California Senate Bill SB1370 Amended / Bill

 BILL NUMBER: SB 1370AMENDED BILL TEXT AMENDED IN SENATE MARCH 24, 2014 INTRODUCED BY Senator Galgiani FEBRUARY 21, 2014 An act to repeal and add Division 26.7 (commencing with Section 79700) of the Water Code, and to repeal Section 2 of Chapter 3 of the Seventh Extraordinary Session of the Statutes of 2009, relating to a surface water storage program, by providing the funds necessary therefor through an election for the issuance and sale of bonds of the State of California and for the handling and disposition of those funds, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 1370, as amended, Galgiani. Reliable Water Supply Bond Act of 2014. (1) Existing law creates the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, which, if approved by the voters, would authorize the issuance of bonds in the amount of $11,140,000,000 pursuant to the State General Obligation Bond Law to finance a safe drinking water and water supply reliability program. Existing law provides for the submission of the bond act to the voters at the November 4, 2014, statewide general election. This bill would repeal these provisions. (2) Under existing law, various measures have been approved by the voters to provide funds for water supply programs. This bill would enact the Reliable Water Supply Bond Act of 2014, which, if adopted by the voters, would authorize the issuance of bonds in the amount of  $5,100,000,000   $6,260,000,000  pursuant to the State General Obligation Bond Law to finance surface water storage projects. The bill would provide for the submission of the bond act to the voters at the November 4, 2014, statewide general election. (3) This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Division 26.7 (commencing with Section 79700) of the Water Code, as added by Section 1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes of 2009, is repealed. SEC. 2. Division 26.7 (commencing with Section 79700) is added to the Water Code, to read: DIVISION 26.7. RELIABLE WATER SUPPLY BOND ACT OF 2014 CHAPTER 1. SHORT TITLE 79700. This division shall be known and may be cited as the Reliable Water Supply Bond Act of 2014. CHAPTER 2. FINDINGS 79701. The Legislature finds and declares all of the following: (a) The snowpack's statewide water content is at about 20 percent of average for this time of year, which is a mere 7 percent of the average April 1 measurement when the snowpack normally is at its peak before melting into streams and reservoirs to provide one-third of the water used by California's cities and farms. (b)  In  2013  , California  had the lowest rainfall amounts on record in many areas. (c) The Department of Water Resources estimates it will be able to deliver only 5 percent of the slightly more than 4 million acre-feet of State Water Project water requested for the  2014  calendar year  2014  by the 29 public agencies that collectively supply water to more than 25 million Californians and nearly  a   one  million acres of irrigated farmland. (d) The irrigation-dependent San Joaquin Valley farms and some other areas will be hard hit if we have another dry year without the reservoir storage. (e) Many farmers are feeling the effects of the drought, and are forced to irrigate orchards during a time of year that water is not usually required. CHAPTER 3. RELIABLE WATER SUPPLY BOND FUND OF 2014 79702. The proceeds of bonds issued and sold pursuant to this division shall be deposited in the Reliable Water Supply Bond Fund of 2014  (hereafter the   "fund   ") , which is hereby created in the State Treasury. CHAPTER 4. SURFACE WATER STORAGE PROJECTS 79703. (a) For the purposes of this chapter, "account" means the Water Storage Development Account created by subdivision (b). (b) The Water Storage Development Account is hereby created in the fund. (c) The sum of  five billion one hundred million dollars ($5,100,000,000)   six billion two hundred sixty million dollars ($6,260,000,000)  is hereby transferred from the fund to the account. Notwithstanding Section 13340 of the Government Code, the funds in the account are hereby continuously appropriated to the Department of Water Resources, without regard to fiscal years, for the design, acquisition, and construction of surface water storage projects. The following surface water storage projects identified by the department in the CALFED Bay-Delta Programmatic Record of Decision, dated August 28, 2000, are eligible for funding pursuant to this chapter: (1) Sites Reservoir located in the Counties of Colusa and Glenn, as identified in the North-of-the-Delta Offstream Storage Investigation Initial Alternatives Information Report, dated May 2006. (2) Temperance Flat Reservoir located in the Counties of Fresno and Madera, as identified in the Upper San Joaquin River Basin Storage Investigation Initial Alternatives Information Report, dated June 2005.  (3) Expansion of Los Vaqueros Reservoir located in the County of Contra Costa, as identified in the Los Vaqueros Expansion Investigation Initial Alternatives Information Report, dated September 2005.   (3) Expansion of the San Luis Reservoir located in the County of Merced.   (4) Expansion of the storage capacity of Shasta Dam by 18.5 acre-feet in order to increase the overall storage capacity of Lake Shasta.  CHAPTER 5. FISCAL PROVISIONS 79720. (a) Bonds in the total amount of  five billion one hundred million dollars ($5,100,000,000)   six billion two hundred sixty million dollars ($6,260,000,000)  , or so much thereof as is necessary, not including the amount of any refunding bonds issued in accordance with Section 79730 may be issued and sold to provide a fund to be used for carrying out the purposes expressed in this division and to reimburse the General Obligation Bond Expense Revolving Fund pursuant to Section 16724.5 of the Government Code. The bonds, when sold, shall be and constitute a valid and binding obligation of the State of California, and the full faith and credit of the State of California is hereby pledged for the punctual payment of both principal of, and interest on, the bonds as the principal and interest become due and payable. (b) The Treasurer shall sell the bonds authorized by the committee pursuant to this section. The bonds shall be sold upon the terms and conditions specified in a resolution to be adopted by the committee pursuant to Section 16731 of the Government Code. 79721. The bonds authorized by this division shall be prepared, executed, issued, sold, paid, and redeemed as provided in the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), and all of the provisions of that law apply to the bonds and to this division and are hereby incorporated in this division as though set forth in full in this division, except subdivisions (a) and (b) of Section 16727 of the Government Code. 79722. (a) Solely for the purpose of authorizing the issuance and sale pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code) of the bonds authorized by this division, the Water Supply Reliability Finance Committee is hereby created. For purposes of this division, the Water Supply Reliability Finance Committee is  "the committee"   the "committee   "  as that term is used in the State General Obligation Bond Law. The committee consists of the Director of Finance, the Treasurer, the Controller, the Director of Water Resources, and the Secretary of the Natural Resources Agency, or their designated representatives. The Treasurer shall serve as chairperson of the committee. A majority of the committee may act for the committee. (b) For purposes of the State General Obligation Bond Law, the Department of Water Resources is designated the "board." 79723. The committee shall determine whether or not it is necessary or desirable to issue bonds authorized pursuant to this division in order to carry out the actions specified in this division and, if so, the amount of bonds to be issued and sold. Successive issues of bonds may be authorized and sold to carry out those actions progressively, and it is not necessary that all of the bonds authorized to be issued be sold at any one time. 79724. There shall be collected each year and in the same manner and at the same time as other state revenue is collected, in addition to the ordinary revenues of the state, a sum in an amount required to pay the principal of, and interest on, the bonds each year. It is the duty of all officers charged by law with any duty in regard to the collection of the revenue to do and perform each and every act that is necessary to collect that additional sum. 79725. Notwithstanding Section 13340 of the Government Code, there is hereby appropriated from the General Fund in the State Treasury, for the purposes of this division, an amount that will equal the total of the following: (a) The sum annually necessary to pay the principal of, and interest on, bonds issued and sold pursuant to this division, as the principal and interest become due and payable. (b) The sum necessary to carry out Section 79726, appropriated without regard to fiscal years. 79726. For the purposes of carrying out this division, the Director of Finance may authorize the withdrawal from the General Fund of an amount not to exceed the amount of the unsold bonds that have been authorized by the committee to be sold for the purpose of carrying out this division less any amount borrowed pursuant to Section 79729. Any amounts withdrawn shall be deposited in the fund. Any money made available under this section shall be returned to the General Fund from proceeds received from the sale of bonds for the purpose of carrying out this division. 79727. All money deposited in the fund that is derived from premium and accrued interest on bonds sold shall be reserved in the fund and shall be available for transfer to the General Fund as a credit to expenditures for bond interest, except that amounts derived from premium may be reserved and used to pay the cost of bond issuance prior to any transfer to the General Fund. 79728. Pursuant to Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code, the cost of bond issuance shall be paid out of the bond proceeds, including premium, if any. To the extent the cost of bond issuance is not paid from premiums received from the sale of bonds, the cost shall be shared proportionally by each program funded through this division by the applicable bond sale. 79729. The board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, in accordance with Section 16312 of the Government Code for the purpose of carrying out this division less any amount withdrawn pursuant to Section 79726. The amount of the request shall not exceed the amount of the unsold bonds that the committee, by resolution, has authorized to be sold for the purpose of carrying out this division. The board shall execute any documents required by the Pooled Money Investment Board to obtain and repay the loan. Any amounts loaned shall be deposited in the fund to be allocated in accordance with this division. 79730. The bonds issued and sold pursuant to this division may be refunded in accordance with Article 6 (commencing with Section 16780) of Chapter 4 of Part 3 of Division 4 of Title 2 of the Government Code, which is a part of the State General Obligation Bond Law. Approval by the voters of the state for the issuance of the bonds under this division shall include the approval of the issuance of any bonds issued to refund any bonds originally issued under this division or any previously issued refunding bonds. 79731. Notwithstanding any other provision of this division, or of the State General Obligation Bond Law, if the Treasurer sells bonds pursuant to this division that include a bond counsel opinion to the effect that the interest on the bonds is excluded from gross income for federal tax purposes, under designated conditions or is otherwise entitled to any federal tax advantage, the Treasurer may maintain separate accounts for the investment of bond proceeds and for the investment of earnings on those proceeds. The Treasurer may use or direct the use of those proceeds or earnings to pay any rebate, penalty, or other payment required under federal law or take any other action with respect to the investment and use of those bond proceeds required or desirable under federal law to maintain the tax exempt status of those bonds and to obtain any other advantage under federal law on behalf of the funds of this state. 79732. The proceeds from the sale of bonds authorized by this division are not "proceeds of taxes" as that term is used in Article XIII B of the California Constitution, and the disbursement of these proceeds is not subject to the limitations imposed by that article. SEC. 3. Section 2 of Chapter 3 of the Statutes of 2009, Seventh Extraordinary Session, as amended by Section 1 of Chapter 74 of the Statutes of 2012, is repealed. SEC. 4. Section 2 of this act shall be submitted to the voters at the November 4, 2014, statewide general election in accordance with provisions of the Government Code and the Elections Code governing the submission of a statewide measure to the voters. SEC. 5. Section 2 of this act shall take effect upon the approval by the voters of the Reliable Water Supply Bond Act of 2014, as set forth in that section at the November 4, 2014, statewide general election. SEC. 6. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to fund a surface water storage program at the earliest possible date, it is necessary that this act take effect immediately.