Senate Bill No. 42

Introduced by Senator Wolk

December 11, 2012

An act to repeal and add Division 26.7 (commencing with Section 79700) of the Water Code, and to repeal Section 2 of Chapter 3 of the Seventh Extraordinary Session of the Statutes of 2012, relating to a clean, secure water supply and Delta recovery program, by providing the funds necessary therefor through an election for the issuance and sale of bonds of the State of California and for the handling and disposition of those funds.

LEGISLATIVE COUNSEL’S DIGEST

SB 42, as introduced, Wolk. The California Clean, Secure Water Supply and Delta Recovery Act of 2014.

(1) Existing law creates the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, which, if approved by the voters, would authorize the issuance of bonds in the amount of $11,140,000,000 pursuant to the State General Obligation Bond Law to finance a safe drinking water and water supply reliability program. Existing law provides for the submission of the bond act to the voters at the November 4, 2014, statewide general election.

This bill would repeal these provisions.

(2) Under existing law, various measures have been approved by the voters to provide funds for water supply and protection facilities and programs.

This bill would enact the California Clean, Secure Water Supply and Delta Recovery Act of 2014, which, if adopted by the voters, would authorize the issuance of bonds in an unspecified amount pursuant to the State General Obligation Bond Law to finance a clean, secure water supply and Sacramento-San Joaquin Delta recovery program.

The bill would provide for the submission of the bond act to the voters at the November 4, 2014, statewide general election.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Division 26.7 (commencing with Section 79700)
of the Water Code is repealed.

SEC. 2.  

Division 26.7 (commencing with Section 79700) is
added to the Water Code, to read:

 

Division 26.7.  The California Clean, Secure
Water Supply and Delta Recovery Act of 2014

 

Chapter  1. General Provisions

 

79700.  

This division shall be known and may be cited as the
California Clean, Secure Water Supply and Delta Recovery Act
of 2014.

79702.  

The Legislature finds and declares all of the following:

(a) Clean and secure water supplies are critical to sustaining
California’s communities, strengthening businesses, and preserving
our state’s strong agricultural heritage.

(b) The Delta’s agricultural heritage, water supply infrastructure,
and ecological resources are vital to California’s economy.

(c) Immediate action is necessary to reverse the severe
ecosystem decline of the Delta and to safeguard the communities,
economy, and vital infrastructure of the Delta.

(d) The security of critical state resources within the Delta relies
upon the strength and integrity of the levee system.

(e) Adequate flood protection is essential to protecting
California’s communities.

(f) Frequent drought, polluted groundwater aquifers, aging water
supply infrastructure, rising water treatment costs, inadequate flood
protection, a changing climate, and watershed degradation, among
other challenges, threaten California’s ability to sustain and protect
its communities, its businesses, and its farms.

(g) Improved local, regional, and statewide water resource
management ensures California communities are able to efficiently
respond to drought and climate change.

(h) Funds provided by this division shall not be expended for
the design, construction, operation, or maintenance of Delta
conveyance projects. These costs are the responsibility of the water
agencies that benefit from those facilities.

(i) Ecosystem restoration funds provided by this division shall
not be expended for environmental mitigation measures except as
part of the environmental mitigation costs associated with projects
funded by this division.

79704.  

The proceeds of bonds issued and sold pursuant to this
division shall be deposited in the Clean, Secure Water Supply and
Delta Recovery Program Fund, which is hereby created.

79706.  

As used in this division, the following terms have the
following meanings:

(a) “Committee” means the Finance Committee created pursuant
to Section 79774.

(b) “Fund” means the Clean, Secure Water Supply and Delta
Recovery Program Fund created pursuant to Section 79704.

(c) “Delta” means the Sacramento-San Joaquin Delta.

 

Chapter  2. Delta Security and Recovery

 

79710.  

(a) This chapter provides state funding for public
benefit projects that assist in recovering and safeguarding the
Delta’s resources including agriculture, water quality, water supply,
recreation, fish, and wildlife.

(b) The sum of ____ dollars ($____) shall be available, upon
appropriation by the Legislature, to the Sacramento-San Joaquin
Delta Conservancy for grants and direct expenditures to help ensure
economic sustainability, Delta levee integrity, water quality
improvements, local water supply reliability, protection of critical
infrastructure, and terrestrial and aquatic ecosystem restoration
within the Delta and the Suisun Marsh.

(c) For purposes of implementing this chapter, the
Sacramento-San Joaquin Delta Conservancy shall take into
consideration the economic sustainability plan developed by the
Delta Protection Commission pursuant to Section 29759 of the
Public Resources Code and the Delta Plan developed by the Delta
Stewardship Council pursuant to Section 85300.

 

Chapter  3. Regional Water Supply Security

 

79720.  

The sum of ____ dollars ($____) shall be available,
upon appropriation by the Legislature, for projects that help achieve
local and regional water management objectives, including, but
not limited to, improved drinking water supplies, water quality,
water treatment, municipal and agricultural water efficiency,
reduced reliance on the Delta, climate change resiliency, and
watershed ecosystem stewardship. Projects shall implement
adopted integrated regional water management plans in accordance
with Part 2.2 (commencing with Section 10530) of Division 6.

79722.  

From the funds described in Section 79720, at least
____ dollars ($____) shall be available for water recycling and
advanced treatment technology projects that improve regional
water quality or regional water supply.

79724.  

From the funds described in Section 79720, at least
____ dollars ($____) shall be available for groundwater
management projects that prevent or reduce the contamination of
groundwater that serves as a source of drinking water.

 

Chapter  4. Clean Drinking Water

 

79730.  

The sum of ____ dollars ($____) shall be available,
upon appropriation by the Legislature, for projects that help ensure
access to clean, safe, and affordable drinking water for California’s
communities. Eligible expenditures include, but are not limited
to, projects that address the critical and immediate needs of
disadvantaged, rural, or small communities and projects that
leverage state and federal drinking water quality and wastewater
treatment funds.

 

Chapter  5. Protection of Rivers, Lakes, and Watersheds

 

79740.  

The sum of ____ dollars ($____) shall be available,
upon appropriation by the Legislature, to the Wildlife Conservation
Board for projects that protect and restore natural hydrologic and
ecological systems in watersheds that serve as sources of drinking
water.

79742.  

Prior to the expenditure of funds appropriated pursuant
to Section 79740, the Wildlife Conservation Board, in coordination
with state conservancies and the Natural Resources Agency, shall
develop an expenditure plan to guide the expenditure of funds.
The expenditure plan shall recognize and address regional and
statewide watershed protection and restoration priorities. Projects
funded by this chapter shall be selected through a competitive
process.

 

Chapter  6. Statewide Water Supply Improvements

 

79750.  

The sum of ____ dollars ($____) shall be available,
upon appropriation by the Legislature, for public benefits
associated with water storage and delivery projects that advance
adopted state water policies. Priority shall be given to the
construction, rehabilitation, or expansion of facilities that enable
reduced reliance on Delta exports during ecologically sensitive
periods, as well as projects that reoperate existing facilities to
maximize water supply or ecosystem benefits. Public benefits
eligible for funding under this section are limited to ecosystem
restoration, water quality improvements, and flood protection.
Projects funded by this chapter shall be selected through a
competitive process.

 

Chapter  7. Flood Protection

 

79760.  

The sum of ____ dollars ($____) shall be available,
upon appropriation by the Legislature, to the Department of Water
Resources for projects that support integrated flood management
in the Sacramento and San Joaquin Valleys, in accordance with
the Central Valley Flood Protection Plan described in Section
9612.

 

Chapter  8. Fiscal Provisions

 

79770.  

Bonds in the total amount of ____ dollars ($____), or
so much thereof as is necessary, not including the amount of any
refunding bonds, or so much thereof as is necessary, may be issued
and sold to provide a fund to be used for carrying out the purposes
expressed in this division and to reimburse the General Obligation
Bond Expense Revolving Fund pursuant to Section 16724.5 of the
Government Code. The bonds, when sold, shall be and constitute
a valid and binding obligation of the State of California, and the
full faith and credit of the State of California is hereby pledged
for the punctual payment of both principal of, and interest on, the
bonds as the principal and interest become due and payable.

79772.  

The bonds authorized by this chapter shall be prepared,
executed, issued, sold, paid, and redeemed as provided in the State
General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code), and all of the provisions of that law apply to the bonds and
to this division and are hereby incorporated in this division as
though set forth in full in this division, except Section 16727 of
the Government Code shall not apply to the extent that it is
inconsistent with any other provision of this division.

79774.  

(a) Solely for the purpose of authorizing the issuance
and sale pursuant to the State General Obligation Bond Law
(Chapter 4 (commencing with Section 16720) of Part 3 of Division
4 of Title 2 of the Government Code) of the bonds authorized by
this division, the California Clean, Secure Water Supply and Delta
Recovery Finance Committee is hereby created. For purposes of
this division, the California Clean, Secure Water Supply and Delta
Recovery Finance Committee is “the committee” as that term is
used in the State General Obligation Bond Law. The committee
consists of the Director of Finance, the Treasurer, the Controller,
the Director of Water Resources, and the Secretary of the Natural
Resources Agency, or their designated representatives. The
Treasurer shall serve as chairperson of the committee. A majority
of the committee may act for the committee.

(b) For purposes of the State General Obligation Bond Law, the
Department of Water Resources is designated the “board.”

79776.  

The committee shall determine whether or not it is
necessary or desirable to issue bonds authorized pursuant to this
division in order to carry out the actions specified in this division
and, if so, the amount of bonds to be issued and sold. Successive
issues of bonds may be authorized and sold to carry out those
actions progressively, and it is not necessary that all of the bonds
authorized to be issued be sold at any one time.

79778.  

There shall be collected each year and in the same
manner and at the same time as other state revenue is collected,
in addition to the ordinary revenues of the state, a sum in an amount
required to pay the principal of, and interest on, the bonds each
year. It is the duty of all officers charged by law with any duty in
regard to the collection of the revenue to do and perform each and
every act that is necessary to collect that additional sum.

79780.  

Notwithstanding Section 13340 of the Government
Code, there is hereby appropriated from the General Fund in the
State Treasury, for the purposes of this division, an amount that
will equal the total of the following:

(a) The sum annually necessary to pay the principal of, and
interest on, bonds issued and sold pursuant to this division, as the
principal and interest become due and payable.

(b) The sum necessary to carry out Section 79782, appropriated
without regard to fiscal years.

79782.  

For the purposes of carrying out this division, the
Director of Finance may authorize the withdrawal from the General
Fund of an amount not to exceed the amount of the unsold bonds
that have been authorized by the committee to be sold for the
purpose of carrying out this division. Any amounts withdrawn
shall be deposited in the fund. Any money made available under
this section shall be returned to the General Fund from proceeds
received from the sale of bonds for the purpose of carrying out
this division.

79784.  

All money deposited in the fund that is derived from
premium and accrued interest on bonds sold shall be reserved in
the fund and shall be available for transfer to the General Fund as
a credit to expenditures for bond interest.

79786.  

Pursuant to Chapter 4 (commencing with Section
16720) of Part 3 of Division 4 of Title 2 of the Government Code,
the cost of bond issuance shall be paid out of the bond proceeds.
These costs shall be shared proportionally by each program funded
through this bond act.

79788.  

The Department of Water Resources may request the
Pooled Money Investment Board to make a loan from the Pooled
Money Investment Account, including other authorized forms of
interim financing that include, but are not limited to, commercial
paper, in accordance with Section 16312 of the Government Code,
for purposes of carrying out this division. The amount of the
request shall not exceed the amount of the unsold bonds that the
committee, by resolution, has authorized to be sold for the purpose
of carrying out this division. The Department of Water Resources
shall execute any documents required by the Pooled Money
Investment Board to obtain and repay the loan. Any amounts
loaned shall be deposited in the fund to be allocated by the board
in accordance with this division.

79790.  

The bonds may be refunded in accordance with Article
6 (commencing with Section 16780) of Chapter 4 of Part 3 of
Division 4 of Title 2 of the Government Code, which is a part of
the State General Obligation Bond Law. Approval by the voters
of the state for the issuance of the bonds described in this division
includes the approval of the issuance of any bonds issued to refund
any bonds originally issued under this division or any previously
issued refunding bonds.

79792.  

Notwithstanding any other provision of this division,
or of the State General Obligation Bond Law, if the Treasurer sells
bonds pursuant to this division that include a bond counsel opinion
to the effect that the interest on the bonds is excluded from gross
income for federal tax purposes, subject to designated conditions,
the Treasurer may maintain separate accounts for the investment
of bond proceeds and for the investment of earnings on those
proceeds. The Treasurer may use or direct the use of those proceeds
or earnings to pay any rebate, penalty, or other payment required
under federal law or take any other action with respect to the
investment and use of those bond proceeds required or desirable
under federal law to maintain the tax exempt status of those bonds
and to obtain any other advantage under federal law on behalf of
the funds of this state.

79794.  

The Legislature hereby finds and declares that,
inasmuch as the proceeds from the sale of bonds authorized by
this division are not “proceeds of taxes” as that term is used in
Article XIII B of the California Constitution, the disbursement of
these proceeds is not subject to the limitations imposed by that
article.

SEC. 3.  

Section 2 of Chapter 3 of the Seventh Extraordinary
Session of the Statutes of 2009, as amended by Section 1 of
Chapter 74 of the Statutes of 2012, is repealed.

SEC. 4.  

Section 2 of this act shall be submitted to the voters
at the November 4, 2014, statewide general election in accordance
with provisions of the Government Code and the Elections Code
governing the submission of a statewide measure to the voters.

SEC. 5.  

Section 2 of this act shall take effect upon the approval
by the voters of the California Clean, Secure Water Supply and
Delta Recovery Act of 2014, as set forth in that section at the
November 4, 2014, statewide general election.