BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 1086 (de León) - The Safe Neighborhood Parks, Rivers, and
Coastal Protection Bond Act of 2014.
Amended: As introduced Policy Vote: NR&W 7-1, Gov&Fin
5-2
Urgency: No Mandate: No
Hearing Date: May 23, 2014 Consultant: Marie Liu
SUSPENSE FILE. AS AMENDED.
Bill Summary: SB 1086 would enact the "Safe Neighborhood Parks,
Rivers, and Coastal Protection Bond Act of 2014," which
authorizes the sale of an unspecified amount of bonds for parks,
state conservancies, coastal and ocean programs, urban forestry,
river parkways and urban rivers, and other resource protection
and restoration efforts.
Fiscal Impact (as approved on May 23, 2014): Unknown, but
presumably in the millions of dollars annually from the General
Fund for debt service.
Proposed Law: This bill would enact the "Safe Neighborhood
Parks, Rivers, and Coastal Protection Bond Act of 2014," which
authorizes the sale of an unspecified amount of bonds for the
following purposes:
Parks
o Local assistance grants for park-underserved areas;
o Grants for local parks to local governments on a per
capita basis;
o Grants to regional parks, including state parks
whose operation and management have been taken over by
local or regional agencies, and parks that are managed by
a joint powers authority that includes state and local
agencies; and
o Restoring and preserving existing state park units.
Rivers, Lakes, and Streams
o Protection of the Los Angeles River parkway;
o River Parkway Program;
o Protection of water quality, fish and wildlife, and
other resources;
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o Protection and restoration of watersheds through the
Department of Conservation; and
o Establishment or enhancement of flood corridors
through the Department of Water Resources.
Coast and Ocean Protection
o State Coastal Conservancy;
o Ocean Protection Council; and
o Restoration of wetlands in the San Francisco Bay.
Forests and Working Lands
o Sierra Nevada Conservancy;
o Protection of forests, rangelands, and wildlife
protection; and
o Protection of working lands through the Department
of Conservation.
Regional Conservation Priorities
o State Conservancies
Youth Employment in Conservation
o California Conservation Corps, local conservation
corps, and other organizations that provide youth
employment opportunities in conservation projects.
Urban Forestry and Sustainable Communities
o Urban forestry, urban greening, and greenprint
projects to support sustainable communities strategies.
Staff Comments:
Bond indebtedness: This bond includes a number of blanks,
including the total amount of the bond as well as distribution
among the different categories. Until these amounts are
specified, the fiscal impact of this bill is unknown. However,
presumably this bond, consistent with recent resource bonds,
will be in the low billions of dollars. Staff notes for
reference, that assuming an interest rate of 5% and the issuance
of 30-year bonds, for each billion dollars of bonds issued,
annual debt service would be approximately $65 million.
Unfunded administrative costs for the Natural Resources Agency:
Generally, administrative costs related to bond-funded programs
are for general administrative purposes, such as accounting and
processing grant applications. This bond requires the Natural
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Resources Agency (agency) to develop and adopt a statewide
resource protection plan to identify priorities for expending of
funds provided by this bond. Staff notes that this bond does not
specify funding for the agency for this planning activity and it
is unclear whether the costs of this planning could be
considered an administrative cost to the bond. However, if bond
dollars is used for this planning purpose, it will reduce the
amount of bond funds available for projects.
The bill would also require that conservation plans that are
developed and adopted by departments and conservancies must be
consistent with the agency's plan. The bond itself does not
require conservancies or departments to develop conservation
plans; however, in the past, the Legislature has required the
conservancies to develop such plans to guide their spending of
bond monies. Staff notes that, as noted by the Natural Resources
and Water Committee, a similar provision has been deleted in a
proposed water bond in recognition of the regional priorities
that are identified by the conservancies that are currently not
overseen by the agency.
Do the benefits of the project last the length of the bond?
Existing law (§16727 of the Government Code) essentially
provides that general obligation bonds, such as the one in this
bill, are to be used for capital purposes. This provision aims
to ensure that the benefits of a project at least roughly match
the period during which the bond must be repaid. Bonds are best
used for large, discrete capital projects that would ordinarily
not be able to be supported by ongoing funding mechanisms and
that meet a need over several decades. Using bond funds to pay
for operations and maintenance or for short-lived projects in
essence dramatically increases the cost of that project compared
to using non-bond funds.
The useful life of resource investments are often more difficult
to project compared to other infrastructure projects (for
example, projecting the useful life of highway bridge is easier
than projecting the useful life of an urban forestry project).
While recognizing this difficulty, staff notes that there are
several provisions of this bill that merit consideration on
whether the useful life of the expenditure is an appropriate for
the use of bond funds, including:
The Ocean Protection Council- The bill does not specify
whether the bond funds are restricted to project money or for
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a specific purpose. This council has received monies from
Proposition 84.
"Habitat credit exchanges" - This bill would require that
these exchanges, which have no existing guiding state
statutes, aim to create measurable improvements habitat. Staff
notes that there are no requirements for the improvements to
be lasting.
Greenprint projects - This bill loosely defines a
"greenprint." This bill is unclear whether the bond monies
would be used to create greenprints, which have no existing
guiding state statutes, or projects to implement a greenprint.
Watershed protection and restoration funds through the
Department of Conservation - The Department of Conservation's
programs for watershed and restoration from past bonds have
been mostly, if not exclusively, for planning and staffing,
both of which are non-capital costs.
To some extent, ensuring that spending is limited to capital
outlay will be done in the Legislature's appropriation of these
funds. However, additional specificity could be added to this
bill to aid this process.
Author Amendments: Specifies that the bond is to appear on the
November 2014 ballot and makes the bill an urgency measure.