BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
153 (Hernandez)
Hearing Date: 08/27/2010 Amended: 08/12/2010
As proposed to be amended
Consultant: Brendan McCarthy Policy Vote: NR&W 6-1
AB 153 (Hernandez), Page 2
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BILL SUMMARY: AB 153, an urgency measure, changes the criteria
for spending $100 million from a proposed water bond.
Specifically, the bill expands the allowed uses of bond funds
for groundwater cleanup to include non-construction costs.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Cost pressure on bond funds Likely in the millions Bond *
* Proposed water bond.
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Current law (SB x7 2, Cogdill, Chapter 3, Statutes of 2009)
authorizes an $11 billion general obligation bond to be placed
on the general election ballot in November 2010. The bond
measure authorizes expenditures for a variety of water-related
purposes. (AB 1265, Caballero, Chapter 126, Statutes of 2010
delays the vote on this proposed bond measure until 2012.)
Funds authorized under the proposed bond measure include $455
million for drought relief, $1.05 billion for water supply
reliability, $2.25 billion for Delta sustainability, $3.00
billion for the statewide water supply system, $1.79 billion for
conservation and watershed protection, $1.00 billion for
groundwater protection, and $1.25 billion for water recycling.
Of the $1.00 billion for groundwater protection, Section 79770
(d) provides not less than $100 million for groundwater cleanup
projects that meet certain criteria. (It appears that the only
projects that currently meet the criteria for these funds are
projects to remediate groundwater contamination in the San
Gabriel Valley associated with several superfund sites in that
area.)
AB 153 amends the proposed water bond, to expand the eligible
uses of the $100 million allocated under Section 79770 (d) so
that funds would be available for "costs associated with
projects, programs, or activities" rather than being limited to
AB 153 (Hernandez), Page 2
project costs. The intent of the bill is to allow bond funds to
be used for ongoing treatment and remediation costs, rather than
just the costs to construct capital projects.
Under the state's General Obligation Bond Law, bond funds are
generally limited to paying for capital costs or other projects
with long-term benefits. However, because general obligation
bond measures are approved by a vote of the people, a bond
measure itself may override those statutory requirements.
Previous bond measures have, in fact, allowed bond funds to be
used for ongoing program costs.
According to the sponsors of the bill, total funding to date for
groundwater cleanup projects has been about $620 million, with
the bulk of the funding coming from parties responsible for the
groundwater contamination and federal funds. The state has
contributed about $9.6 million.
The sponsors of the bill indicate that remaining cleanup costs
total about $710 million. Of the remaining costs, $64 million is
for capital projects and $650 million is for ongoing treatment
costs.
By amending the proposed water bond to allow non-capital costs
to be funded, the bill creates cost pressures on the proposed
bond funds. By expanding the allowed uses to non-capital costs,
the bill may reduce the availability of funds for other capital
projects. The extent of this impact will depend on the
allocation of funding for non-capital costs and whether there
are other eligible capital projects for those bond funds.
This bill is an urgency measure.
AB 1265 (Caballero, Chapter 126, Statutes of 2010) delayed the
vote on the proposed bond measure until 2012.
The proposed author's amendments would make technical changes to
the bill and add coauthors.