BILL ANALYSIS Ó ----------------------------------------------------------------- | | | SENATE COMMITTEE ON NATURAL RESOURCES AND WATER | | Senator Fran Pavley, Chair | | 2011-2012 Regular Session | | | ----------------------------------------------------------------- BILL NO: AB 1422 HEARING DATE: July 2, 2012 AUTHOR: Perea URGENCY: Yes VERSION: June 28, 2012 CONSULTANT: Dennis O'Connor DUAL REFERRAL: No FISCAL: Yes SUBJECT: 2012 Water Bond BACKGROUND AND EXISTING LAW 1.SBX7 2 (Cogdill) was part of the water package passed in the 2009/10 7th Extraordinary Session. That bill proposed to place before the voters in November 2010, the Safe, Clean, and Reliable Drinking Water Supply Act of 2010, which would authorize $11.14 billion in general obligation bonds to fund various water resources programs and project. The funding is as follows: $455 M 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 M Total SBX7 2 also specified the label, title, and summary to be included in the ballot pamphlet. 2.Provisions of the proposed water bond were amended twice in 2010: AB 153 (Hernandez) - amended the provisions governing allowable uses of funds for the San Gabriel Valley groundwater clean-up program. AB 1265 (Caballero) - delayed the placement of the water bond before voters to the November 6, 2012 general 1 election, changed the title of the bond to the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, and made conforming changes throughout the measure. The bill also amended the provisions governing JPA participation in surface storage projects. Both bills also included provisions regarding how the Secretary of State was to incorporate the amendments made by those bills into the measure placed before the voters. 1.In January 2011, the Court of Appeal of the State of California, in Jarvis v Bowen, wrote: "The question posed is whether, in enacting the 'Safe, Reliable, High-Speed Passenger Train Bond Act for the 21st Century' to submit the measure to voters as Proposition 1A at the November 4, 2008 general election, the Legislature acted lawfully when it specified the ballot label, title and summary to be used and precluded the Attorney General from revising the language other than to include a financial impact statement. The answer is 'No.'" "Simply stated, the Legislature cannot dictate the ballot label, title and official summary for a statewide measure ?" 2.Article IV, Section 8, Subdivision (c), Paragraph (3) of the California Constitution states, "Statutes calling elections, statutes providing for tax levies or appropriations for the usual current expenses of the State, and urgency statutes shall go into effect immediately upon their enactment." PROPOSED LAW This bill would: Amend the chaptered versions of SBX7 2 (Cogdill), AB 153 (Hernandez), and AB 1265 (Caballero) to delay the water bond to the November 4, 2014 ballot. Delete the provisions specifying the label, title, and summary to be included in the ballot pamphlet. State that the bill calls an election within the meaning of Article IV of the Constitution and shall go into immediate effect. State that the bill is an urgency statute necessary, the facts constituting the necessity being: "In order to ensure that the Safe, Clean, and Reliable Drinking Water Supply Act of 2012 is submitted to the voters at the November 4, 2014, statewide general election, it is necessary that this act take effect immediately." ARGUMENTS IN SUPPORT According to a coalition of water and business interests, 2 "Although voters do agree that investments in water infrastructure and environmental restoration enhancements are needed, 2012 is not the year to pass a water bond. This is in part because of the current state of the economy. The key is to pass a simple bill to delay the bond to 2014. ARGUMENTS IN OPPOSITION None Received COMMENTS Delaying The Day Of Reckoning. It seems inevitable that some changes to the water bond will ultimately need to be made (see next comment), and reaching the necessary two-thirds vote threshold to make substantive changes to the bond will likely be a challenge. When the water bond was first authorized in 2010, press was full of reports of one group or another asserting that the bond included too much pork, was tilted too much towards environmental programs, included too much money for traditional water projects, included too many carve outs, or was simply too large. Those debates are likely to reemerge and new issues may similarly arise. It remains to be seen whether the next legislature will determine that additional amendments to the bond will be necessary or desirable to address some issue or another. However, by simply delaying the bond, this bill virtually guarantees that the next legislature will have to revisit all those issues. Some Changes Will Be Necessary. While the bill proposes to move the water bond to the 2014 ballot, it does not change any of the dates within the bond itself. It seems quite likely that at least some of the dates will need to be changed, though it is not clear if all of them do. A few of the more noteworthy dates are: 1.Title. It would be awkward at best to have the Safe, Clean, and Reliable Drinking Water Supply Act of 2012 on the November 2014 ballot. 2.Promulgating Regulations. Chapter 8, in §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. 3.Early Allocations. Chapter 8, in §79745, prohibits the Water Commission from allocating funds provided by that chapter 3 before December 15, 2012, unless specific requirements have been met. These requirements include promulgating regulations (see 2. above). 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. 4.Staged Release of Funds. The fiscal provisions of SBX7 2, in §79824, prohibit the Treasurer from selling more than half of the bonds authorized by SBX7 2 before July 1, 2015. Belt and Suspenders? This bill both explicitly calls for an election (simple majority, takes effect immediately) and is an urgency measure (2/3 vote, takes effect immediately). It is not clear why it is not simply one or the other. SUGGESTED AMENDMENTS: None SUPPORT Association of California Water Agencies Audubon California Calaveras County Water District California Alliance for Jobs California Conference of Carpenters California Association of Sanitation Agencies California Chamber of Commerce California Building Industry Association California Farm Bureau Federation California Municipal Utilities Association California Water Association Calleguas Municipal Water District Castaic Lake Water Agency CH2M HILL Cucamonga Valley Water District Dublin San Ramon Services District Eastern Municipal Water District Glendale Water and Power Kern County Water Agency Imperial Irrigation District Inland Empire Utilities Agency Latino Water Coalition Los Angeles Department of Water and Power Friant Water Authority Kern County Water Agency Imperial Irrigation District 4 Las Virgenes Municipal Water District Metropolitan Water District of Southern California Mojave Water Agency Municipal Water District of Orange County Northern California Water Association Orange County Water District San Diego County Water Authority San Francisco Public Utilities Commission San Gabriel Basin Water Quality Authority Santa Clara Valley Water District Sonoma County Water Agency The Nature Conservancy Three Valleys Municipal Water District United Water Conservation District Upper San Gabriel Valley Municipal Water District WateReuse California Western Growers Association Western Municipal Water District Westlands Water District OPPOSITION None Received 5