BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 401 (Dodd) - Low-Income Water Rate Assistance Program. ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: July 9, 2015 |Policy Vote: E., U., & C. 8 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 17, 2015 |Consultant: Marie Liu | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 401 would require the Department of Community Services and Development (CSD), in collaboration with the Board of Equalization (BOE), by January 1, 2017, to develop a plan for the funding and implementation of the Low-Income Water Rate Assistance Program. Fiscal Impact: One-time costs of approximately $331,000 to the General Fund over two years to CSD for the development of feasibility plan. Cost pressures, possibly in the millions of dollars, to the General Fund or unknown special fund for the implementation of the feasibility plan. Background: Existing law requires the California Public Utilities Commission (CPUC) to establish the California Alternative Rates AB 401 (Dodd) Page 1 of ? for Energy (CARE) program to discount rates for gas and electric customers that have incomes less than 200 percent of the federal poverty level. The CPUC is also required to consider a program of rate relief for low income customers of water corporations (PUC §739.8). Proposed Law: This bill would require CSD to develop a plan for the funding and implementation of the Low-Income Water Rate Assistance Program, which would provide support for households with income that is less than 200 percent of the federal poverty guideline level. CSD would be required to collaborate with the BOE and relevant stakeholders. CSD would be required to develop the plan by January 1, 2017 and report its findings regarding the feasibility and desired structure of the program to the Legislature by February 1, 2017. Related Legislation: AB 1434 (Yamada, 2014) was substantially similar to this bill and was held on the Senate Appropriation's suspense file. Staff Comments: To develop the required plan, CSD would incur costs of $219,000 in FY 2015-16 and $112,000 in FY 2016-17 for increased staff workload and consulting costs. The BOE is likely to have minor and absorbable costs to participate in the development of the plan assuming it will only be providing technical assistance to the effort. The BOE notes that it has expertise in tax collection and administration and does not have a knowledge base on low-income funding assistance. This bill would also result in cost pressures for the implementation of the plan. The amount of the cost pressure or source of funding are unknown as it will depend on the design and structure of the recommended program. However, based on the AB 401 (Dodd) Page 2 of ? size of the CARE program, the Low-income Water Rate Assistance Program could easily be in the millions of dollars. The cost pressures would also include costs to administer such a rate assistance program. -- END --