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 ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 1, 2016 |Policy Vote: N.R. & W. 6 - 2, | | | GOV. & F. 4 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: Yes |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Narisha Bonakdar | | | | ----------------------------------------------------------------- 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 AB 2444 (Eduardo Garcia) Page 1 of ? 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 AB 2444 (Eduardo Garcia) Page 2 of ? 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. AB 2444 (Eduardo Garcia) Page 3 of ? 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]. AB 2444 (Eduardo Garcia) Page 4 of ? 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 AB 2444 (Eduardo Garcia) Page 5 of ? 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 AB 2444 (Eduardo Garcia) Page 6 of ? 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 AB 2444 (Eduardo Garcia) Page 7 of ? 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 AB 2444 (Eduardo Garcia) Page 8 of ? 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 AB 2444 (Eduardo Garcia) Page 9 of ? 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. -- END --