BILL NUMBER: SBX2 2	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senators Perata, Machado, and Steinberg

                        SEPTEMBER 19, 2007

   An act to add Division 26.7 (commencing with Section 79700) to the
Water Code, relating to financing a water supply reliability and
environmental restoration 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 2, as introduced, Perata. Water Supply Reliability Bond Act of
2008.
   Under existing law, various measures have been approved by the
voters to provide funds for water protection, facilities, and
programs.
   This bill would enact the Water Supply Reliability Bond Act of
2008 which, if approved by the voters, would authorize, for the
purposes of financing a specified water supply reliability and
environmental restoration program, the issuance of bonds in the
amount of $5,800,000,000 pursuant to the State General Obligation
Bond Law.
   The bill would provide for submission of the bond act to the
voters at the February 5, 2008, statewide primary election.
   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) is added
to the Water Code, to read:

      DIVISION 26.7.  WATER SUPPLY RELIABILITY BOND ACT OF 2008


      CHAPTER 1.  SHORT TITLE


   79700.  This division shall be known and may be cited as the Water
Supply Reliability Bond Act of 2008.
      CHAPTER 2.  DEFINITIONS


   79702.  Unless the context otherwise requires, the definitions set
forth in this section govern the construction of this division, as
follows:
   (a) "Bay-delta" means the San Francisco Bay/Sacramento-San Joaquin
Delta.
   (b) "Bay Delta Conservation Plan" means the plan prepared pursuant
to the Planning Agreement regarding the Bay Delta Conservation Plan,
dated October 6, 2006.
   (c) "Bay-Delta Estuary" means the delta, Suisun Bay, and Suisun
Marsh.
   (d) "CALFED" means the consortium of state and federal agencies
with management and regulatory responsibilities in the San Francisco
Bay/Sacramento-San Joaquin Delta Estuary.
   (e) "CALFED Bay-Delta Program" means the undertaking by CALFED to
develop and implement, by means of the final programmatic
environmental impact statement/environmental impact report, the
preferred programs, actions, projects, and related activities that
will provide solutions to identified problem areas related to the San
Francisco Bay/Sacramento-San Joaquin Delta Estuary ecosystem,
including, but not limited to, the bay-delta and its tributary
watersheds.
   (f) "Committee" means the Water Supply Reliability Finance
Committee created by Section 79782.
   (g) "Delta" means the Sacramento-San Joaquin Delta as defined in
Section 12220.
   (h) "Department" means the Department of Water Resources.
   (i) "Director" means the Director of Water Resources.
   (j) "Disadvantaged community" means a community with a median
household income that is less than 80 percent of the statewide
average.
   (k) "Fund" means the Reliable Water Supply Bond Fund of 2008
created by Section 79720.
   (l) "Integrated regional water management plan" means a
comprehensive plan for a defined geographic area, the specific
development and content of which shall be defined by guidelines
adopted by the department. At a minimum, an integrated regional water
management plan describes the major water-related objectives and
conflicts within a region, considers a broad variety of water
management strategies, and identifies the appropriate combination of
water demand and supply management alternatives, water quality
protections, and environmental stewardship actions to provide
long-term, reliable, and high-quality water supplies and to protect
the environment at the lowest reasonable cost and with the highest
possible benefits to the environment and to water users.
   (m) "Nonprofit organization" means an organization qualified to do
business in California and qualified under Section 501(c) (3) of
Title 26 of the United States Internal Revenue Code.
   (n) "Public agency" means a state agency or department, district,
joint powers authority, city, county, city and county, or other
political subdivision of the state.
   (o) "Secretary" means the Secretary of the Resources Agency.
   (p) "State General Obligation Bond Law" means 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).
      CHAPTER 3.  GENERAL PROVISIONS


   79710.  An amount that equals not more than 5 percent of the funds
allocated for a grant program pursuant to this division may be used
to pay the costs to administer that program.
   79711.  Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to the
development or implementation of programs or projects authorized or
funded under this division.
   79712.  (a) Prior to disbursing grants pursuant to this division,
the department shall develop project solicitation and evaluation
guidelines. The guidelines may include a limitation on the dollar
amount of grants to be awarded.
   (b) Prior to disbursing grants, the department shall conduct two
public meetings to consider public comments prior to finalizing the
guidelines. The department shall publish the draft solicitation and
evaluation guidelines on its Internet Web site at least 30 days
before the public meetings. One meeting shall be conducted at a
location in northern California and one meeting shall be conducted at
a location in southern California. Upon adoption, the department
shall transmit copies of the guidelines to the fiscal committees and
the appropriate policy committees of the Legislature.
   79713.  It is the intent of the people that the investment of
public funds pursuant to this division should result in public
benefits.
      CHAPTER 4.  RELIABLE WATER SUPPLY BOND FUND OF 2008


   79720.  The proceeds of bonds issued and sold pursuant to this
division shall be deposited in the Reliable Water Supply Bond Fund of
2008, which is hereby created.
      CHAPTER 5.  DELTA SUSTAINABILITY


   79730.  (a) The Bay-Delta Estuary is a unique and irreplaceable
combination of environmental and economic resources. Current
management and use of the delta is not sustainable, and results in a
high level of conflict among various interests. Future delta
sustainability is threatened by changing hydrology, climate change,
flood risk, seismic events, nonnative species, toxics, and other
environmental problems. Future management of the delta must improve
delta ecosystem health and improve the means of delta water
conveyance in order to protect drinking water quality, improve water
supply reliability, restore ecosystem health, and preserve
sustainable agricultural and recreational values in the delta. Many
sources of funding will be needed to implement improved delta
management.
   (b) This chapter provides state funding for public benefits
associated with projects needed to assist in the delta's
sustainability as a vital resource for fish, wildlife, water quality,
water supply, agriculture, and recreation.
   (c) It is the intent of the Legislature that the department
implement, pursuant to current authority and the recommendations of
the Bay Delta Conservation Plan and the Blue Ribbon Task Force
established by Executive Order S-17-06, a comprehensive delta
sustainability program, including both water conveyance and ecosystem
improvements, that meets the following criteria:
   (1) Reduces impacts to native fish caused by the operation of the
export pumps and improves the operational flexibility and ability of
the State Water Project and the Central Valley Project to provide the
benefits described by this subdivision.
   (2) Provides conditions that will allow for habitat improvements
for fish and wildlife in the delta.
   (3) Provides improved water supply reliability and conveyance for
the State Water Project and the Central Valley Project and for market
water transfers.
   (4) Reduces the quantity of bromide, total organic carbon, and
total dissolved solids in the water pumped at the Harvey O. Banks and
C.W. "Bill" Jones pumping plants to protect the public health and
improves the ability of the State Water Project and the Central
Valley Project to manage salinity.
   (5) Reduces vulnerability to seismic events in or near the delta
and provides flexibility to manage uncertainties associated with
climate change and future fishery needs.
   (d) Funds provided by this chapter may not be expended for the
design or construction of delta water transfer facilities.
   79731.  The sum of two billion four hundred million dollars
($2,400,000,000) shall be available for appropriation by the
Legislature from the fund to the department for grants and direct
expenditure, as follows:
   (a) One billion dollars ($1,000,000,000) for projects to do any of
the following:
   (1) Ensure that urban and agricultural water supplies derived from
the delta, including water supplies used within the delta to support
beneficial uses, are not disrupted because of catastrophic failures
of delta levees resulting from earthquakes, floods, land sinking,
rising ocean levels, or other forces.
   (2) Improve the quality of drinking water derived from the delta.
   (3) Physical improvements or other actions to create waterflow
conditions within the delta to provide adequate habitat for native
fish and wildlife.
   (4) Create sustainable land use patterns and flood structures in
the delta.
   (5) Protect transportation and other vital infrastructure in and
around the delta.
   (6) Facilitate other projects that provide public benefits and
support delta sustainability options approved by the Legislature,
including costs associated with planning, monitoring, and design of
alternatives, and project modifications and adaptations necessary to
achieve the goals of this paragraph.
   (b) One billion four hundred million dollars ($1,400,000,000) for
projects to protect and enhance the sustainability of the delta
ecosystem, including any of the following:
   (1) Projects for the development and implementation of the Bay
Delta Conservation Plan and projects that are consistent with the
findings of the Blue Ribbon Task Force established by Executive Order
S-17-06. The plan shall identify projects for the enhancement and
sustainability of selected fish species and shall be developed to
meet the requirements of Chapter 10 (commencing with Section 2800) of
Division 3 of the Fish and Game Code. The projects shall be
implemented through a cooperative effort among regulatory agencies,
regulated and potentially regulated entities, and affected parties,
including state and federal water contractors. These funds may be
expended for the preparation of environmental documentation and
environmental compliance, and for implementing projects identified in
the plan.
   (2) Other projects to protect and restore native fish and wildlife
dependent on the delta ecosystem, including the removal or reduction
of undesirable invasive species.
   (3) Projects to reduce greenhouse gas emissions from exposed delta
soils.
   (c) Expenditure of any portion of the funds provided pursuant to
this chapter is contingent on the adoption of a comprehensive plan
for delta sustainability.
      CHAPTER 6.  WATER SUPPLY RELIABILITY


   79760.  The sum of two billion dollars ($2,000,000,000) shall be
available for appropriation by the Legislature from the fund to the
department for competitive grants for water supply reliability in
accordance with this chapter.
   79761.  (a) Except as provided in subdivision (g), the department
shall award grants to eligible projects that are consistent with an
adopted integrated regional water management plan.
   (b) An urban water supplier that does not prepare, adopt, and
submit its urban water management plan in accordance with the Urban
Water Management Planning Act (Part 2.6 (commencing with Section
10610) of Division 6) is ineligible to receive funds made available
pursuant to this chapter until the urban water management plan is
prepared and submitted in accordance with the requirements of that
act.
   (c) For the purposes of awarding a grant under this chapter, the
department shall require a cost share of not less than 50 percent of
project costs.
   (d) Eligible projects include all of the following:
   (1) Agricultural and urban water use efficiency implementation
projects, as well as feasibility studies, technical assistance,
education, and public outreach, and projects that result in water
savings, increased instream flow, improved water quality, or
increased energy efficiency.
   (2) Recycling, reclamation, desalination, and associated
facilities, including distributions systems.
   (3) Groundwater and surface storage projects, and conjunctive use
and reservoir reoperations projects.
   (4) Groundwater contamination prevention, cleanup, and treatment,
and other water quality projects necessary to protect existing or
potential water supplies.
   (5) Other projects that improve water supply reliability or
improve the supply and delivery of safe drinking water.
   (e) Eligible applicants are public agencies, public utilities, and
mutual water companies. To be eligible for funding under this
chapter, projects proposed by public utilities that are regulated by
the Public Utilities Commission and mutual water companies shall have
a clear and definite public purpose and shall benefit the customers
of those respective water systems.
   (f) Funds made available by this chapter shall be allocated
pursuant to the following regional distribution based on hydrologic
regions and subregions identified in the California Water Plan:
(1) North Coast            $70,000,000
(2) San Francisco Bay     $240,000,000
(3) Central Coast          $95,000,000
(4) Los Angeles subregion $369,000,000
(5) Santa Ana subregion   $200,000,000
(6) San Diego subregion   $161,000,000
(7) Sacramento River      $131,000,000
(8) San Joaquin River     $103,000,000
(9) Tulare/Kern           $109,000,000
(10) North/South Lahonton  $53,000,000
(11) Colorado River Basin  $69,000,000
(12) Interregional        $400,000,000


   (g) Interregional funds may be expended directly or granted by the
department to address multiregional needs or statewide priorities,
including, but not limited to, any of the following:
   (1) Investing in new water technology development and deployment.
   (2) Meeting state water recycling goals.
   (3) Adapting to climate change impacts.
   (4) Reducing contributions to climate change.
   (5) Other projects to improve statewide water management systems.
      CHAPTER 7.  RESOURCE STEWARDSHIP AND ENVIRONMENTAL RESTORATION
PROGRAM


   79770.  The sum of one billion dollars ($1,000,000,000) shall be
available for appropriation by the Legislature from the fund to the
secretary for expenditures and grants for resource stewardship,
ecosystem restoration, urban watershed, and stormwater management
projects, including, but not limited to, all of the following
watersheds:
   (a) The San Joaquin River system.
   (b) The Sacramento River corridor.
   (c) The Salton Sea watersheds.
   (d) The Los Angeles River watershed.
   (e) The San Gabriel River watershed.
   (f) The Santa Ana River watershed.
   (g) The Klamath River watershed.
   (h) North coast watersheds.
   (i) San Francisco Bay watersheds.
   (j) Central coast watersheds.
   (k) South coast watersheds.
   (l) Lake Tahoe Basin.
   (m) Kern River and Tulare Basin.
      CHAPTER 8.  GROUNDWATER PROTECTION


   79775.  The sum of four hundred million dollars ($400,000,000)
shall be available for appropriation by the Legislature for
expenditures, grants, and loans for projects to prevent or reduce the
contamination of groundwater that serves as a source of drinking
water. Funds appropriated by this chapter shall be available for
projects necessary to protect public health by preventing or reducing
the contamination of groundwater that serves as a major source of
drinking water for a community.
   (a) Projects shall be prioritized based upon the following
criteria:
   (1) The threat posed by groundwater contamination to the affected
community's overall drinking water supplies, including the need for
treatment of alternative supplies if groundwater is not available due
to contamination.
   (2) The potential for groundwater contamination to spread and
reduce drinking water supply and water storage for nearby population
areas.
   (3) The potential of the project, if fully implemented, to enhance
local water supply reliability.
   (4) The potential of the project to increase opportunities for
groundwater recharge and optimization of groundwater supplies.
   (b) The board shall give additional consideration to projects that
meet any of the following criteria:
   (1) The project is implemented pursuant to a comprehensive
basin-wide groundwater quality management and remediation plan or is
necessary to develop a comprehensive groundwater plan.
   (2) Affected groundwater provides a local supply that, if
contaminated and not remediated, will require import of additional
water from outside the region.
   (3) The project will serve an economically disadvantaged
community.
   (c) The Legislature, by statute, shall establish both of the
following:
   (1) Requirements for repayment of grant funds in the event of cost
recovery from parties responsible for the groundwater contamination.

   (2) Requirements for recipients of grants to make reasonable
efforts to recover costs from parties responsible for groundwater
contamination.
      CHAPTER 9.  FISCAL PROVISIONS


   79780.  (a) Bonds in the total amount of five billion eight
hundred million dollars ($5,800,000,000), not including the amount of
any refunding bonds issued in accordance with Section 79792, or so
much thereof as is necessary, 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 valid and binding
obligations 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 the 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.
   79781.  The bonds authorized by this division shall be prepared,
executed, issued, sold, paid, and redeemed as provided in the State
General Obligation Bond Law, 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
Section 16727 of the Government Code shall not apply to the extent
that it is inconsistent with any other provision of this division.
   79782.  (a) Solely for the purpose of authorizing the issuance and
sale, pursuant to the State General Obligation Bond Law, of the
bonds authorized by this division, the Reliable Water Supply Finance
Committee is hereby created. For purposes of this division, the
Reliable Water Supply Finance Committee is "the committee" as that
term is used in the State General Obligation Bond Law.
   (b) The committee consists of the Director of Finance, the
Treasurer, the Controller, the Director of Water Resources, and the
Secretary for the Resources Agency. Notwithstanding any other
provision of law, any member may designate a deputy to act as that
member in his or her place for all purposes, as though the member
were personally present.
   (c) The Treasurer shall serve as chairperson of the committee.
   (d) A majority of the members of the committee shall constitute a
quorum of the committee, and may act for the committee.
   79783.  The committee shall determine whether or not it is
necessary or desirable to issue bonds authorized pursuant to this
division 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.
   79784.  "Board," as defined in Section 16722 of the Government
Code for the purposes of compliance with the State General Obligation
Bond Law, means the department.
   79785.  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, and 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
which is necessary to collect that additional sum.
   79786.  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 that is necessary to carry out the provisions of
Section 79789, appropriated without regard to fiscal years.
   79787.  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. The amount of the request shall not exceed the
amount of the unsold bonds that the committee has, by resolution,
authorized to be sold for the purpose of carrying out this division.
The board shall execute those 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.
   79788.  Notwithstanding any other provision of this division, or
of the State General Obligation Bond Law, if the Treasurer sells
bonds 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, the Treasurer may maintain
separate accounts for the bond proceeds invested and for the
investment earnings on those proceeds, and 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, as may be
required or desirable under federal law in order 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.
   79789.  For the purposes of carrying out this division, the
Director of Finance may authorize the withdrawal from the General
Fund of an amount or amounts 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. Any amounts withdrawn shall be
deposited in the fund. Any money made available under this section
shall be returned to the General Fund, with interest at the rate
earned by the money in the Pooled Money Investment Account, from
proceeds received from the sale of bonds for the purpose of carrying
out this division.
   79790.  All money deposited in the fund that is derived from
premium and accrued interest on bonds sold pursuant to this division
shall be reserved in the fund and shall be available for transfer to
the General Fund as a credit to expenditures for bond interest.
   79791.  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. These costs
shall be shared proportionately by each program funded through this
division.
   79792.  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 electors of the state for the issuance of the
bonds under this division shall include approval of the issuance of
any bonds issued to refund any bonds originally issued under this
division or any previously issued refunding bonds.
   79793.  The Legislature hereby finds and declares that, inasmuch
as 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, the disbursement of these proceeds is
not subject to the limitations imposed by that article.
  SEC. 2.  The Secretary of State shall submit Section 1 of this act
to the voters at the February 5, 2008, statewide primary election in
accordance with the provisions of the Government Code and the
Elections Code governing the submission of a statewide measure to the
voters.
  SEC. 3.  (a) Notwithstanding any other provision of law, with
respect to the Water Supply Reliability Bond Act of 2008, as set
forth in Section 1 of this act, all ballots of the February 5, 2008,
statewide primary election shall have printed thereon and in a square
thereof, exclusively, the words: "Water Supply Reliability Bond Act
of 2008" and in the same square under those words, the following in
8-point type:
    "This act will provide financing for projects to protect
California's drinking water supply from natural disasters and improve
water supply reliability and safe drinking water in every region of
the state by authorizing a $5.8 billion dollar bond act."
   (b) Opposite the square, there shall be left spaces in which the
voters may place a cross in the manner required by law to indicate
whether they vote for or against the act.
   (c) Where the voting in the election is done by means of voting
machines used pursuant to law in the manner that carries out the
intent of this section, the use of the voting machines and the
expression of the voters' choices by means thereof are in compliance
with this section.
  SEC. 4.  Section 1 of this act shall take effect only upon the
approval by the voters of the Water Supply Reliability Bond Act of
2008, as set forth in that section.
  SEC. 5.  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 finance a critical water supply reliability and
environmental restoration program as soon as possible, it is
necessary that this act take effect immediately.