocated for construction of surface storage projects identified in the CALFED Bay-Delta Record of Decision may be provided for those purposes to local joint powers authorities formed by irrigation districts and other local water districts and local governments within the applicable hydrologic region to design, acquire, and construct those projects. 3. Chapter 8 further specifies that the joint powers CONTINUED AB 1265 Page 3 authorities (JPA) could 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. Also, the Department of Water Resources (DWR) would be an ex-officio member of each joint powers authority subject to this section, but DWR would be prohibited from controlling the governance, management, or operation of the surface water storage projects. 4. Chapter 8 further requires that the California Water Commission, by December 15, 2012, develop and adopt regulations establishing methods for quantifying and managing public benefits associated with the water storage projects. 5. Chapter 8 prohibits the Water Commission from allocating funds provided by that chapter before by December 15, 2012, unless specific requirements have been met. These include: A. The Water Commission has adopted the regulations described above in #4. B. The Water Commission has quantified and made public the cost of the public benefits associated with the project. C. DWR has entered into contracts that ensure the project sponsor(s) will pay its share of the total costs of the project. D. DWR has entered into contracts with the appropriate public agency(s) to ensure that the public contribution of funds pursuant to this chapter achieves the public benefits identified for the project. E. Feasibility studies have been completed. F. All environmental documentation associated with the project has been completed, and all other federal, state, and local approvals, certifications, CONTINUED AB 1265 Page 4 and agreements required to be completed have been obtained. These provisions do not apply to grants for completing environmental documentation and permitting of a project. 6. Chapter 8 further prohibits the Water Commission from allocating funds provided by that chapter unless, by January 1, 2018, all of the following conditions are met: A. All feasibility studies are complete and draft environmental documentation is available for public review. B. The Water Commission makes a finding that the project is feasible, and will advance the long-term objectives of restoring ecological health and improving water management for beneficial uses of the Delta. C. The Director of DWR receives commitments for not less than 75 percent of the nonpublic benefit cost share of the project. This bill: 1. Amends SB 2 X7 to delay the placement of the measure before voters to the November 6, 2012 general election, and make conforming changes throughout the measure. 2. Changes the language in Chapter 8 governing the JPA, to clarify that the JPA could not include 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. 3. Deletes an incorrect reference to the elections code in the provisions of SB 2 X7 governing placing the measure on the ballot. Background Area of Origin Provisions . The general provisions of SB 2 CONTINUED AB 1265 Page 5 X7 establish, in Section 79713(b), that for purposes of this bond measure, an area outside of the Sacramento River hydrologic region or the Delta that receives water exported from the Sacramento River hydrologic region shall not be deemed to be immediately adjacent to or capable of being conveniently supplied with water therefrom if that water is delivered via facilities constructed for that purpose after January 1, 2010. Promulgating Regulations . Chapter 8, in Section 79744, requires that the Water Commission, by December 15, 2012, develop and adopt regulations establishing methods for quantifying and managing public benefits associated with the water storage projects. That requirement does not become operative until ratified by the voters. If the voters approve the bond in the November 2012 general election, the Water Commission would have at most a matter of days to develop and adopt such regulations, regulations that often take years to develop and adopt. Early Allocations . Chapter 8, in Section 79745, prohibits the Water Commission from allocating funds provided by that chapter before by December 15, 2012, unless specific requirements have been met. These requirements include promulgating regulations. After that date, the more general requirements that must be met by January 1, 2018 are the only restrictions on the Water Commission's ability to allocate the funds continuously appropriated to them through Chapter 8. If the voters approve the bond in the November 2012 general election, the restrictions on early allocations would be in place for at most a matter of days. Completed Storage Requirements . Chapter 8, in Section 79747, prohibits the Water Commission from allocating funds provided by that chapter unless, by January 1, 2018, specific requirements have been met. If the voters approve the bond in the November 2012 general election, sponsors of storage projects would have six years to meet all the necessary requirements. It is not clear whether or not it is necessary or desirable to delay the CONTINUED AB 1265 Page 6 final completion date two years to 2020. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/9/10) Association of California Water Agencies California Building Industry Association California Chamber of Commerce California Farm Bureau Federation California Municipal Utilities Association Dublin San Ramon Services District Eastern Municipal Water District Friant Water Authority Helix Water District Kern County Water Agency San Diego County Water Authority WateReuse California Western Municipal Water District ARGUMENTS IN SUPPORT : A coalition of supporters (see list above) writes the following: "While the decision to seek a delay is a difficult one, it should not affect the momentum surrounding implementation of the 2009 Delta legislative package. The successful implementation of the 2009 Delta legislative package, including a bond to provide appropriate public financing, is of paramount importance to the future of California. We continue to support the package and its implementation moving forward. "We recognize that this decision was very difficult to make. However, given the current economic climate and the need to focus on the state's dire budget shortfall, we recognize that the decision is intended to maximize chances of success for the water package over the next decade." ASSEMBLY FLOOR : AYES: Adams, Arambula, Bass, Beall, Tom Berryhill, Blakeslee, Block, Blumenfield, Bradford, Brownley, CONTINUED AB 1265 Page 7 Caballero, Carter, Conway, Cook, Coto, Davis, De La Torre, De Leon, Eng, Feuer, Fletcher, Fuentes, Fuller, Furutani, Galgiani, Garrick, Gatto, Gilmore, Hagman, Hall, Harkey, Hernandez, Jeffries, Lieu, Bonnie Lowenthal, Ma, Mendoza, Miller, Nava, Nestande, Nielsen, V. Manuel Perez, Portantino, Ruskin, Salas, Silva, Smyth, Solorio, Audra Strickland, Swanson, Torres, Torrico, Villines, John A. Perez NOES: Ammiano, Anderson, Bill Berryhill, Buchanan, Chesbro, DeVore, Evans, Fong, Gaines, Hayashi, Hill, Huber, Huffman, Knight, Logue, Monning, Niello, Norby, Saldana, Skinner, Torlakson, Yamada NO VOTE RECORDED: Charles Calderon, Jones, Tran, Vacancy CTW:mw 8/10/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED