BILL ANALYSIS �
AB 2043
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Date of Hearing: April 29, 2014
ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
Anthony Rendon, Chair
AB 2043 (Bigelow) - As Introduced: February 20, 2014
SUBJECT : Water bond: storage
SUMMARY : Repeals the $11.14 billion bond for water-related
projects and programs that was drafted in 2009 (2009 Water Bond)
with a revised $7.935 billion water bond. Specifically, this
bill :
1)Repeals the 2009 Water Bond, which is currently on the ballot
for November 4, 2014.
2)Divides the $7.935 billion bond by chapters for the following
funding purposes (in billions):
$ 0.395 Chapter 5 drought relief
$ 1.290 Chapter 6 regional water supply reliability
$ 1.500 Chapter 7 Delta sustainability
$ 3.000 Chapter 8 water storage, continuously appropriated
$ 0.800 Chapter 9 water quality, including groundwater
remediation
$ 1.050 Chapter 10water recycling and water conservation
3)Retains the administrative and other provisions from the 2009
Water Bond that relate to storage including, but not limited
to:
a) Continuously appropriating water storage funding to the
California Water Commission (CWC), a governor-appointed
body, and requiring the CWC to select projects through a
competitive public process;
b) Empowering the CWC to fund the public benefits of
storage projects related to ecosystem and water quality
improvements, flood control, emergency response, and
recreation; and,
c) Prohibiting expending bond funds on environmental
mitigation, except environmental mitigation associated with
providing public benefits.
EXISTING LAW :
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1)Enacts the 2009 Water Bond which, if approved by the voters on
November 4, 2014, authorizes $11.14 billion in general
obligation bonds for the following purposes:
$ 0.455 Chapter 5drought relief
$ 1.400 Chapter 6regional water supply reliability
$ 2.250 Chapter 7Delta sustainability
$ 3.000 Chapter 8water storage
$ 1.785 Chapter 9conservation and watershed
protection
$ 1.000 Chapter 10water quality and groundwater
protection
$ 1.250 Chapter 11 water recycling
$11.140 TOTAL
2)Creates a nine-member CWC within the Department of Water
Resources with each member appointed by the Governor, subject
to confirmation by the Senate, and serving four-year staggered
terms.
3)Terminates 7 of the 9 CWC members' terms on May 14, 2014.
4)Continuously appropriates $3 billion to the CWC, under Chapter
8 of the 2012 Water Bond, to fund what it determines are the
public benefits of water storage projects selected by the CWC
and which improve the Sacramento-San Joaquin Delta ecosystem
or tributaries to the Delta.
FISCAL EFFECT : Unknown
COMMENTS : For a full history on the 2009 Water Bond that has
been carried over and, unless repealed or moved, is currently
slated for the November 2014 general election, please see this
Committee's April 29, 2013 analysis of AB 1331 (Rendon).
There are currently nine substantive water bond proposals in the
Legislature and the differences between and among them and the
bond currently on the ballot range from subtle to significant.
But there are some key issue areas in common. All of the
current bond proposals in the Legislature would make surface
storage projects eligible for some level of funding for the
"public benefits" of those projects. They differ in whether
that funding would be continuously appropriated to the CWC or
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whether the Legislature would appropriate the money to the CWC.
Most would also provide funding for groundwater storage and
water quality improvements, including groundwater remediation.
Many would provide funding to address sustainability of the
Sacramento-San Joaquin Delta (Delta) and to implement Integrated
Regional Water Management (IRWM) Plan projects and programs.
Some would also provide separate chapters of funding for
watershed protection projects, water recycling and conservation,
and groundwater sustainability.
This bill is a $7.953 billion proposal modeled on the 2009 bond
that funds water storage at $3 billion, eliminates $1.785
billion for conservation and watershed protection, and reduces
the various other chapters of the 2009 bond by anywhere from
15-33%.
Bond dollars represent tradeoffs
General obligation bonds (G.O. bonds) are secured on the full
faith and credit of the State of California. A bond act
represents authority for the State to go into the marketplace
and sell bonds, which are in essence a loan between the State
and the bond holder which must be repaid from the State general
fund with interest. The Public Policy Institute of California in
its March 2014 report, Paying for Water in California, estimates
that the current debt service on water-related G.O. bonds is
around $700 million per year and "approaching the level of
recent bond spending." The Legislative Analyst's Office, in a
February 26, 2013 Overview of State Infrastructure Bonds
concluded that the State's average annual cost for paying off
the $11.14 water bond currently on the ballot would be an
additional $565 million per year of general fund debt service
over the 40-year repayment period.
Currently, over 90% of general fund dollars are spent on K-16
education, health and human services, and corrections programs.
In addition, most of the taxes the State collects and spends are
transferred to local governments. This "local assistance" is
used to pay for schools and for state health and welfare
programs (such as CalWORKS, In-Home Supportive Services, and
Medi-Cal) that are administered at the local level.
Support for a Water Bond on the rise, critical funding gaps
identified
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However, an April 17, 2014 release of a public poll by the
non-partisan Public Policy Institute of California (PPIC)
advises that support for a water bond is on the rise but the
greatest support is for a slimmed down version of a bond. The
PPIC notes that "Californians today are also more likely than
they were a year ago to favor an $11.1 billion bond for state
water projects. As the legislature continues to discuss the
measure - now on the November ballot - 60 percent of adults (up
16% from last year) and 50 percent of likely voters (up 8% from
last year) say they would vote yes. Today, when those who oppose
the bond are asked how they would vote if the amount were lower,
support rises (69% adults, 59% likely voters). A slim majority
of adults (52%) and 44 percent of likely voters say it is very
important that voters pass the bond."
In a separate report the PPIC found that state faces critical
funding gaps in five key areas of water management. These areas
include safe drinking water in small, disadvantaged communities;
flood protection; management of stormwater and other polluted
runoff; aquatic ecosystem management; and integrated water
management.
Other bond proposals currently in the Legislature
To date, AB 1331 (Rendon) has been the primary Assembly water
bond vehicle and subject to multiple Capitol hearings and nine
field hearings in various parts of the State. AB 1331, the
Clean, Safe and Reliable Drinking Water Act of 2014, repeals the
existing bond and places an $8 billion measure on the November
4, 2014 ballot. AB 1331 includes $1 billion for water quality;
$1.5 billion for protecting rivers and watersheds; $2 billion
for IRWM; $1 billion for Delta sustainability; and, $2.5 billion
for storage projects, which Senate amendments made subject to
appropriation by the Legislature. AB 1331 is currently in the
Senate Environmental Quality Committee.
Currently, the primary Senate water bond vehicle is SB 848, the
Safe Drinking Water, Water Quality, and Water Supply Act of
2014. SB 848 repeals the existing bond and placed a $6.825
billion measure on the November 2014 ballot. SB 848 includes
$900 million for water quality; $2 billion for IRWM; $1.2
billion for Delta sustainability; $1.7 billion for watershed and
ecosystem improvements; $1.025 billion for water storage,
subject to appropriation by the Legislature.
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In addition to this bill, AB 1331, and SB 848, there are six
other substantive water bond proposals: AB 1445 (Logue) is a
$5.8 billion proposal that dedicates $4.8 billion to water
storage projects and $1 billion to water quality. AB 2686
(Perea) is a bond of at least $9.25 billion that includes
placeholders for additional sums for water recycling and
groundwater sustainability. AB 2686 was initially modeled on AB
1331 but included $2.25 billion for Delta sustainability and $3
billion for water storage (i.e. the same levels for those
chapters as found in the 2009 Water Bond). AB 2554 (Rendon) is
a $8.5 billion bond measure that contains the same language as
AB 1331, also by Rendon, prior to its April 8, 2014 amendments
in the Senate Natural Resources and Water Committee, except that
AB 2554 increases the water storage chapter to $3 billion,
continuously appropriated.
In the Senate, SB 927 (Canella) reduces the 2009 Water Bond to
$9.217 by eliminating the entire $1.785 billion chapter for
conservation and watershed protection and deleting several other
specific allocations in other chapters. SB 1250 (Hueso) is a
$9.45 billion proposal that, in addition to including funding
for Delta sustainability and water storage at the levels found
in the 2009 includes $500 million for groundwater sustainability
and $500 million for water recycling. SB 1370 (Galgiani) is a
$6.26 billion general obligation bond for the exclusive purpose
of funding four surface storage projects: Sites Reservoir in the
Sacramento Valley; Temperance Flat Reservoir in the San Joaquin
Valley; an expansion of San Luis Reservoir, jointly owned by the
CVP and SWP; and, raising Shasta Dam which, as it would affect
the free-flowing condition of the McCloud River, is an action
that State law currently prohibits any State agency from
funding.
Major Issues with Differing Approaches in the Bond Proposals
All of the water bonds vary in terms of the amounts of overall
bond funding being proposed and range from $5.8 billion to $9.45
billion. It is likely that any successful bond proposal will
need to maintain a broad appeal with respect to the core issues
being funded while minimizing areas of contention that could
fuel opposition. Besides the overall size of any bond, two major
policy areas are: 1) the level of funding that will be directed
towards water storage and whether it should be continuously
appropriated; and, 2) the level of funding that should be
applied to Delta sustainability and how any Delta funding
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relates, or does not relate, to the Bay Delta Conservation Plan
(BDCP) process.
Water Storage and Continuous Appropriation
With California currently experiencing a continuing drought,
many stakeholders have identified increased water storage as a
key strategy to combatting future water uncertainties. Under
some of the proposals both surface water and groundwater storage
projects would be eligible for funding. However, new water
storage projects can be very costly, particularly surface
storage projects. This has caused proponents of those projects
to seek to have money for storage continuously appropriated to
the CWC.
A continuous appropriation means bond funds are not subject to
the Legislative budget process and go directly to the entity
identified to receive them. Proponents of continuous
appropriation for storage state this is necessary in order to
provide a level of certainty commensurate with the likely high
level of local investment. However, opponents of large
allocations to surface storage feel those allocations could come
at the expense of investments in water quality and local water
supply reliability, such as increased water use efficiency and
water recycling. Opponents of continuous appropriations also
maintain that the Legislature's role in the budget is an
appropriate check on the Administration and by extension the
CWC, who are all gubernatorial appointees.
This bill allocates $3 billion to both surface water and
groundwater projects and continuously appropriates that funding
to the CWC. $3 billion continuously appropriated is identical to
the approach taken in the 2009 Water Bond.
BDCP and Delta Sustainability
The BDCP is a joint effort by the Administration and several
water agencies that receive export water supplies from the State
Water Project (SWP) and Federal Central Valley Project (CVP) to
obtain 50-year endangered species act permits for SWP/CVP Delta
facilities through a state Natural Community Conservation Plan
and Federal Habitat Conservation Plan. The supporters of the
BDCP state it will restore the Sacramento-San Joaquin Delta
ecosystem and secure California water supplies. They are
proposing new infrastructure in the Delta including three new
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water intakes on the Sacramento River and two 40' diameter water
conveyance tunnels 30 miles long as well as over 150,000 aces of
habitat restoration and "other stressors" actions (such as
reducing non-native invasive species). Currently, the draft
documents identify the water agencies that would benefit from
new export infrastructure as the funders for the new intakes and
tunnels. The documents do not identify any specific approved
funding for the majority of the rest of the plan including
habitat restoration, oversight, monitoring, and scientific
research but anticipate some level of bond funding.
Many organizations and entities located within the Delta oppose
the BDCP because they believe it will decrease water supply and
water quality in the Delta, disrupt their communities, and
impact economic sustainability by removing agricultural land
from production. However, many of those same entities
acknowledge some level of investment is needed in Delta economic
and environmental sustainability, including habitat improvement
and conservation projects. For those groups the size of any
bond funding for Delta sustainability and the identification of
who will ultimately control the allocation of those funds is an
issue. Delta groups and some environmental groups have also
opposed the use of public bond money for water purchases that
would directly benefit water exporters. A similar program was
previously implemented under a provision of the now defunct
CALFED Bay-Delta Program that was called the Environmental Water
Account (EWA).
This bill would allocate $1.5 billion for grants and direct
expenditures in the Delta to "advance the policy objectives"
captured in the Sacramento-San Joaquin Delta Reform Act. These
include, but are not limited to, protecting the Delta as an
evolving place, restoring the Delta ecosystem, improving the
water conveyance system, expanding storage, and making
investments in flood protection. This bill makes funds
available for appropriation to DWR, the Department of Fish and
Wildlife, the Sacramento-San Joaquin Delta Conservancy for
implementation consistent with the Delta Plan being implemented
by the Delta Stewardship Council.
Supporting arguments : The author states that the 2009 water
bond has been "criticized for earmarks, which brought the grand
total of the bond higher than some believe, is necessary." The
author advises that this bill "is an attempt to keep policy
language from the previous bond intact while lowering the grand
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total of the general obligation bonds." The author states that
this bond will "fund projects to improve California's water
infrastructure, specifically to provide competitive funding for
critical water storage, groundwater, Delta restoration, water
quality, and drought relief projects statewide."
Opposing arguments : Opponents state that this bond provides
substantially more funding for storage projects than for water
use efficiency, water recycling, and other integrated water
management projects." Opponents note it contains "no funding
for watershed restoration, except for projects in the Bay-Delta
and includes several problematic environmental provisions (such
as allowing the bond to be used to pay for mitigation of new
delta conveyance)." Other opponents state that they are
concerned that this bill and others do not make balanced
investments, disproportionately fund storage projects over local
water supply, and allowing continuous appropriations in the
storage part which "sets up potential conflicts with other
needed bond investments."
REGISTERED SUPPORT / OPPOSITION :
Support
San Diego County Water Authority (if amended)
Opposition
Clean Water Action
Planning and Conservation League
Sierra Club
Analysis Prepared by : Tina Cannon Leahy / W., P. & W. / (916)
319-2096