BILL ANALYSIS Ó
SB 208
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SENATE THIRD READING
SB
208 (Lara)
As Amended June 1, 2015
Majority vote
SENATE VOTE: 31-5
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Water |15-0 |Levine, Bigelow, | |
| | |Dababneh, Dahle, | |
| | |Dodd, Beth Gaines, | |
| | |Cristina Garcia, | |
| | |Gomez, Harper, Lopez, | |
| | |Mathis, Medina, | |
| | |Rendon, Salas, | |
| | |Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bloom, Bonta, | |
| | |Calderon, Chang, | |
| | |Nazarian, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, | |
| | |Jones, Quirk, Rendon, | |
SB 208
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| | |Wagner, Weber, Wood | |
| | | | |
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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.
2)Requires DWR, within 60 days of receiving the project
information from the RWMG, to provide advanced payment of 50%
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.
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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.
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.
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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 Assembly Appropriations
Committee:
1)Unknown potential losses, potentially in the hundreds of
thousands of dollars (bond/General Fund) for misspent advanced
funds that are unrecoverable.
2)Absorbable costs for DWR to update guidelines and administer
the program.
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.
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 then issues guidelines for
a round of IRWMP funding, and RWMGs submit their list of local
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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.
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.
Other 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
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communities. Supporters advise that, on occasion, it has taken
anywhere from 60 days 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 this bill will remove
administrative challenges and allow for the continued meaningful
participation of all regional interests in the IRWM process.
There is no known opposition to this bill.
Prior legislative efforts have also attempted to address IRWMP
funding reimbursement delays, particularly for nonprofit
organizations and disadvantaged communities. 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. AB
1874 was held in the Assembly Appropriations Committee.
Analysis Prepared by:
Tina Leahy / W., P., & W. / (916) 319-2096 FN:
0001675
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