BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 208|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: SB 208
Author: Lara (D), et al.
Amended: 6/1/15
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE: 7-2, 3/24/15
AYES: Pavley, Allen, Hertzberg, Hueso, Jackson, Monning, Wolk
NOES: Stone, Fuller
SENATE ENVIRONMENTAL QUALITY COMMITTEE: 5-0, 4/15/15
AYES: Wieckowski, Hill, Jackson, Leno, Pavley
NO VOTE RECORDED: Gaines, Bates
SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NO VOTE RECORDED: Bates, Nielsen
SUBJECT: Integrated regional water management plans: grants:
advanced payment
SOURCE: Author
DIGEST: This bill allows a project proponent that is awarded a
grant under the Integrated Regional Water Management Planning
(IRWMP) Program, to receive an advance payment of up to 50% of
the grant award provided that specific conditions are met.
ANALYSIS: Existing law provides that the typical reimbursement
process for a bond funded IRWMP project is that the local entity
submits invoices to its regional water management group, who
SB 208
Page 2
then submits the invoices to the Department of Water Resources
(DWR). Upon review of the invoices, DWR then reimburses the
management group who then reimburses the local entity.
This bill:
1)Establishes a process whereby DWR could provide advance
funding of IRWMP grants where the project proponent is a
nonprofit organization or a disadvantaged community, or the
project benefits a disadvantaged community. The process is as
follows:
a) Within 90 days of receiving notice of that it has been
awarded in IRWMP grant, the regional water management group
is required to provide DWR with a list of projects to be
funded by the grant funds where the project proponent is a
nonprofit organization or a disadvantaged community, or the
project benefits a disadvantaged community. The list shall
specify how the projects are consistent with the adopted
integrated regional water management plan and shall include
specific information each project.
b) Within 60 days of receiving the project information from
the regional water management group, DWR will provide
advanced payment of 50 percent of the grant award for those
projects that satisfy both of the following criteria:
i) The project proponent is a nonprofit organization or
a disadvantaged community, or the project benefits a
disadvantaged community.
ii) The grant award for the project is less than $1
million.
c) The recipients are required to place the funds in a
noninterest-bearing account until expended.
SB 208
Page 3
d) The funds are required to be spent within six months of
the date of receipt, unless DWR waives this requirement.
e) The recipient shall, on a quarterly basis, provide an
accountability report to DWR regarding the expenditure and
use of any advanced grant funds that provides, at a
minimum, the following:
i) An itemization of how the advanced payment funds
have been expended.
ii) A project itemization as to how any remaining
advanced payment funds will be expended over time.
iii) Whether the funds are placed in a
noninterest-bearing account, and if so, the date that
occurred and the dates of withdrawals of funds from that
account.
f) If funds are not expended, the unused portion of the
grant shall be returned to DWR within 60 days after project
completion or the end of the grant performance period,
whichever is earlier.
g) DWR may adopt additional requirements for the recipient
regarding the use of advanced payment to ensure that the
funds are used properly.
2)Sunsets the provisions of this bill on January 1, 2025.
Background
Numerous water bonds, including most recently Proposition 1,
provide funding for projects and programs through the IRWMP.
SB 208
Page 4
Typically, the Legislature appropriates bond funds to DWR for a
competitive grant solicitation. DWR then issues guidelines for
a round of IRWMP funding, and regional water management groups
submit their list of local projects. DWR ranks the projects and
makes the awards within each IRWMP funding region.
In many cases, regional water management groups contract with
their local entities to carry out the projects. Depending on
the specific details of the funding agreement and the
administrative processes of the management group, a number of
months may pass between the time the local entity incurs the
expense and the time they receive reimbursement from the
management group.
Comments
Addresses a real problem. The reimbursement process has been a
real problem for some nonprofit organizations. While water
agencies can usually carry the invoice billing as a receivable
for a few months, many nonprofit organizations, which often have
meager reserves, cannot.
What about accountability? One advantage of the current
reimbursement process is that the state can ensure that it does
not pay for any non-eligible expenses. Providing funding in
advance reduces the state's ability to ensure bond funds are
only expended on eligible expenses. The amendments taken in the
Senate Appropriations Committee were designed to increase the
accountability and oversight of the advanced funds.
Why a 10-year sunset? According to the author, "we originally
included a sunset with a longer period of time to allow for a
meaningful evaluation and assessment process to ensure the
advanced payment model is successful and working properly."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SB 208
Page 5
According to the Senate Appropriations Committee:
Unknown potential losses, potentially in the hundreds of
thousands of dollars, of bond/General Fund monies for advanced
funds that are spent on ineligible uses and are unrecoverable.
Unknown costs, but potentially in the tens of thousands of
dollars, from the General Fund for increased administrative
costs to DWR for the administration and oversight of advanced
funds.
SUPPORT: (Verified5/28/15)
Association of California Water Agencies
California Municipal Utilities Association
City of Pasadena
City of San Diego
Clean Water Action
Coachella Valley Water District
Coachella Water Authority
Community Water Center
County Sanitation Districts of Los Angeles County
Desert Water Agency
East Bay Municipal Utility District
Environmental Justice Coalition for Water
Gateway Water Management Authority
Indio Water Authority
Lakeside Water District
Leadership Counsel for Justice and Accountability
Mission Springs Water District
Pueblo Unido Community Development Corporation
Rural Community Assistance Corporation
San Diego County Water Authority
San Jeardo Cooperative, Inc.
The Nature Conservancy
Valley Sanitary District
SB 208
Page 6
OPPOSITION: (Verified5/28/15)
None received
ARGUMENTS IN SUPPORT: According to the San Diego County
Water Authority, "Administration of the state's Integrated
Regional Water Management program (IRWMP), which is funded
through state general obligation bond proceeds, has created
challenges for implementation at the regional level that
threaten the success of regional programs and continued
participation of all interested stakeholders, including smaller
nonprofit organizations, watershed groups, and disadvantaged
communities. Specifically, issues and concerns related to the
IRWMP relate to delayed or untimely processing if IRWMP project
invoice reimbursements, resulting in significantly delayed
reimbursement payment to those smaller nonprofit organizations
and disadvantaged communities that can least afford it. On
occasion, it has taken anywhere from 60 to 330 days to process
regional invoices for payment. This invoice payment delay
disenfranchises smaller nonprofit organizations and
disadvantaged communities, which could become less willing to
meaningfully participate in the IRWMP process due to
reimbursement delays."
"SB 208 would focus on removing these administrative challenges
and allow for the continued meaningful participation of all
regional interests in the IRWMP process. For these reasons, we
strongly support SB 208."
Prepared by:Dennis O'Connor / N.R. & W. / (916) 651-4116
6/1/15 12:58:57
**** END ****
SB 208
Page 7