BILL ANALYSIS                                                                                                                                                                                                    Ó


          |SENATE RULES COMMITTEE            |                  AB 1292|
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                                 THIRD READING

          Bill No:  AB 1292
          Author:   Roger Hernández (D), et al.
          Amended:  7/12/11 in Senate
          Vote:     21

           SENATE GOVERNANCE & FINANCE COMMITTEE  :  9-0, 7/6/11
          AYES:  Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez, 
            Kehoe, La Malfa, Liu

           SENATE APPROPRIATIONS COMMITTEE  :  9-0, 8/22/11
          AYES:  Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley, 
            Price, Runner, Steinberg

           ASSEMBLY FLOOR  :  78-0, 6/2/11 - See last page for vote

           SUBJECT  :    Safe Drinking Water State Revolving Fund:  
          revenue bonds

           SOURCE  :     California Department of Public Health

           DIGEST  :    This bill authorizes the Department of Public 
          Health to sell revenue bonds to assist drinking water 
          systems in meeting their federal Safe Drinking Water State 
          Revolving Fund matching fund requirements.

           ANALYSIS  :    

           Existing law  : 

          1. Creates the California Infrastructure and Economic 


                                                               AB 1292

             Development Bank (I-Bank) within the Business, 
             Transportation and Housing Agency, to promote economic 
             revitalization, enable future development, and encourage 
             a health climate for jobs in California.  Authorize the 
             I-Bank to issue tax-exempt and taxable revenue bonds to 
             underwrite the costs of infrastructure development that 
             meets certain public purposes. 

          2. Establishes the Safe Drinking Water State Revolving Fund 
             (SDWSRF) and continuously appropriates the funds to the 
             Department of Public Health (DPH) to provide grants or 
             revolving fund loans for the design and construction of 
             projects for the public water systems that will enable 
             suppliers to meet safe drinking water standards.

          3. Authorizes DPH to sell revenue bonds to assist drinking 
             water systems in meeting their federal SDWSRF matching 
             fund requirements. 

          This bill:

           1. Authorizes DPH to contract with the I-Bank to issue 
             taxable or tax-exempt revenue bonds for use as the 20 
             percent state match for federal grant funds.

           2. Authorizes bond proceeds to be deposited into the 
             SDWSRF or to refund bonds previously issued, and to fund 
             necessary reserves, capitalized interest, or issuance 

           3. Requires revenue bonds to be repaid from, and secured 
             by, revenues in the SDWSRF, including loan repayments 
             and interest earned on loans.

           4. Requires biennial DPH reports on SDWSRF activities 
             submitted after January 1, 2013 to include:  (a) results 
             of a federal survey of California's public water 
             infrastructure needs; (b) amount of funds available in 
             the fund to finance those needs; (c) amount of all 
             funding agreements executed since the last report; (d) 
             the fund utilization rate; (e) amount of unliquidated 
             obligations; and (f) the total dollar amount paid to 
             funding recipients since the last report.



                                                               AB 1292

          This bill allows the DPH to partner with the Infrastructure 
          Bank to sell bonds and use the resulting revenues to meet 
          federal match requirements under the SDWSRF program.  
          Federal estimates from 2007 suggest that California has $39 
          billion in unmet water infrastructure needs.  In prior 
          years, DPH used State General Funds and other bond funds to 
          meet the state's match requirements.  This bill enables DPH 
          to partner with the Infrastructure Bank to issue revenue 
          bonds and ensure that California can maximize access to 
          federal funding to meet its drinking water needs without 
          putting additional demands on the State General Fund or 
          other bond funds.

           Related legislation

           AB 696 (Hueso) directs the I-Bank to establish a 
          methodology for determining the economic benefits of 
          projects under consideration and, as of January 1, 2013, 
          restricts the I-Bank to approve only those projects that 
          provide economic benefits and meet land use criteria.  

          AB 700 (Blumenfield) requires the I-Bank to adopt two-year 
          goals and measurable objectives, consistent with state 
          infrastructure, economic development and environmental 
          plans and authorizes the I-Bank to pursue streamlined 
          administrative functions. 

          AB 893 (V. Manuel Pérez) directs the I-Bank to enhance 
          outreach and technical assistance to small and rural 
          communities to obtain financing for infrastructure 

          AB 1094 (John A. Pérez) adds two legislative members to the 
          I-Bank's board of directors.  

          AB 1292 is modeled after AB 1571 (Costa), Chapter 1078, 
          Statutes of2000, authorizes the Infrastructure Bank to 
          issues bonds and deposit proceeds into the State Water 
          Pollution Control Revolving Fund Program in support of 
          local projects under the Clean Water Act.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes   



                                                               AB 1292

          Local:  No

          According to the Senate Appropriations Committee:

                          Fiscal Impact (in thousands)
          Major Provisions                           2011-12       
           2012-13                2013-14               Fund
          Financial services contract         $55        $110       
          $110                       Special*
          Enhanced reporting        absorbable costs to include 
          additional     Special*
                                    information on future biennial 

          * Safe Drinking Water State Revolving Fund, Administration 

           SUPPORT  :   (Verified  8/23/11)

          California Department of Public Health (source)
          Association of California Water Agencies
          California Association of Environmental Health 
          California Association of Professional Scientists
          California Conference of Directors of Environmental Health
          California Water Association
          East Bay Municipal Utility District
          San Gabriel Valley Municipal Water District
          Three Valleys Municipal Water District
          Upper San Gabriel Valley Municipal Water District
          Valley County Water District
          Water Replenishment District of Southern California

           ASSEMBLY FLOOR  : 
          AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill 
            Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Charles Calderon, Campos, 
            Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, 
            Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, 
            Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, 
            Hagman, Halderman, Harkey, Hayashi, Roger Hernández, 



                                                               AB 1292

            Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, 
            Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, 
            Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, 
            Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, 
            Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao, 
            Wagner, Wieckowski, Williams, Yamada, John A. Pérez
          NO VOTE RECORDED: Gorell, Hall

          AGB:do  8/23/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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