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June 24, 2014  |  Written by Aaron A. Ferguson

Water Bond Activity Heats Up in the California Legislature

Water Code section 79700 et seq. creates the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, which, if approved by the voters, would authorize the issuance of $11.14 billion in bonds to finance a safe drinking water and water supply reliability program.  Existing law provides for the submission of the bond to the voters at the November 4, 2014, statewide general election.  Recent polling indicates that an $11+ billion dollar bond issue is likely to fail at the ballot box because of the hefty price tag.  Therefore, lawmakers are scrambling to adopt a slightly more modest measure prior to the June 26, 2014 deadline for putting a revised measure on the November ballot.

While there were as many as twelve separate bond bills floating around at one time earlier in the legislative session, only a few remain as likely vehicles from which a revised bond will emerge – Assembly Bill (AB) 1331, AB 2686, Senate Bill (SB) 848, and SB 1250.  The total funding in these proposals currently ranges from $8.2 billion to $10.5 billion.

Each proposal contains considerable funding for water quality, watershed protection, regional water reliability, Delta sustainability, and water storage.  Two of the more significant funding components of the bills are Delta sustainability and water storage.  For example, SB 848, AB 1331, and AB 2686 would fund $1.2–$2.25 billion in Delta projects focused primarily on Delta levee stability and ecosystem restoration.  SB 848 would funnel a portion of its Delta sustainability funding ($900 million) through the Sacramento-San Joaquin Delta Conservancy.

AB 1331, SB 848, and AB 2686 contain funds for water storage.  On storage, these bills contain between $2.5–$3 billion in funding for the “public benefits” associated with storage projects.   Such public benefits include ecosystem improvements, water quality improvements, flood control benefits, emergency response, and recreation.  AB 1331, SB 848, and AB 2686 would appropriate storage funds to the California Water Commission, a state agency that would rank potential storage projects.  Eligible storage projects include:  storage projects identified in the CALFED Record of Decision (e.g., Sites Reservoir), groundwater storage, conjunctive use, and local and regional storage.

The four bills are at various stages in the legislative process.  On June, 23, 2014, SB 848 failed to garner the two-thirds majority vote required to pass out of the Senate, but the author will be allowed to bring the bill back for Senate reconsideration in the coming weeks.  AB 1331 has moved out of the Assembly and sits in the Senate Appropriations Committee.  AB 2686 remains before the Assembly Appropriations Committee, but could soon be considered by the full Assembly.  Ultimately, any bond bill sent to the voters will be a negotiated alternative as the Governor’s office is certain to influence the final shape that any bond bill takes before it heads to his desk for signature.

For more information, contact Aaron Ferguson at aferguson@somachlaw.com.

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