BILL ANALYSIS Ó
AB 746
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
746 (Ting)
As Amended June 22, 2015
Majority vote
--------------------------------------------------------------------
|ASSEMBLY: | | (May 18, |SENATE: |26-11 | (August 17, |
| |51-24 |2015) | | |2015) |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------
Original Committee Reference: L. GOV.
SUMMARY: Extends the sunset date from January 1, 2029, to
January 1, 2049, for statutes governing the San Francisco Bay
Restoration Authority (Authority) and makes other specified
changes.
The Senate amendments:
1)Specify that the Authority may incur general obligation bonded
indebtedness for the acquisition or improvement of real
property or for funding or refunding of any outstanding
indebtedness.
2)Establish a cap for the total amount of outstanding bonded
indebtedness the Authority may incur not to exceed $1.5
billion.
AB 746
Page 2
3)Add an elected official of a bayside special district to the
list of elected officials that may serve as the Chair of the
Authority, instead of a resident of the San Francisco Bay
Area.
4)Find and declare that the changes made by this bill explicitly
affirm the authority of the Authority to incur general
obligation (GO) bonded indebtedness, so as to implement the
Legislature's intent when the statute first became operative
on January 1, 2009.
5)Make technical and conforming changes.
EXISTING LAW:
1)Establishes the San Francisco Bay Restoration Authority Act
(Act), which establishes the jurisdiction of the Authority to
include all areas within the San Francisco Bay Area
Conservancy Program, which includes the Counties of Alameda,
Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa
Clara, Solano, and Sonoma.
2)Establishes the governing board for the Authority composed of
seven members, as specified, to be appointed by the
Association of Bay Area Governments, including one member, to
serve as chair, who must be a resident of the Bay Area with
expertise in the implementation of the San Francisco Bay Area
Conservancy Program.
3)Authorizes the Authority, until December 31, 2028, to levy a
benefit assessment, special tax, or property-related fee
consistent with the requirements of California Constitution
Articles XIII C and XIII D, as specified.
4)Allows the Authority to issue revenue bonds and incur bond
AB 746
Page 3
indebtedness, subject to the following requirements:
a) Requires the principal and interest of any bond
indebtedness to be paid and discharged prior to January 1,
2029;
b) Requires the Authority to comply with provisions in
existing law that govern recreation and park districts
incurring GO bonded indebtedness; and,
c) Prohibits the total amount of indebtedness incurred
outstanding at any one time from exceeding 10% of the
Authority's total revenue in the preceding fiscal year.
5)Requires, when the Authority proposes to levy a special tax,
the board of supervisors of the county or counties in which
the special tax is proposed to be levied, to call a special
election on the measure.
6)Repeals the Act as of January 1, 2029.
AS PASSED BY THE ASSEMBLY, this bill:
1)Extended the sunset date for the Authority from January 1,
2029, to January 1, 2049.
2)Extended 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)Added a cross reference to California Constitution Article
XIII A to a provision in existing law that authorizes the
Authority to levy a benefit assessment, special tax or
property-related fee pursuant to the requirements in
California Constitution Articles XIII C and XIII D.
AB 746
Page 4
4)Specified that the Authority may incur bond indebtedness
consistent with California Constitution Article XIIIA, Section
1 (tax limitation relating to ad valorem property tax).
5)Extended the date that the Authority must pay and discharge
the principal and interest of any bond indebtedness from
January 1, 2029, to January 1, 2049.
6)Repealed a provision of current law that prohibits the
Authority from incurring more bonded indebtedness than 10% of
the Authority's total revenues in the preceding fiscal year.
7)Made changes to provisions in current law that establish
procedures for the Authority in conducting a multi-county
election for a proposed special tax measure, as follows:
a) Deletes references to a "special tax" and replaces with
the term "measure";
b) Adds to the list of provisions in existing law the
Authority can propose a measure to generate revenues, a
cross reference to current law which allows the Authority
to incur indebtedness, subject to certain requirements;
and,
c) Adds to the list of constitutional requirements a
proposed measure must comply with, a cross reference to
California Constitution (tax limitation relating to ad
valorem property tax).
8)Extended the repeal date, from January 1, 2017, to January 1,
2019, for provisions in existing law which requires the
Authority to reimburse each county for the incremental costs
AB 746
Page 5
of the first election at which the Authority proposes a
measure.
9)Required the appropriations limit for the Authority to be
originally established based on the receipt from the initial
revenue generating measure because the Authority has no state
revenues as of the effective date of this bill. Prohibits the
establishment of an appropriations limit from being deemed a
change in an appropriations limit for purposes of California
Constitution Article XIII B, Section 4.
10)Required 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.
11)Found and declared that it is the intent of the Legislature
to explicitly affirm the Authority's ability to incur GO bond
indebtedness, pursuant to a specified paragraph and
subdivision in California Constitution Article XIIIA, Section
1 of the Constitution and existing law which governs
recreation and park districts incurring GO bonded
indebtedness.
12)Found and declared that 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;
therefore, the Authority has no associated appropriations
limit pursuant to California Constitution Article XIII B as of
the date of enactment of this bill.
13)Provided that no reimbursement is required by this bill
because the local agency has the authority to levy service
charges, fees, or assessments sufficient to pay for the
program or level or service mandated by this bill.
AB 746
Page 6
14)Made other technical changes.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
1)The San Francisco Bay Restoration Authority. 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. 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 granted the Authority the ability to utilize
several financial tools to raise revenue, including levying a
benefit assessment, special tax, or property-related fee,
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.
As a regional government agency, the Authority spans across
nine counties. AB 2103 (Hill), Chapter 373, Statutes of 2010,
prescribes the method of how the Authority places a proposal
to levy a special tax before the voters. The Authority's
officials wanted to specify the procedures for conducting a
special election on a special tax proposed by the Authority
and to clarify their existing statutory authority to levy
special taxes.
AB 746
Page 7
AB 1656 (Fong), Chapter 535, Statutes of 2012, made membership
and project eligibility changes, but also contained a
provision to extend the sunset date for the Authority from
2029 to 2036. At the time, the Authority wanted the extension
to ensure that they would be able to administer revenues from
a regional ballot measure they planned to submit to voters.
The sunset date extension was removed from AB 1656 following
policy concerns raised over the lack of information about the
timing of a proposed ballot measure. Most recently, SB 279
(Hancock), Chapter 514, Statutes of 2013, specified procedures
for conducting a multi-county election to approve a special
tax measure proposed by the Authority.
2)Bill Summary. Current law provides several sunset dates that
govern the Authority. This bill provides a 20-year sunset
date extension for the following: a) The Authority, until
January 1, 2049; b) The power to levy a benefit assessment,
special tax, or property-related fee, until December 31, 2048;
and, c) The date the principal and interest of any bond
indebtedness must be paid, until January 1, 2049.
Additionally, this bill specifies that the Authority may incur
GO bonded indebtedness for the acquisition or improvement of
real property or for funding or refunding any outstanding
indebtedness.
Current law establishes appropriations limits to create a
restriction on the amount of government revenue that can be
appropriated in any fiscal year. This bill finds and declares
that the Authority has no appropriations limit pursuant to the
Constitution because it has not received any state or local
government revenues. Under this bill, the appropriations
limit for the Authority would be established based on the
revenue generated by receipt of a measure adopted by the
voters.
Current law requires a resident of the San Francisco Bay Area
to serve as Chair of the Authority. This bill replaces the
public member, and instead, requires an elected official of a
AB 746
Page 8
bayside city, county, or special district to serve as Chair.
This bill is sponsored by the Authority.
3)Author's Statement. According to the author, "The San
Francisco Bay is one of our nation's greatest natural
treasures, and has a critical impact on the health and
well-being of all the local communities it surrounds.
However, the San Francisco Bay has endured enormous harm over
the last century caused by landfill and toxic pollution. In
2008, following years of budget cuts for natural resources
protection, the Legislature created the 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. Since
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 and is authorized to do so
by a variety of means.
"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."
4)Revenue Options Identified by the Authority. The Authority
decided against placing a parcel tax measure on the ballot in
2014 and has continued to examine revenue options. Most
AB 746
Page 9
recently, the Authority has discussed at several meetings of
their governing board the feasibility of placing a parcel tax
measure or a general obligation bond (GO bond) measure backed
by ad valorem property taxes on the ballot in 2016.
In addition to cities, counties, and school districts, the
Legislature has granted the authority to several types of
special districts to issue GO bonds. 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.
5)Policy Consideration. The Legislature established the
Authority in 2008, and since then, the Legislature has passed
three bills making additional changes to their enabling Act,
as requested by the Authority. However, the Authority has yet
to raise any revenue to fulfill their statutory purpose.
Supporters of this bill argue that the sunset extension is
necessary to accommodate a 30-year GO bond or revenue bond
term that would allow the Authority to fulfill their statutory
mission. The Legislature may wish to consider, given recent
history, if this is a reasonable extension.
6)Arguments in Support. Supporters argue that this bill is
essential for the Authority to propose a revenue measure to
the voters in 2016 and accomplish its statutory mission.
7)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.
Analysis Prepared by:
Misa Lennox / L. GOV. / (916) 319-3958 FN:
AB 746
Page 10
0001261