BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2444 (Eduardo Garcia) - California Parks, Water, Climate, and  
          Coastal Protection and Outdoor Access For All Act of 2016
          
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          |Version: August 1, 2016         |Policy Vote: N.R. & W. 6 - 2,   |
          |                                |          GOV. & F. 4 - 1       |
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          |Urgency: Yes                    |Mandate: No                     |
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          |Hearing Date: August 1, 2016    |Consultant: Narisha Bonakdar    |
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          This bill meets the criteria for referral to the Suspense File.


          Bill  
          Summary:  AB 2444 enacts the California Parks, Water, Climate,  
          and Coastal Protection and Outdoor Access For All Act of 2016,  
          which, if approved by the voters, would authorize issuance of an  
          unspecified amount in State General Obligation bonds to finance  
          parks, water, climate adaptation, coastal protection, and  
          outdoor access programs. 


          Fiscal  
          Impact:  Unknown significant costs, in the low billions of  
          dollars.
           A total of approximately $735,000,000 in interest per billion  
            in bonds issued, assuming 30-year maturity at 4 percent  
            interest rate. (General Fund)
           Unknown, but potentially significant, costs to the State  
            Treasurers Office and administering agencies (bond funds).
           Nearly $3 million (General Fund) to the Secretary of State for  
            printing and postage for a supplemental ballot in the 2016  







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            election. This bill missed the deadline for printing for this  
            election. 


          Background:  Existing law authorizes the Legislature to pass legislation,  
          by a 2/3 vote, to place a proposed general obligation bond  
          measure before the voters on the statewide ballot, to authorize  
          the sale of bonds to finance various state purposes. General  
          obligation bonds have been one of the primary methods voters  
          have used to fund the acquisition and improvement of park lands,  
          open space, and wildlife areas; water conservation and  
          infrastructure projects, and related purposes. 
          The California Clean Water, Clean Air, Safe Neighborhood Parks  
          and Coastal Protection Act of 2002 (Proposition 40), a  
          legislative ballot measure approved by the voters in 2002,  
          authorized $2.6 billion in bond expenditures for parks and other  
          resource related purposes. 


          The Safe Drinking Water, Water Quality and Supply, Flood  
          Control, River and Coastal Protection Act of 2006 (Proposition  
          84), an initiative measure approved by the voters in 2006,  
          authorized bond expenditures of $5.4 billion, of which  
          approximately $875 million was for parks. 


          When public agencies issue bonds, they essentially borrow money  
          from investors, who provide cash in exchange for the agencies'  
          commitment to repay the principal amount of the bond plus  
          interest.  Bonds are usually either revenue bonds, which repay  
          investors out of revenue generated from the project the agency  
          buys with bond proceeds, or general obligation bonds, which the  
          public agency pays out of general revenues and are guaranteed by  
          its full faith and credit.  




          Proposed Law:  
            This bill enacts the California Parks, Water, Climate, and  
          Coastal Protection and Outdoor Access For All Act of 2016,  
          which, if approved by the voters, would authorize issuance of  
          $3.12 billion in State General Obligation bonds to finance  
          parks, water, climate adaptation, coastal protection, and  








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          outdoor access programs. 

          Specifically, this bill: 
          1) States legislative findings and declarations regarding  
          California's parks, natural resources and outdoor opportunities,  
          and the scale of unmet need and demand for, and lack of equal  
          access to, those resources and activities. It contains findings  
          and declarations regarding the benefits of investments for these  
          purposes to public health, and to state and local economies. 


          2) States that it is the intent of the people of the state that:  



              a) Public investments authorized by this bill provide public  
              benefits and address the most critical statewide needs and  
              priorities; 


              b) Priority is given to projects that leverage other funding  
              sources; 


              c) Projects receiving funding include signage informing the  
              public of the bond investments; 


              d) Administering entities be encouraged when developing  
              program guidelines for urban recreation and habitat  
              projects, to give favorable consideration to projects that  
              both provide urban recreation and protect or restore natural  
              resources, to the extent practicable, and authorizes  
              entities to pool funding for such purposes. 


          3) Includes a number of general provisions that apply to all of  
          the articles included in the Act, including: 


              a) Allows up to 10% of funds in each category to be used for  
              planning and monitoring. Planning funds for projects in  
              disadvantaged communities can exceed the 10% if needed. 









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              b) Requires at least 20% of funds in each article to be  
              allocated to severely disadvantaged communities. 

              c) Allows up to 10% of funds to go toward technical  
              assistance. Technical assistance may exceed 10% for  
              disadvantaged communities if needed. 


              d) Requires agencies administering the bond to develop  
              project solicitation and evaluation guidelines, to conduct 3  
              public meetings, and to publish draft guidelines on the  
              Internet. 


              e) Requires the Department of Finance to provide for an  
              independent audit of expenditures. 


              f) Requires projects that use California Conservation Corps  
              services or certified community conservation corps to be  
              given preference for grants where feasible. 


              g) Authorizes projects that include water efficiencies,  
              stormwater capture, or carbon sequestration features in the  
              project design to be given priority for grant funding. 


              h) Authorizes the Legislature to enact legislation necessary  
              to implement programs funded by the bond. 


          4) Authorizes funds to be available, upon appropriation of the  
          Legislature, for all of the following programs and purpose as  
          identified in each article of the bill: 


              a) Article 2 which would make available $995 million for  
              creation and expansion of safe neighborhood parks in  
              park-poor communities, in accordance with the Statewide Park  
              Development and Community Revitalization Act of 2008  
              competitive grant program [AB 31 (De León), Chapter 623,  
              Statutes of 2008]. 








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              b) Article 3 would provide $1.070 billion for local and  
              regional outdoor spaces as follows: 

                 i) $450 million for local park rehabilitation and  
                 improvement grants to local governments on a per capita  
                 basis. Requires a 20% local match unless the entity is a  
                 disadvantaged community. Describes the formula to be used  
                 to allocate the per capita funds between cities,  
                 districts, counties, and regional park districts, based  
                 on population. 


                 ii) $35 million for grants to cities and districts of  
                 less than 200,000 population in urbanized counties of  
                 less than 500,000 total population. A 20% match is  
                 required except for disadvantaged communities. 


                 iii) 60% of the $450 million is to go to cities and  
                 districts that are not regional park districts on a per  
                 capita basis except each jurisdiction receives a minimum  
                 of $250,000. 


                 iv) 40% of the $450 million is to go to counties and  
                 regional park districts on a per capita basis. 


                 There is a prohibition on recipients reducing their local  
                 expenditures after receiving bond funding. Grants must be  
                 consistent with local general plans or parks plans. There  
                 is a three year provision on encumbering a grant. 


              c) Article 4 contains $350 million in funding for state  
              parks, as follows: 


                 i) These funds are limited to existing parks for  
                 restoration and preservation, and to increase public  
                 access. No less than 80% of these funds must be directed  
                 to capital improvements that address deferred  








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                 maintenance. 


                 ii) $20 million for enterprise projects for new user  
                 experiences and revenue generation projects. 


                 iii) $20 million for grants to local agencies that  
                 operate state parks for deferred maintenance. A 25% match  
                 is required except for disadvantaged communities. 


                 iv) $70 million for infrastructure repairs at state parks  
                 through new regional programs at state parks with $10  
                 million in the Central Valley, $10 million on the Central  
                 Coast in Ventura County, $15 million in the East Bay, $10  
                 for the Inland Empire, and $15 million for San Diego. 


                 v) $50 million for direct distribution by the department  
                 to its existing 12 districts to address historic  
                 underinvestment. 


              d) Article 5 contains $50 million for the California Natural  
              Resources Agency for Trails and Waterfront Greenway  
              investments. These funds would be for competitive grants to  
              local agencies, conservancies, tribes, and nonprofit  
              organizations for trails and non-motorized access to parks,  
              waterways, or other natural environments, to encourage  
              health-related commuting. Authorizes 25% of the total for  
              this program to be made available for innovative  
              transportation programs for disadvantaged youth. 


              e) Article 6 contains $50 million for competitive grants for  
              rural recreation and tourism to rural entities eligible for  
              under criteria established in the Roberti, Z-Berg, Harris  
              grants program. 


              f) Article 7 contains $210 million for clean water and  
              coastal programs including urban creeks. Designates  
              unspecified amounts to the following: the Lower American  








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              River Conservancy Program or the American River Parkway  
              Plan; the Santa Ana River program of the Coastal  
              Conservancy; and the Urban Streams Restoration program. The  
              bill specifies that projects serving disadvantaged  
              communities must be given funding priority.


              g) Article 7.5 contains proposed funding for state  
              conservancies, as follows: 


                 i) Baldwin Hills Conservancy, $5 million 


                 ii) California Tahoe Conservancy, $17.5 million 


                 ii) Coachella Conservancy, $10 million 


                 iv) Sacramento-San Joaquin Delta Conservancy, $15 million  



                 v) Salton Sea Authority, $25 million.  These moneys must  
                 be used for capital outlay projects that provide air  
                 quality and habitat benefits that implement Natural  
                 resources Agency projects


                 vi) San Diego River Conservancy, $15 million 


                 vii) San Gabriel and Lower Los Angeles Rivers and  
                 Mountains Conservancy, $25 million 


                 viii) San Joaquin River Conservancy, $10 million 


                 ix) Santa Monica Mountains Conservancy, $25 million 


                 x) Sierra Nevada Conservancy, $22.5 million








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                 xi) State Coastal Conservancy, $80 million of which 40%  
                 of this amount would be allocated to the Bay Area  
                 program. 

                 xii) States legislative intent to increase funding for  
                 this purpose to above $250,000,000.

              (h) Article 8 contains proposed expenditures for climate  
              preparedness and habitat resiliency, as follows: 

                 i) An unspecified amount for climate adaptation and  
                 resiliency projects that improve a community's ability to  
                 adapt to climate change, including projects to improve  
                 and protect coastal and rural economies, agricultural  
                 viability, wildlife corridors or habitat, recreational  
                 opportunities, or drought tolerance and water retention,  
                 as follows: 

                 ii) An unspecified amount to the Wildlife Conservation  
                 Board (WCB) for wildlife corridors and open space, for  
                 climate change adaptation, for species habitat, and for  
                 existing open space corridors and trail linkages of which  
                 an unspecified amount above would go to the  
                 implementation of natural community conservation plans  
                 and $10 million would go to nonprofit wildlife  
                 rehabilitation facilities. 

                 iii) $80 million would go to the Climate Resilience  
                 Account to assist local communities and commercial  
                 fisheries adapt to climate change, address ocean  
                 acidification, sea level rise, or habitat protection  
                 along the Pacific flyway. 

                 iv) $15 million for projects that improve agricultural  
                 and open-space soil health, to improve carbon soil  
                 sequestration, erosion control, water quality, and water  
                 retention.

                 v) $60 million for forest projects to reduce fuel  
                 loading, and to invest in forest management practices  
                 that increase the resilience of forests to wildlife and  
                 climate change. These funds would be administered jointly  








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                 by the Department of Forestry and the Sierra Nevada  
                 Conservancy, with $5 million available to the Tahoe  
                 Conservancy. 

                 vi) An unspecified amount to the Department of Fire and  
                 Forestry for existing urban forestry programs

                 vii) $40 million would be available to the California  
                 Conservation Corps, with half of that available as grants  
                 to local conservation corps, for projects in parks,  
                 forests, and stream and river restoration. 

                 viii) $80 million would be available to the California  
                 Natural Resources Agency for grants to local agencies,  
                 tribes, and others for restoration protection and  
                 acquisition of natural, cultural, and historic sites.  
                 Also eligible are projects to repurpose former fossil  
                 fuel power plants as permanent open space and projects  
                 that enhance natural resource protections in those areas  
                 of the state not within the jurisdiction of a state  
                 conservancy.  A match of 20 percent is required. 

                 ix) An unspecified amount to the Ocean Protection  
                 Council.

                 x) States legislative intent to increase funding for this  
                 purpose to above $340,000,000.

          5) Includes related fiscal provisions regarding sales of bonds  
          and implementation of the Act pursuant to the State General  
          Obligation Bond Law. Establishes a finance committee for the  
          bond composed of the Director of Finance, the Treasurer, and the  
          Controller. 


          6) Requires the Secretary of State to submit the bond act to the  
          voters at the November 2016 statewide general election, and  
          includes related instructions regarding preparing ballot  
          pamphlets and statements. Provides that this act shall take  
          effect upon approval by the voters. 


          7) Includes an urgency clause providing that it is necessary  
          that this bill take effect immediately in order to fund a  








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          California parks, water, climate, and coastal protection and  
          outdoor access for all program at the earliest possible date. 


          Staff  
          Comments:  This bill is a work in progress.  The current version  
          does not include the allocation amounts necessary to analyze  
          fiscal impacts of the bill.
          Staff notes that ballot costs are significantly higher when a  
          supplemental ballot is required.  If this bond measure were  
          placed on the 2018, or subsequent, ballot, costs associated with  
          placing the bond on the ballot would reduce to approximately  
          $500,000. 




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