BILL ANALYSIS Ó
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1292|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 1292
Author: Roger Hernández (D), et al.
Amended: 7/12/11 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 7/6/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
SENATE APPROPRIATIONS COMMITTEE : 9-0, 8/22/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
ASSEMBLY FLOOR : 78-0, 6/2/11 - See last page for vote
SUBJECT : Safe Drinking Water State Revolving Fund:
revenue bonds
SOURCE : California Department of Public Health
DIGEST : This bill authorizes the Department of Public
Health to sell revenue bonds to assist drinking water
systems in meeting their federal Safe Drinking Water State
Revolving Fund matching fund requirements.
ANALYSIS :
Existing law :
1. Creates the California Infrastructure and Economic
CONTINUED
AB 1292
Page
2
Development Bank (I-Bank) within the Business,
Transportation and Housing Agency, to promote economic
revitalization, enable future development, and encourage
a health climate for jobs in California. Authorize the
I-Bank to issue tax-exempt and taxable revenue bonds to
underwrite the costs of infrastructure development that
meets certain public purposes.
2. Establishes the Safe Drinking Water State Revolving Fund
(SDWSRF) and continuously appropriates the funds to the
Department of Public Health (DPH) to provide grants or
revolving fund loans for the design and construction of
projects for the public water systems that will enable
suppliers to meet safe drinking water standards.
3. Authorizes DPH to sell revenue bonds to assist drinking
water systems in meeting their federal SDWSRF matching
fund requirements.
This bill:
1. Authorizes DPH to contract with the I-Bank to issue
taxable or tax-exempt revenue bonds for use as the 20
percent state match for federal grant funds.
2. Authorizes bond proceeds to be deposited into the
SDWSRF or to refund bonds previously issued, and to fund
necessary reserves, capitalized interest, or issuance
costs.
3. Requires revenue bonds to be repaid from, and secured
by, revenues in the SDWSRF, including loan repayments
and interest earned on loans.
4. Requires biennial DPH reports on SDWSRF activities
submitted after January 1, 2013 to include: (a) results
of a federal survey of California's public water
infrastructure needs; (b) amount of funds available in
the fund to finance those needs; (c) amount of all
funding agreements executed since the last report; (d)
the fund utilization rate; (e) amount of unliquidated
obligations; and (f) the total dollar amount paid to
funding recipients since the last report.
CONTINUED
AB 1292
Page
3
Comments
This bill allows the DPH to partner with the Infrastructure
Bank to sell bonds and use the resulting revenues to meet
federal match requirements under the SDWSRF program.
Federal estimates from 2007 suggest that California has $39
billion in unmet water infrastructure needs. In prior
years, DPH used State General Funds and other bond funds to
meet the state's match requirements. This bill enables DPH
to partner with the Infrastructure Bank to issue revenue
bonds and ensure that California can maximize access to
federal funding to meet its drinking water needs without
putting additional demands on the State General Fund or
other bond funds.
Related legislation
AB 696 (Hueso) directs the I-Bank to establish a
methodology for determining the economic benefits of
projects under consideration and, as of January 1, 2013,
restricts the I-Bank to approve only those projects that
provide economic benefits and meet land use criteria.
AB 700 (Blumenfield) requires the I-Bank to adopt two-year
goals and measurable objectives, consistent with state
infrastructure, economic development and environmental
plans and authorizes the I-Bank to pursue streamlined
administrative functions.
AB 893 (V. Manuel Pérez) directs the I-Bank to enhance
outreach and technical assistance to small and rural
communities to obtain financing for infrastructure
projects.
AB 1094 (John A. Pérez) adds two legislative members to the
I-Bank's board of directors.
AB 1292 is modeled after AB 1571 (Costa), Chapter 1078,
Statutes of2000, authorizes the Infrastructure Bank to
issues bonds and deposit proceeds into the State Water
Pollution Control Revolving Fund Program in support of
local projects under the Clean Water Act.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
CONTINUED
AB 1292
Page
4
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12
2012-13 2013-14 Fund
Financial services contract $55 $110
$110 Special*
Enhanced reporting absorbable costs to include
additional Special*
information on future biennial
reports
* Safe Drinking Water State Revolving Fund, Administration
Account
SUPPORT : (Verified 8/23/11)
California Department of Public Health (source)
Association of California Water Agencies
California Association of Environmental Health
Administrators
California Association of Professional Scientists
California Conference of Directors of Environmental Health
California Water Association
East Bay Municipal Utility District
San Gabriel Valley Municipal Water District
Three Valleys Municipal Water District
Upper San Gabriel Valley Municipal Water District
Valley County Water District
Water Replenishment District of Southern California
ASSEMBLY FLOOR :
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Harkey, Hayashi, Roger Hernández,
CONTINUED
AB 1292
Page
5
Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight,
Lara, Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza,
Miller, Mitchell, Monning, Morrell, Nestande, Nielsen,
Norby, Olsen, Pan, Perea, V. Manuel Pérez, Portantino,
Silva, Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Gorell, Hall
AGB:do 8/23/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED