BILL ANALYSIS Ó
AB 746
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Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
746 (Ting) - As Amended April 14, 2015
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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,
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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.
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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
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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
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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