BILL ANALYSIS Ó
SB 208
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Date of Hearing: June 30, 2015
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
SB
208 (Lara) - As Amended June 1, 2015
SENATE VOTE: 30-5
SUBJECT: Integrated regional water management plans: grants:
advanced payment.
SUMMARY: Allows the Department of Water Resources (DWR), under
specified conditions, to provide advance funding of Integrated
Regional Water Management Plan (IRWMP) grants where the project
proponent is a nonprofit organization or a disadvantaged
community, or the project benefits a disadvantaged community.
Specifically, this bill:
1)Requires a regional water management group (RWMG), within 90
days of receiving notice that it is awarded an IRWMP grant, 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. Requires the list to provide
specific information for each project, including how the
project is consistent with the adopted IRWMP.
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2)Requires DWR, within 60 days of receiving the project
information from the RWMG, to provide advanced payment of 50
percent of the grant award for those projects that satisfy
both of the following criteria:
a) The project proponent is a nonprofit organization or a
disadvantaged community, or the project benefits a
disadvantaged community.
b) The grant award for the project is less than $1 million.
3)Requires that the recipient of the advanced payment place the
funds in a noninterest-bearing account until expended.
4)Mandates that the funds be expended within six months of the
date of receipt, unless DWR waives this requirement.
5)Requires the advanced funding recipient to provide, on a
quarterly basis, an accountability report to DWR regarding the
expenditure and use of any advanced grant funds that provides,
at a minimum, the following:
a) An itemization of how the advanced payment funds were
expended.
b) A project itemization as to how any remaining advanced
payment funds will be expended over time.
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c) 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.
6)Specifies that 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.
7)Allows DWR to adopt additional requirements for the recipient
regarding the use of advanced payment to ensure that the funds
are used properly.
8)Sunsets on January 1, 2025.
EXISTING LAW:
1)Provides $810 million in Chapter 7 of Proposition 1, the Water
Quality, Supply, and Infrastructure Improvement Act of 2014
(Prop. 1), for projects that are included in and implemented
in an adopted IRWM plan.
2)Requires that not less than 10% of Proposition 1 IRWM funds
are allocated to projects that directly benefit disadvantaged
communities.
3)Allocates $510 million of Prop. 1 IRWM funds by hydrologic
region.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
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1)Unknown potential losses, potentially in the hundreds of
thousands of dollars, of bond/General Fund (GF) monies for
advanced funds that are spent on ineligible uses and are
unrecoverable.
2)Unknown costs, but potentially in the tens of thousands of
dollars, from the GF for increased administrative costs to DWR
for the administration and oversight of advanced funds.
COMMENTS: This bill would establish 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,
under specified circumstances.
1)Author's statement: The author states that this bill is
needed as, currently, IRWM funding represents a pay-as-you-go
system where groups with approved plans provide funding for
water projects up front and are reimbursed later. The author
adds that while this mechanism is intended to save state
general funds it instead threatens the success of regional
programs and the continued participation of stakeholders
because smaller communities and nonprofit organizations are
disproportionately impacted when pre-financing a water project
requires a lager budget than these stakeholders are often able
to fund. The author concludes that this bill will improve
equity by advancing grant funds to nonprofit organizations and
disadvantaged communities under limited circumstances.
2)Background: Numerous water bonds, including most recently
Proposition 1, provide funding for projects and programs
through IRWMP grants. Typically, the Legislature appropriates
bond funds to DWR for a competitive grant solicitation. DWR
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then issues guidelines for a round of IRWMP funding, and RWMGs
submit their list of local projects. DWR ranks the projects
and makes the awards within each IRWMP funding region.
In many cases, RWMGs contract with local entities to carry out
projects. The typical reimbursement process is that the local
entity submits invoices to its RWMG, who then submits the
invoices to DWR. Upon review of the invoices, DWR then
reimburses the RWMG who then reimburses the local entity.
Depending on the specific details of the funding agreement and
the administrative processes of the RWMG, 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. It can be a hardship for some nonprofit organizations
or disadvantaged communities to bear the up-front cost of the
project until reimbursed.
3)Prior and related legislation: AB 1874 (Gonzalez) of 2014
would have required DWR to pass IRWMP funding appropriated by
the Legislature directly through to a regional group if that
group was eligible for, and had completed, a streamlined
application process and requested the funding. Like this bill,
AB 1874 was introduced in order to address IRWMP project
reimbursement delays, particularly for nonprofit organizations
and disadvantaged communities. AB 1874 was held in the
Assembly Appropriations Committee.
4)Supporting arguments: Supporters state that "Administration
of the state's [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. Supporters add that IRWMP issues and concerns
relate to delayed or untimely processing of IRWM project
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invoice reimbursements, resulting in significantly delayed
reimbursement payment to those smaller nonprofit organizations
and disadvantaged communities that can least afford it.
Supporters advise that, on occasion, it has taken anywhere
from 60 to 330 days to process regional invoices for payment
and that such delays disenfranchise "smaller nonprofit
organizations and disadvantaged communities, which could
become less willing to meaningfully participate in the IRWM
process." Supporters maintain that they strongly support this
bill because it "would focus on removing these administrative
challenges and allow for the continued meaningful
participation of all regional interests in the IRWM process."
5)Opposing arguments: None on file.
REGISTERED SUPPORT / OPPOSITION:
Support
San Diego Water Authority (sponsor)
California Municipal Utilities Association
Central Basin Municipal Water District
City of Pasadena
City of San Diego
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Support - continued
City of Signal Hill
Clean Water Action
Coachella Valley Regional Water Management Group
Coachella Valley Water District
Community Water Center
Council for Watershed Health
County Sanitation District of Los Angeles
Desert Water Agency
East Bay Municipal Utility District
Environmental Justice Coalition for Water
Lakeside Water District
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Leadership Counsel for Justice and Accountability
Los Angeles County Board of Supervisors
Pueblo Unido Community Development Corporation
Roots of Change
Rural Community Assistance Corporation
Rural County Representatives of California
San Jerardo Cooperative
Sierra Club California
The Nature Conservancy
Valley Ag Water Coalition
Valley Center Municipal Water District of San Diego County
Opposition
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None on file
Analysis Prepared by:Tina Leahy / W., P., & W. / (916)
319-2096