BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de Le�n, Chair


          AB 1434 (Yamada) - Low-Income Water Rate Assistance Program.
          
          Amended: May 23, 2014           Policy Vote: EU&C 8-2
          Urgency: No                     Mandate: No
          Hearing Date: August 4, 2014                      Consultant:  
          Marie Liu     
          
          This bill meets the criteria for referral to the Suspense File.
          
          
          Bill Summary: AB 1434 would require the Department of Community  
          Services and Development (CSD), in collaboration with the Board  
          of Equalization (BOE), by January 1, 2016, to develop a plan for  
          the funding and implementation of a program to provide funding  
          assistance for water service to households with less than 200  
          percent of the federal poverty guideline level.

          Fiscal Impact: 
              One-time costs of approximately $325,000 to the General  
              Fund over two years to CSD for the development of  
              feasibility plan. 
              Cost pressures, possibly in the millions of dollars, to the  
              General Fund or unknown special fund for the implementation  
              of the feasibility plan.

          Background: Existing law requires the California Public  
          Utilities Commission (CPUC) to establish the California  
          Alternative Rates for Energy (CARE) program to discount rates  
          for gas and electric customers that have incomes less than 200  
          percent of the federal poverty level. The CPUC is also required  
          to consider a program of rate relief for low income customers of  
          water corporations (PUC �739.8).

          Proposed Law: This bill would require CSD to develop a plan for  
          the funding and implementation of the Low-Income Water Rate  
          Assistance Program, which would provide support for households  
          with income that is less than 200 percent of the federal poverty  
          guideline level.

          CSD would be required to collaborate with the BOE and relevant  
          stakeholders. 









          AB 1434  (Yamada)
          Page 1


          By January 1, 2016, CSD would be required to report to the  
          Legislature on its findings regarding the feasibility and  
          desired structure of the program.

          Staff Comments: To develop the required plan, CSD would incur  
          costs of $215,000 in FY 2014-15 and $110,000 in FY 2015-16 for  
          increased staff workload and consulting costs.

          The BOE is likely to have minor and absorbable costs to  
          participate in the development of the plan assuming it will only  
          be providing technical assistance to the effort. The BOE notes  
          that it has expertise in tax collection and administration and  
          does not have a knowledge base on low-income funding assistance.  


          This bill would also result in cost pressures for the  
          implementation of the plan. The amount of the cost pressure or  
          source of funding are unknown as it will depend on the design  
          and structure of the recommended program. However, based on the  
          size of the CARE program, the Low-income Water Rate Assistance  
          Program could easily be in the millions of dollars. The cost  
          pressures would also include costs to administer such a rate  
          assistance program.