BILL ANALYSIS Ó AB 746 Page 1 Date of Hearing: May 6, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 746 (Ting) - As Amended April 14, 2015 ----------------------------------------------------------------- |Policy |Local Government |Vote:|6 - 3 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill grants a 20 year sunset extension to the San Francisco Bay Restoration Authority (Authority). Specifically, this bill: 1)Extends the sunset date for the Authority from January 1, AB 746 Page 2 2029, to January 1, 2049. 2)Extends the sunset date for the Authority to levy a benefit assessment, special tax, or property-related fee, as specified, from December 31, 2028, to December 31, 2048. 3)Extends the date that the Authority must pay and discharge the principal and interest of bond indebtedness from January 1, 2029, to January 1, 2049. 4)Repeals the law that prohibits the Authority from incurring more bonded indebtedness than 10% of the Authority's total revenues in the preceding fiscal year. 5)Broadens the ballot authority from a special tax to any measure that will generate revenues for the Authority to conduct a multi-county election for a proposed special tax measure. 6)Requires the Authority to call a special election when it proposes any measure that will generate revenues, not just for a special tax. 7)Extends the repeal date, from January 1, 2017, to January 1, 2019, for the Authority to reimburse each county for the incremental costs of the first election at which the Authority proposes a measure. 8)Requires an elected official of a bayside city or county, instead of a resident of the San Francisco Bay Area, to serve as the Chair of the Authority. AB 746 Page 3 FISCAL EFFECT: Negligible state fiscal impact. COMMENTS: 1)Purpose. According to the author, "This bill allows the Authority to effectively carry out its statutory mission to restore critical bay wetlands along the San Francisco Bay shoreline, by ensuring it has the ability to issue bonds in an amount and for a duration that will leverage the greatest impact. The bill would eliminate the restrictive limitation of the Authority's bonding authority to 10% of its prior year's revenue, which makes significant projects nearly impossible, and extend its existence to January 1, 2049, long enough for it to meet the obligations of any bonds issued. The bill would also ensure that any bond measure is uniformly submitted to voters across the nine counties within the Authority's jurisdiction, allowing the Authority to move forward in planning and seeking voter approval for an initial revenue measure to fund needed restoration projects." 2)Background. The Legislature established the Authority in 2008, as a regional government agency charged with raising and allocating resources for the restoration, enhancement, protection, and enjoyment of wetlands and wildlife habitat in the San Francisco Bay and along its shoreline. The Authority's mission is to formulate a strategy for raising local revenues to help restore 36,000 acres of publicly owned Bay shoreline into tidal wetlands. The estimated cost of such an endeavor is about $1.43 billion over 50 years. The Legislature authorized the Authority to raise revenue to AB 746 Page 4 support its mission by levying benefit assessments, special taxes, or property-related fees, subject to constitutional requirements. Proposition 218 (1996) established that a tax levied by a special-purpose authority is a special tax which requires two-thirds voter approval. Additionally, the Authority can issue revenue bonds under the Revenue Bond Law of 1941 and incur bond indebtedness, subject to specified requirements. To date, the Authority has not exercised its statutory authority to raise revenue. The Authority recently has discussed placing a parcel tax measure or a general obligation bond (GO bond) measure backed by ad valorem property taxes on the ballot in 2016. GO bonds are secured by the legal obligation to levy an ad valorem property tax on taxable property in an amount sufficient to pay the debt service. Two-thirds of voters must approve the issuance of a GO bond, and in doing so, approve the levy of an ad valorem tax to pay the bond. 3)Arguments in Support. The Authority and other environmental groups argue that this bill is essential for the Authority to propose a revenue measure to the voters in 2016 and accomplish its statutory mission. 4)Arguments in Opposition. Opposition argues that by removing bonding caps and increasing the number of years to generate revenue, this bill inhibits accountability and exposes Bay Area residents to the threat of higher taxes and assessments. Prior Legislation. a)SB 279 (Hancock), Chapter 514, Statutes of 2013, specified procedures for the Authority to conduct a multi-county AB 746 Page 5 election to approve a special tax measure. b)AB 1656 (Fong), Chapter 535, Statutes of 2012, made membership and project eligibility changes, and proposed extending the sunset date for the Authority from 2029 to 2036. The sunset date extension was later removed from the bill. c)AB 2103 (Hill), Chapter 373, Statutes of 2010, prescribes the method for the Authority to place a special tax before the voters. d)AB 2954 (Lieber), Chapter 690, Statutes of 2008, created the Authority as a regional government agency charged with raising and allocating resources for the restoration, enhancement, protection, and enjoyment of wetlands and wildlife habitat in the San Francisco Bay and along its shoreline. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081