BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 401 (Dodd) - Low-Income Water Rate Assistance Program.
          
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          |Version: July 9, 2015           |Policy Vote: E., U., & C. 8 - 1 |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 17, 2015   |Consultant: Marie Liu           |
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          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  







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          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  








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          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. 


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