Amended in Senate August 15, 2013

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 begin delete 2012, end delete begin insert 2009, end insert relating to a begin delete clean, secure water supply and Delta recovery end delete begin insert safe drinking water, water quality, and flood protection end insert 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 begin insert , and declaring the urgency thereof, to take effect immediately end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 42, as amended, Wolk. begin delete The California Clean, Secure Water Supply and Delta Recovery Act of 2014. end delete begin insert Safe Drinking Water, Water Quality, and Flood Protection Act of 2014. end insert

(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 begin delete California Clean, Secure Water Supply and Delta Recovery end delete begin insert Safe Drinking Water, Water Quality, and Flood Protection end insert Act of 2014, which, if adopted by the voters, would authorize the issuance of bonds in begin delete an unspecified end delete begin insert the end insert amount begin insert of $5,600,000,000 end insert pursuant to the State General Obligation Bond Law to finance a begin delete clean, secure water supply and Sacramento-San Joaquin Delta recovery end delete begin insert safe drinking water, water quality, and flood protection end insert program.

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

begin insert

(3) This bill would declare that it is to take effect immediately as an urgency statute.

end insert

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.

begin delete

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.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

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

begin insert

 

Division  begin insert 26.7. end insert   The Safe Drinking Water, Water
Quality, and Flood Protection Act of 2014

 

Chapter   begin insert 1. end insert Short Title

 

begin insert 79700. end insert   

This division shall be known and may be cited as the
Safe Drinking Water, Water Quality, and Flood Protection Act of
2014.

 

Chapter   begin insert 2. end insert Definitions

 

begin insert 79710. end insert   

Unless the context otherwise requires, the definitions
set forth in this section govern the construction of this division, as
follows:

(a) “Commission” means the California Water Commission.

(b) “Committee” means the Safe Drinking Water, Water Quality,
and Flood Protection Finance Committee created by Section
79824.

(c) “Delta” means the Sacramento-San Joaquin Delta as defined
in Section 12220.

(d) “Department” means the Department of Water Resources.

(e) “Director” means the Director of Water Resources.

(f) “Disadvantaged community” has the same meaning as set
forth in subdivision (a) of Section 79505.5.

(g) “Fund” means the Safe Drinking Water, Water Quality, and
Flood Protection Fund of 2014 created by Section 79770.

(h) “Integrated regional water management plan” means a
comprehensive plan for a defined geographic area that meets the
requirements of Part 2.2 (commencing with Section 10530) of
Division 6, as that part may be amended.

(i) “Nonprofit organization” means an organization qualified
to do business in California and qualified under Section 501(c)(3)
of Title 26 of the United States Code.

(j) “Public agency” means a state agency or department, public
water system, special district, joint powers authority, city, county,
city and county, or other political subdivision of the state.

(k) “Secretary” means the Secretary of the Natural Resources
Agency.

(l) “State board” means the State Water Resources Control
Board.

(m) “State General Obligation Bond Law” means 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).

 

Chapter   begin insert 3. end insert Safe Drinking Water Projects

 

begin insert 79720. end insert   

(a) It is the intent of the Legislature that this chapter
provide funds to address the most critical water needs of the state,
including the provision of safe drinking water to all Californians
and the improvement of safe drinking water supply reliability.

(b) The sum of one billion five hundred million dollars
($1,500,000,000) shall be available for the purposes of this
chapter.

begin insert 79722. end insert   

From the funds described in Section 79720, five hundred
million dollars ($500,000,000) shall be available to the state board
for projects to address immediate safe drinking water needs as
follows:

(a) The sum of one hundred million dollars ($100,000,000) shall
be available for grants and direct expenditures to finance public
health emergencies and urgent actions to ensure that safe drinking
water supplies are available to all Californians. Eligible projects
include, but are not limited to, the following:

(1) Providing interim water supplies, including, but not limited
to, bottled water, where necessary to protect public health.

(2) Improvements in existing water systems necessary to identify,
plan, design, and construct projects that will provide safe, reliable,
accessible, and affordable drinking water, provide other sources
of safe drinking water, including, but not limited to, replacement
wells, and prevent contamination.

(3) Establishing connections to an adjacent water system.

(4) Design, purchase, installation, and initial operating costs
for water treatment equipment and systems.

(b) The sum of four hundred million dollars ($400,000,000)
shall be available for grants for public water system infrastructure
improvements and related actions to meet safe drinking water
standards and ensure affordable drinking water. Priority shall be
given to projects that serve small disadvantaged communities and
to projects that address chemical and nitrate contaminants and
other health hazards identified by the state board. Eligible
recipients serve disadvantaged communities and are public
agencies or incorporated mutual water companies. The state board
may make grants for the purpose of financing feasibility studies
and to meet the eligibility requirements for a construction grant.
Priority will be given to projects that provide shared solutions for
multiple communities, at least one of which is a disadvantaged
community that lacks safe, affordable drinking water. Construction
grants shall be limited to five million dollars ($5,000,000) per
project, except that the state board may set a limit of not more
than 20 million dollars ($20,000,000) for projects that provide
regional or shared solutions among multiple entities, at least one
of which is a small disadvantaged community. Not more than 25
percent of a grant may be awarded in advance of actual
expenditures.

(c) The state board may expend up to twenty-five million dollars
($25,000,000) of the funds allocated in subdivision (b) for technical
assistance to eligible communities.

(d) At least 10 percent of the funds available pursuant to this
section shall be allocated for projects serving severely
disadvantaged communities.

begin insert 79724. end insert   

(a) From the funds described in Section 79720, one
billion dollars ($1,000,000,000) shall be available to the
department for allocation to regions pursuant to Section 79726
for projects that implement an adopted integrated regional water
management plan consistent with Part 2.2 (commencing with
Section 10530) of Division 6, as that part may be amended, and
improve the quality or supply of safe drinking water, reduce the
amount of water imported to the region, or address any of the
following other critical water supply reliability issues:

(1) Groundwater clean up or pollution prevention in sources
of drinking water.

(2) Advanced water treatment technology projects to remove
contaminants from drinking water, water recycling, and related
projects, such as distribution or groundwater recharge
infrastructure.

(3) Urban and agricultural water conservation and water use
efficiency projects.

(4) Other integrated water infrastructure projects that address
one or more water management activities and improve the
reliability or quality of regional water supplies.

(b) Projects funded pursuant to this section shall require a local
match of not less than 50 percent of project costs, except the
department may suspend or reduce cost share requirements for
projects serving disadvantaged communities or that result in a
direct reduction in water imported from the Delta.

(c) To be eligible for funding under this section, a region shall
comply with the following requirements:

(1) Have an adopted integrated regional water management
plan approved by the department.

(2) Each urban and agricultural water supplier that would
benefit from a project shall adopt and submit an urban or
agricultural water management plan in accordance with the Urban
Water Management Planning Act or the Agricultural Water
Management Planning Act. That urban or agricultural water
management plan shall be approved by the department as meeting
the requirements of Sections 10608.56 and 10631.5.

(3) Have a groundwater management plan for each major
groundwater basin that meets the requirements of Part 2.75
(commencing with Section 10750) of Division 6.

(4) Have a water budget that describes local and imported water
supplies and uses in sufficient detail to inform long-term efforts
towards sustainable water management, and, where applicable,
include a description of any measures anticipated to reduce the
amount of water imported to the region in the future.

(5) Where applicable, an integrated water management plan
shall be consistent with and implement Section 85021.

(d) Where applicable, funding pursuant to this section shall be
made available to water agencies to assist in directly reducing the
amount of water imported from the Delta.

begin insert 79726. end insert   

Funds available pursuant to Section 79724 shall be
allocated to each hydrologic region identified for purposes of
integrated regional water management planning by the department
based 75 percent on population and 25 percent on geographical
size of the region.

begin insert 79728. end insert   

From the funds described in Section 79724, one hundred
million dollars ($100,000,000) shall be available for grants by the
department for the development and implementation of innovative
projects to advance sustainable water management.

 

Chapter   begin insert 4. end insert Water Quality and Watershed Protection
Projects

 

begin insert 79730. end insert   

(a) It is the intent of the Legislature that this chapter
provide funds to protect water quality in the rivers, lakes, streams,
and coastal waters of the state, to assist in meeting the Federal
Water Pollution Control Act (33 U.S.C. Sec. 1251 et seq.) and
other state and federal requirements for the protection of water
quality, public health, and endangered species, and to protect or
restore natural systems that contribute to water supply, water
quality, or flood management.

(b) The sum of one billion eight hundred million dollars
($1,800,000,000) shall be available for the purposes of this
chapter.

begin insert 79732. end insert   

(a) From the funds described in Section 79730, four
hundred million dollars ($400,000,000) shall be available to the
state board for deposit in the Small Communities Grant Subaccount
for grants for wastewater treatment projects to keep contaminants
out of rivers, lakes, streams, groundwater, and coastal waters,
and for other projects to protect the public and fish and wildlife
from contaminated sources of water. Priority shall be given to
projects that serve disadvantaged communities and severely
disadvantaged communities, and to projects that address public
health hazards. Special consideration shall be given to small
communities with limited financial resources. Projects shall
include, but not be limited to, projects that identify, plan, design,
and implement regional mechanisms to consolidate wastewater
systems or provide affordable treatment technologies.

(b) From the funds available pursuant to subdivision (a), ten
million dollars ($10,000,000) shall be allocated to the state board
for deposit into the Private Well and Septic Systems Investment
Fund, which is hereby created in the State Treasury. Moneys in
the fund shall be available, upon appropriation by the Legislature,
for the purpose of addressing the needs of private well and septic
owners.

begin insert 79734. end insert   

From the funds described in Section 79730, nine
hundred million dollars ($900,000,000) shall be available for
water quality and watershed protection projects of statewide
significance as follows:

(a) The sum of six hundred million dollars ($600,000,000) shall
be available to the Delta Conservancy for water quality, ecosystem
restoration, and community sustainability projects that benefit the
Delta, including, but not limited to, the following:

(1) Projects to improve water quality facilities or projects that
contribute to improvements in water quality in the Delta.

(2) Habitat restoration projects to improve the condition of
special status, at risk, endangered, or threatened species in the
Delta and the Delta counties, including projects to eradicate
invasive species, and projects that support the beneficial reuse of
dredged material for habitat restoration and levee improvements.

(3) Projects to assist in preserving economically viable and
sustainable agriculture and other economic activities in the Delta,
including projects to mitigate the economic and community impacts
of any conversion of agricultural land to habitat funded by this
section.

(4) Multibenefit recycled water projects that improve
groundwater management and Delta tributary ecosystems.

(b) The sum of three hundred million dollars ($300,000,000)
shall be available to the Natural Resources Agency, the Wildlife
Conservation Board, or to state conservancies, for water quality,
river, and watershed protection and restoration projects of
statewide importance outside of the Delta. Eligible projects include
those that reduce pollution or contamination of major water bodies
of the state, assist in the protection or recovery of endangered or
threatened species, or protect or restore natural system functions
that contribute to water supply, water quality, or flood
management.

begin insert 79736. end insert   

From the funds described in Section 79730, five hundred
million dollars ($500,000,000) shall be available for regional
watershed protection and water quality projects outside the Delta
pursuant to Section 79738. Eligible projects include those that
reduce pollution or contamination of rivers, lakes, streams, or
coastal waters, including prevention and remediation of mercury
contamination from legacy mines, assist in the protection or
recovery of endangered or threatened species, or protect or restore
natural system functions that contribute to water supply, water
quality, or flood management.

begin insert 79738. end insert   

Funds available pursuant to Section 79736 shall be
allocated to each hydrologic region identified for purposes of
integrated regional water management planning by the department
based on the geographic size and population of the region, giving
equal weight to each factor. These funds shall be available to state
conservancies operating within the region or, for areas in which
no state conservancy operates, to the Wildlife Conservation Board
for grants or for direct expenditures consistent with the purposes
of this chapter and consistent with the conservation plans
developed pursuant to Section 79740.

begin insert 79740. end insert   

The Natural Resources Agency shall develop and adopt
a statewide resource protection plan to identify priorities for
expending funds provided in subdivision (b) of Section 79734 that
includes priorities for the State Coastal Conservancy and the
Wildlife Conservation Board. Conservation plans developed and
adopted by state conservancies shall be consistent with statewide
priorities adopted by the Natural Resources Agency and shall
govern the expenditure of funds available pursuant to Section
79736.

 

Chapter   begin insert 5. end insert Flood Control and Stormwater Management

 

begin insert 79750. end insert   

(a) It is the intent of the Legislature that this chapter
provide funds for disaster preparedness, flood control, and
stormwater management in a manner that leverages the maximum
amount of federal and local matching funds and that prioritizes
project selection and encourages multibenefit project design to
achieve the maximum public benefits.

(b) The sum of one billion three hundred million dollars
($1,300,000,000) shall be available for the purposes of this
chapter.

begin insert 79752. end insert   

From the funds described in Section 79750, five hundred
million ($500,000,000) shall be available to the department to
implement the Central Valley Flood Protection Plan, including
the following:

(a) The evaluation, repair, rehabilitation, or replacement of
levees, weirs, bypasses, or other facilities. Projects of the Central
Valley Flood Protection Plan shall be designed for multiple
benefits, wherever feasible, in order to maximize water supply,
water quality, and ecosystem benefits. Investments necessary to
achieve multiple benefits shall be eligible expenditures. The
department shall develop and implement mitigation through
regional advance mitigation plans, wherever feasible, to lower the
cost, decrease delay, and improve the conservation benefits of
mitigation.

(b) Increasing the level of flood protection of urban and
urbanizing areas including state participation in federal and state
authorized flood control projects, feasibility studies, design of
federal flood damage reduction, and related projects, and reservoir
reoperation and groundwater flood storage projects that improve
flood protection.

begin insert 79754. end insert   

From the funds described in Section 79750, four
hundred million dollars ($400,000,000) shall be available to the
state board for competitive grants and loans for stormwater
management projects pursuant to this section.

(a) Eligible projects shall assist in compliance with total
maximum daily load implementation plans and be consistent with
all applicable waste discharge requirements.

(b) Eligible projects are facilities and infrastructure to reduce,
manage, treat, and capture for water supply stormwater, and urban
runoff, including, but not limited to:

(1) Detention and retention basins.

(2) Dry weather diversion facilities, trash filters, and screens.

(3) Treatment wetlands creation and enhancement.

(4) Stormwater runoff reduction projects, including permeable
surface installation, cisterns, and collection and treatment facilities
for groundwater recharge.

(5) Other stormwater management infrastructure for low-impact
development.

(c) The state board shall require not less than a 50-percent local
cost share for grant funds, but may suspend or reduce the matching
requirements for disadvantaged communities.

(d) The state board shall award grants on a competitive basis
considering the following criteria:

(1) Water quality benefits of the project, such as the project’s
ability to reduce impairment of the receiving water body.

(2) Cost-effectiveness.

(3) Public health benefits of the project.

(4) Flood management benefits.

(5) Water supply benefits.

(6) Demonstrated contribution to reducing reliance on imported
water.

(e) Eligible recipients shall be local public agencies.

(f) Eligible projects must be outside of the area of the Central
Valley Flood Protection Plan.

begin insert 79756. end insert   

Notwithstanding Section 79754, fifty million dollars
($50,000,000) shall be available to the Department of Conservation
from the funds described in Section 79754 for competitive grants
for resource conservation districts and other qualified nonprofit
organizations for projects that reduce or manage runoff from
irrigated agricultural lands for the benefit of surface and
groundwater quality.

begin insert 79758. end insert   

From the funds described in Section 79750, four
hundred million dollars ($400,000,000) shall be available to reduce
the risk of levee failure and flood in the Delta for any of the
following:

(a) Local assistance under the Delta levee maintenance
subventions program under Part 9 (commencing with Section
12980) of Division 6, as that part may be amended.

(b) Special flood protection projects under Chapter 2
(commencing with Section 12310) of Part 4.8 of Division 6, as
that chapter may be amended.

(c) Levee improvement projects that increase the resiliency of
levees within the Delta to withstand earthquake, flooding, or sea
level rise.

(d) Emergency response and repair projects.

 

Chapter   begin insert 6. end insert Water System Operational Improvements

 

begin insert 79760. end insert   

The sum of one billion dollars ($1,000,000,000) shall
be available to the commission for water system operational
improvements that meet the requirements of this section, including
all of the following:

(a) Projects shall be selected by the commission through a
competitive public process that ranks projects based on the
expected public benefits received for public investment.

(b) Eligible projects consist only of the following:

(1) Surface storage projects identified in the CALFED Bay-Delta
Programmatic Record of Decision, dated August 28, 2000, except
that projects at Lake Shasta shall not be eligible.

(2) Groundwater storage projects and groundwater
contamination prevention or remediation projects that augment
groundwater supplies, and improve the long term sustainability
of groundwater resources, including reducing overdraft.

(3) Conjunctive use and reservoir reoperation projects including
associated infrastructure.

(4) Projects that restore the capacity of reservoirs currently
impaired by sediment buildup or other impairment.

(5) Projects that result in a permanent reduction of water
exported from the Delta and a transfer of the equivalent water
right to in-stream flow pursuant to Section 1707. Priority shall be
given to projects that also result in the permanent elimination of
irrigation runoff contributing to salinity in the San Joaquin Valley.

(6) Recycled water storage facilities.

(c) A project shall not be funded unless it provides measurable
improvements to the Delta ecosystem.

(d) Funds allocated pursuant to this section may be expended
solely for the following public benefits:

(1) Ecosystem improvements, including, but not limited to,
changing timing of diversions, improvement in flow conditions,
temperature, or other benefits that contribute to restoration of
aquatic ecosystems and native fish and wildlife.

(2) Water quality improvements in the Delta or in other river
systems that provide significant public trust resources or that clean
up and restore groundwater resources.

(3) Flood control benefits, including, but not limited to,
increases in flood reservation space in existing reservoirs by
exchange for existing or increased water storage benefits.

(e) The commission, in consultation with the Department of
Fish and Wildlife, the state board, and the department, shall
develop and adopt, by regulation, methods for quantification and
management of public benefits. The regulations shall include
priorities and relative environmental value of ecosystem benefits
provided by the Department of Fish and Wildlife and the priorities
and relative environmental value of water quality benefits as
provided by the state board.

(f) Funds shall not be expended pursuant to this chapter for the
costs of environmental mitigation measures or compliance
obligations except for those associated with providing the public
benefits as described in subdivision (d).

begin insert 79762. end insert   

No funds available pursuant to Section 79760 may be
allocated to a project until the commission approves the project
based on the following determinations:

(a) The commission has adopted the regulations specified in
Section 79760 and specifically quantified and made public the cost
of the public benefits associated with the project.

(b) The department has entered into a contract with each party
that will derive benefits, other than public benefits, from the project
that ensures the party will pay its share of the total costs of the
project. The benefits available to a party shall be consistent with
that party’s share of total project costs.

(c) The department has entered into a contract with the
Department of Fish and Wildlife and the state board, after those
agencies have made a finding that the public benefits of the project
for which that agency is responsible meet all the requirements of
this chapter, to ensure that public contributions of funds pursuant
to this chapter achieve the public benefits identified for the project.

(d) The commission has held a public hearing for the purposes
of providing an opportunity for the public to review and comment
on the information required to be prepared pursuant to this section.

(e) All of the following conditions are met:

(1) Feasibility studies have been completed.

(2) The commission has found and determined that the project
is feasible, is consistent with all applicable laws and regulations,
and will advance the long-term objectives of restoring ecological
health and improving water management, including the beneficial
uses of the Delta.

(3) All environmental documentation has been completed and
all other federal, state, and local approvals, certifications, and
agreements required to be completed have been obtained.

(f) The commission shall submit to the fiscal committees and
the appropriate policy committees of the Legislature its findings
for each criteria identified in this section for any project funded
pursuant to this chapter.

begin insert 79764. end insert   

(a) The public benefit cost share of a project funded
pursuant to this chapter may not exceed 50 percent of the total
cost of the project.

(b) No project may be funded unless it provides ecosystem
improvements that are at least 50 percent of the public benefits of
the project funded under this chapter.

 

Chapter   begin insert 7. end insert General Provisions

 

begin insert 79770. end insert   

The proceeds of bonds issued and sold pursuant to this
division shall be deposited in the Safe Drinking Water, Water
Quality, and Flood Protection Fund of 2014, which is hereby
created in the State Treasury. Moneys in the fund shall be
available, upon appropriation by the Legislature, in the manner
and for the purposes set forth in this division.

begin insert 79772. end insert   

An amount that equals not more than 5 percent of the
funds allocated for a program pursuant to this division may be
used to pay the administrative costs of that program.

begin insert 79774. end insert   

Up to 10 percent of funds allocated for each program
funded by this division may be used to finance planning and
monitoring necessary for the successful design, selection, and
implementation of the projects authorized under that program.
This section shall not otherwise restrict funds ordinarily used by
an agency for “preliminary plans,” “working drawings,” and
“construction” as defined in the annual Budget Act for a capital
outlay project or grant project. Water quality monitoring shall be
integrated into the surface water ambient monitoring program
administered by the state board.

begin insert 79776. end insert   

Chapter 3.5 (commencing with Section 11340) of Part
1 of Division 3 of Title 2 of the Government Code does not apply
to the development or implementation of programs or projects
authorized or funded under this division other than Chapter 6
(commencing with Section 79760).

begin insert 79778. end insert   

(a) Prior to disbursing grants pursuant to this division,
each state agency that is required to administer a competitive
grant program under this division shall develop project solicitation
and evaluation guidelines. The guidelines may include a limitation
on the dollar amount of grants to be awarded.

(b) Prior to disbursing grants, the state agency shall conduct
three public meetings to consider public comments prior to
finalizing the guidelines. The state agency shall publish the draft
solicitation and evaluation guidelines on its Internet Web site at
least 30 days before the public meetings. One meeting shall be
conducted at a location in northern California, one meeting shall
be conducted at a location in the central valley of California, and
one meeting shall be conducted at a location in southern
California. Upon adoption, the state agency shall transmit copies
of the guidelines to the fiscal committees and the appropriate policy
committees of the Legislature.

(c) Projects funded with proceeds from this division shall
promote state planning priorities consistent with the provisions
of Section 65041.1 of the Government Code and sustainable
communities strategies consistent with the provisions of
subparagraph (B) of paragraph (2) of subdivision (b) of Section
65080 of the Government Code.

(d) To the extent feasible, in implementing subdivision (a) of
Section 79734, the Delta Conservancy shall seek to achieve wildlife
conservation objectives through projects on public lands or
voluntary projects on private lands. Funds available pursuant to
subdivision (a) of Section 79734 may be used, in consultation with
the Department of Fish and Wildlife, for payments to landowners
for the creation of measurable habitat improvements or other
improvements to the condition of endangered or threatened species.
The Delta Conservancy may develop and implement a competitive
habitat credit exchange mechanism in order to maximize voluntary
landowner participation in projects that provide measurable
habitat or species improvements in the Delta. These funds shall
not be used to subsidize or decrease the mitigation obligations of
any party.

(e) In implementing subdivision (a) of Section 79734, the Delta
Conservancy shall coordinate, cooperate, and consult with the
city or county in which a grant is proposed to be expended or an
interest in real property is proposed to be acquired and with the
Delta Protection Commission. Acquisitions pursuant to subdivision
(a) of Section 79734 shall be from willing sellers only.

(f) In implementing subdivision (a) of Section 79734, the Delta
Conservancy shall require grantees to demonstrate how local
economic impacts, including impacts related to the loss of
agricultural lands, will be mitigated.

(g) Funds provided by this division shall not be used to acquire
land via eminent domain. Funds from this division may be used to
acquire property from willing sellers.

(h) Restoration and ecosystem protection projects funded by
Section 79736 shall use the services of the California Conservation
Corps or community conservation corps whenever feasible.

(i) In implementing Section 79740, the Natural Resources
Agency shall prioritize existing obligations for state watershed
restoration investments, including, but not limited to, dam removal
and related activities on the Klamath River, San Joaquin River
restoration and restoration, of migratory bird habitat on the Salton
Sea.

begin insert 79780. end insert   

It is the intent of the people that the investment of public
funds pursuant to this division result in public benefits.

begin insert 79782. end insert   

The State Auditor shall annually conduct a
programmatic review and an audit of expenditures from the fund.
The State Auditor shall report its findings annually on or before
March 1 to the Governor and the Legislature, and shall make the
findings available to the public.

begin insert 79784. end insert   

Funds provided by this division shall not be used to
support or pay for the costs of environmental mitigation measures
or compliance obligations of any party except as part of the
environmental mitigation costs of projects financed by this division.
Funds provided by this division may be used for environmental
enhancements or other public benefits.

begin insert 79786. end insert   

Funds provided by this division shall not be expended
to pay costs associated with design, construction, operation,
maintenance, or mitigation of new Delta conveyance facilities.

begin insert 79788. end insert   

The Legislature may enact legislation necessary to
implement programs funded by this division.

begin insert 79790. end insert   

Eligible applicants under this division are public
agencies, nonprofit organizations, public utilities, and mutual
water companies. To be eligible for funding under this division, a
project proposed by a public utility that is regulated by the Public
Utilities Commission or a mutual water company shall have a
clear and definite public purpose and shall benefit the customers
of the water system.

begin insert 79792. end insert   

(a) This division does not diminish, impair, or
otherwise affect in any manner whatsoever any area of origin,
watershed of origin, county of origin, or any other water rights
protections, including, but not limited to, rights to water
appropriated prior to December 19, 1914, provided under the law.
This division does not limit or otherwise affect the application of
Article 1.7 (commencing with Section 1215) of Chapter 1 of Part
2 of Division 2, Sections 10505, 10505.5, 11128, 11460, 11461,
11462, and 11463, and Sections 12200 to 12220, inclusive.

(b) For the purposes of this division, an area that utilizes water
that has been diverted and conveyed from the Sacramento River
hydrologic region, for use outside the Sacramento River hydrologic
region or the Delta, shall not be deemed to be immediately adjacent
thereto or capable of being conveniently supplied with water
therefrom by virtue or on account of the diversion and conveyance
of that water through facilities that may be constructed for that
purpose after January 1, 2014.

(c) Nothing in this division supersedes, limits, or otherwise
modifies the applicability of Chapter 10 (commencing with Section
1700) of Part 2 of Division 2, including petitions related to any
new conveyance constructed or operated in accordance with
Chapter 2 (commencing with Section 85320) of Part 4 of Division
35.

(d) Unless otherwise expressly provided, nothing in this division
supersedes, reduces, or otherwise affects existing legal protections,
both procedural and substantive, relating to the state board’s
regulation of diversion and use of water, including, but not limited
to, water right priorities, the protection provided to municipal
interests by Sections 106 and 106.5, and changes in water rights.
Nothing in this division expands or otherwise alters the state
board’s existing authority to regulate the diversion and use of
water or the courts’ existing concurrent jurisdiction over California
water rights.

(e) Nothing in this division limits or otherwise affects the
application of Chapter 2 (commencing with Section 85320) of Part
4 of Division 35.

 

Chapter   begin insert 8. end insert Fiscal Provisions

 

begin insert 79820. end insert   

Bonds in the total amount of five billion six hundred
million dollars ($5,600,000,000), 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.

begin insert 79822. end insert   

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.

begin insert 79824. end insert   

(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 Safe Drinking Water, Water Quality, and Flood
Protection Finance Committee is hereby created. For purposes of
this division, the Safe Drinking Water, Water Quality, and Flood
Protection 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.”

begin insert 79826. end insert   

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.

begin insert 79828. end insert   

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.

begin insert 79830. end insert   

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 79832, appropriated
without regard to fiscal years.

begin insert 79832. end insert   

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.

begin insert 79834. end insert   

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.

begin insert 79836. end insert   

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.

begin insert 79838. end insert   

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.

begin insert 79840. end insert   

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.

begin insert 79842. end insert   

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.

begin insert 79844. end insert   

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.

end insert

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 begin delete California Clean, Secure Water Supply and
Delta Recovery end delete begin insert Safe Drinking Water, Water Quality, and Flood
Protection end insert Act of 2014, as set forth in that section at the November
4, 2014, statewide general election.

begin insert

begin insert SEC. 6. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

In order to fund safe drinking water, water quality, and flood
protection at the earliest possible date, it is necessary that this act
take effect immediately.

end insert