BILL ANALYSIS Ó
AB 955
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Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
955 (Mathis) - As Amended May 5, 2015
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|Policy |Governmental Organization |Vote:|20 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill authorizes the Office of Emergency Services (OES),
either independently or through other state or local agencies,
or nonprofit organizations to address the effects of a drought
by providing temporary water supplies for drinking and
sanitation purposes to property owners, and providing financial
assistance to property owners. The bill limits the water and
financial assistance recipients to homeowners, rental owners,
apartment buildings, and small businesses, requires recipients
to hold the state harmless for any damages that may result, but
otherwise allows OES to prescribe emergency rules and
regulations as necessary.
AB 955
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FISCAL EFFECT:
Estimated annual GF costs of approximately $680,000 for OES to
develop the program, create and manage a financial assistance
and lending function; significant additional costs for procuring
water supplies.
This bill does not name a source of funds for the prescribed
financing activities.
COMMENTS:
1)Purpose. According to the author, residents of East
Porterville are almost completely reliant upon individual
groundwater wells for drinking and sanitation water, and the
majority of these wells are now dry. In response, the
Governor ordered OES to provide assistance to local agencies
pursuant to the California Disaster Assistance Act. The
author claims that, under the Governor's order, assistance is
being provided to individual homeowners, but not to those
living in rental homes, apartment buildings, or small
businesses. This bill is intended to clarify that OES can
provide temporary assistance directly to all residents in
areas adversely affected by drought.
2)New OES Lending Authority. At present, OES provides
assistance only to local government agencies, and not directly
to individuals. This bill creates a lending authority for the
first time within OES, and authorizes OES to engage with
individuals instead of local agencies, significantly expanding
the scope and authority within OES. California has many
finance authorities that exist to facilitate particular
activity, but those authorities reside in other departments
AB 955
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and offices with expertise in evaluating credit and providing,
collecting, processing, and enforcing loans, such as the
Treasurer. Furthermore, OES coordinates among many state and
local agencies to offer concerted responses to emergencies.
This bill would instead place OES in a role that overlaps with
the local agencies it coordinates.
3)Limited Lending Criteria. State financing programs usually
contain specific lending criteria and limits codified in
statute, whereas this bill leaves those criteria to the
discretion of OES rulemaking, requiring only that OES
establish an income threshold above which property owners are
deemed to have "adequate resources" to provide their own
remedies. In theory, OES could lend an unlimited amount, at
no interest, to the corporate owner of a 2,000 unit apartment
building so long as the corporation was not too profitable.
4)No Strings Attached. Although it may be implied, AB 955 does
not necessarily even require the borrowed funds be used to
remedy water drinking and sanitation problems. As drafted,
the bill permits OES to lend assistance to anyone not meeting
the "adequate resources" standard, but does not include any
limitations on the use of funds.
The Committee may wish to consider whether this is an
appropriate expansion of OES authority, whether another agency
or department may be in a better position to provide the
financing, whether a source of funds should be identified to
allow OES to engage in lending activity, and whether
additional parameters for the program are needed to ensure
loaned funds are used to remedy water drinking and sanitation
problems.
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AB 955
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Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081