BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |AB 746 |Hearing | 6/17/15 |
| | |Date: | |
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|Author: |Ting |Tax Levy: |No |
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|Version: |6/10/15 |Fiscal: |Yes |
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|Consultant|Weinberger |
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SAN FRANCISCO BAY RESTORATION AUTHORITY
Makes several changes to statutes relating to the San Francisco
Bay Restoration Authority's governing board and financing
powers.
Background
State law creates the San Francisco Bay Restoration Authority
(SFBRA) as a regional entity with jurisdiction extending
throughout the San Francisco Bay Area (AB 2954, Lieber, 2008).
The Authority's purpose is to raise and allocate resources for
the restoration, enhancement, protection, and enjoyment of
wetlands and wildlife habitats in the San Francisco Bay and
along its shoreline.
Since 2009, the SFBRA has been planning to submit a ballot
measure to voters in the nine San Francisco Bay Area counties
seeking approval of revenues to fund the Authority's restoration
activities. In recent years, the Legislature has amended the
SFBRA's enabling act to:
Specify requirements that apply to a regional ballot
measure submitted to voters by the Authority (AB 2103,
Hill, 2010).
Revise the Authority's boundaries and revise the
definition of eligible projects (AB 1656, Fong, 2012).
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Specify procedures for conducting a multi-county
election to approve a special tax measure proposed by the
Authority (SB 279, Hancock, 2013).
The SFBRA's governing board is now preparing to submit a ballot
measure to voters in 2016 seeking approval either of parcel
taxes or general obligation bonds to finance restoration
projects around the San Francisco Bay. In anticipation of
submitting a ballot measure to voters, SFBRA officials want to
amend the statutes that govern the Authority to:
Clarify the Authority's powers to incur general
obligation bonded indebtedness.
Define the manner in which the Authority's
appropriations limit is to be established.
Extend statutory sunset dates in the Authority's
enabling act.
Modify the qualifications that apply to the Chair of the
Authority's governing board.
Proposed Law
General obligation bonds . Current law, the San Francisco Bay
Restoration Authority Act, explicitly allows the Authority to
issue revenues bonds. The Act also allows the Authority to
incur bonded indebtedness subject to a requirement that the
Authority must comply with specified statutes that allow
recreation and park districts' boards of directors, with 2/3
voter approval, to issue general obligation bonds to pay for
acquiring or improving real property. Assembly Bill 746:
Specifies that the Authority may incur a general
obligation bonded indebtedness for the acquisition or
improvement of real property or for funding or refunding of
any outstanding indebtedness.
Requires that the total amount of bonded indebtedness
that the Authority may incur pursuant to both its revenue
bond and general obligation bond authority must not exceed
$1.5 billion.
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Contain a legislative finding and declaration that the
changes the bill makes to specified provisions in existing
law explicitly affirm the San Francisco Bay Restoration
Authority's authority to incur general obligation bond
indebtedness so as to implement the Legislature's intent
when those provisions were first enacted.
Appropriations limit . Article XIIIB of the California
Constitution establishes and defines annual appropriation limits
on each local government based on an annual appropriation for
the prior fiscal year and requires adjustments for changes in
the cost of living, changes in population, and other specified
factors. Assembly Bill 746:
Contains a legislative finding and declaration that the
Authority has no associated appropriations limit as of the
bill's effective date because the Authority has not assumed
any existing duties from another local or state government
entity and has received no state or local government
revenues not counted toward another entity's appropriations
limit.
Requires that the appropriations limit for the Authority
must be originally established based on receipts from the
initial measure that would generate revenues for the
authority, and that establishment of an appropriations
limit must not be deemed a change in an appropriations
limit for purposes of the California Constitution.
Sunset extensions . Current law prohibits the Authority from
levying a benefit assessment, special tax, or property-related
fee after December 31, 2028. Assembly Bill 746 extends the
period of time during which the Authority can levy a benefit
assessment, special tax, or property-related fee by 20 years,
through December 31, 2048.
Current law requires that the Authority must reimburse counties
only for the incremental costs incurred by the county elections
official related to submitting a ballot measure proposed by the
Authority to the voters. Assembly Bill 746 extends by two
years, from January 1, 2017 to January 1, 2019, the sunset date
on the election cost reimbursement requirements.
Current law automatically repeals the San Francisco Bay
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Restoration Authority Act on January 1, 2029. Assembly Bill 746
extends the sunset date on the statutes governing the San
Francisco Bay Restoration Authority by 20 years, until January
1, 2049.
Chair of the governing board . Current law requires that the
Authority's governing board must be comprised of seven members,
including a Chair, who must be a resident of the San Francisco
Bay Area and have expertise in the implementation of the
California Coastal Conservancy's San Francisco Bay Area
Conservancy Program. Assembly Bill 746 requires that the Chair
of the Authority's governing board must be an elected official
of a bayside county, city, or special district who has expertise
in the implementation of the California Coastal Conservancy's
San Francisco Bay Area Conservancy Program.
Assembly Bill 746 makes additional technical and conforming
changes to the statutes governing the San Francisco Bay
Restoration Authority.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Providing clean water, flood control,
habitat, and economic benefits, wetlands are crucial to the
health of the San Francisco Bay and the well-being of the
millions of residents in the communities that surround it. In
2008, following years of budget cuts for natural resources
protection, the Legislature created the San Francisco Bay
Restoration Authority, to determine how to raise local revenues
to restore over 36,000 acres of publicly-owned bay shoreline
into tidal wetlands, and to provide oversight of funded
restoration projects. Restoring the wetlands along the San
Francisco Bay requires long-term investment, estimated to cost
about $1.43 billion over 50 years. Because limited state and
federal funds are available for these projects, the Authority is
in the process of raising new revenue to narrow the funding gap
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and is authorized to do so by a variety of means. The Authority
has statutory power to levy benefit assessments,
property-related fees, and special taxes consistent with the
requirements of Proposition 218 throughout its nine-county
jurisdiction, in addition to applying for grants, fundraising,
and issuing bonds. After years of careful consideration, the
Authority believes that a bond, rather than an assessment, fee,
or tax, would provide the most stable source of revenue for
ongoing restoration projects. However, the SFBRA's enabling act
contains ambiguities and limitations could preclude the
Authority from using its bonding authority to maximum benefit.
AB 746 will allow 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.
2. Expanded powers . By adding 20 years to the period of time
during which current law allows the SFBRA to raise revenues and
work on restoration projects, AB 746 makes it easier to finance
the Authority's activities using long-term debt. However, these
sunset extensions and the repeal of an existing cap on the
Authority's bonding capacity may result in Bay Area taxpayers
paying more in taxes over a longer period of time than they
would under existing law. Despite the fact that the Authority
must obtain voter approval before imposing any new taxes,
assessments, or fees, some taxpayer advocates object to any
expansion of the Authority's current revenue and financing
powers.
3. Crunching numbers . The $1.5 billion cap on the SFBRA's
bonding capacity that would be imposed by AB 746 represents
slightly more than 0.1% of the $1.3 trillion total assessed
value of taxable property within the nine counties that are
included within the Authority's boundaries. SFBRA officials
estimate that, if the full amount of $1.5 billion in general
obligation debt were authorized over 30 years, it would result
in ad valorem taxes of approximately $9.66 per $100K of assessed
value of taxable property within the Authority's jurisdiction.
Between 2012 and 2014, voters in six Bay Area counties approved
seven local general obligation bond ballot measures requiring a
2/3 vote that authorized, in total, more than $1.5 billion in
long-term bonded indebtedness.
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4. Let's get technical . To clarify AB 746's provisions, the
Committee may wish to consider amending the bill to insert "San"
before "Francisco" on page 9, line 1.
5. Mandate . The California Constitution requires the state to
reimburse local governments for the costs of new or expanded
state mandated local programs. Because AB 746 imposes
additional duties on local officials who must implement the
bill's provisions, Legislative Counsel says that it imposes a
new state mandate. However, AB 746 disclaims the state's
responsibility for reimbursing local costs because the local
agencies have the authority to levy service charges, fees, or
assessments sufficient to pay for the program or level of
service mandated by the bill.
Assembly Actions
Assembly Local Government Committee: 6-3
Assembly Appropriations Committee: 12-5
Assembly Floor: 51-24
Support and
Opposition (6/11/15)
Support : San Francisco Bay Restoration Authority; Audubon
California; Bay Area Council; California League of Conservation
Voters; City of Redwood City; Ducks Unlimited; San Francisco Bay
Conservation and Development Commission; San Mateo County Board
of Supervisors; Santa Clara County Open Space Authority; Save
the Bay; Silicon Valley Leadership Group; Sonoma Agricultural
Preservation and Open Space District; Sonoma Land Trust; The
Nature Conservancy.
Opposition : Howard Jarvis Taxpayers Association.
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