BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 746


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          Date of Hearing:  May 6, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          746 (Ting) - As Amended April 14, 2015


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:  This bill grants a 20 year sunset extension to the San  
          Francisco Bay Restoration Authority (Authority). Specifically,  
          this bill:  


          1)Extends the sunset date for the Authority from January 1,  








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            2029, to January 1, 2049.  


          2)Extends the sunset date for the Authority to levy a benefit  
            assessment, special tax, or property-related fee, as  
            specified, from December 31, 2028, to December 31, 2048.   


          3)Extends the date that the Authority must pay and discharge the  
            principal and interest of bond indebtedness from January 1,  
            2029, to January 1, 2049.  


          4)Repeals the law that prohibits the Authority from incurring  
            more bonded indebtedness than 10% of the Authority's total  
            revenues in the preceding fiscal year.  


          5)Broadens the ballot authority from a special tax to any  
            measure that will generate revenues for the Authority to  
            conduct a multi-county election for a proposed special tax  
            measure.


          6)Requires the Authority to call a special election when it  
            proposes any measure that will generate revenues, not just for  
            a special tax.


          7)Extends the repeal date, from January 1, 2017, to January 1,  
            2019, for the Authority to reimburse each county for the  
            incremental costs of the first election at which the Authority  
            proposes a measure. 


          8)Requires an elected official of a bayside city or county,  
            instead of a resident of the San Francisco Bay Area, to serve  
            as the Chair of the Authority.  









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          FISCAL EFFECT:


          Negligible state fiscal impact.  


          COMMENTS:


          1)Purpose.  According to the author, "This bill allows the  
            Authority to effectively carry out its statutory mission to  
            restore critical bay wetlands along the San Francisco Bay  
            shoreline, by ensuring it has the ability to issue bonds in an  
            amount and for a duration that will leverage the greatest  
            impact.  The bill would eliminate the restrictive limitation  
            of the Authority's bonding authority to 10% of its prior  
            year's revenue, which makes significant projects nearly  
            impossible, and extend its existence to January 1, 2049, long  
            enough for it to meet the obligations of any bonds issued.   
            The bill would also ensure that any bond measure is uniformly  
            submitted to voters across the nine counties within the  
            Authority's jurisdiction, allowing the Authority to move  
            forward in planning and seeking voter approval for an initial  
            revenue measure to fund needed restoration projects."  


          2)Background.  The Legislature established the Authority in  
            2008, as a regional government agency charged with raising and  
            allocating resources for the restoration, enhancement,  
            protection, and enjoyment of wetlands and wildlife habitat in  
            the San Francisco Bay and along its shoreline.  The  
            Authority's mission is to formulate a strategy for raising  
            local revenues to help restore 36,000 acres of publicly owned  
            Bay shoreline into tidal wetlands.  The estimated cost of such  
            an endeavor is about $1.43 billion over 50 years.  


            The Legislature authorized the Authority to raise revenue to  








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            support its mission by levying benefit assessments, special  
            taxes, or property-related fees, subject to constitutional  
            requirements.  Proposition 218 (1996) established that a tax  
            levied by a special-purpose authority is a special tax which  
            requires two-thirds voter approval.  Additionally, the  
            Authority can issue revenue bonds under the Revenue Bond Law  
            of 1941 and incur bond indebtedness, subject to specified  
            requirements.  To date, the Authority has not exercised its  
            statutory authority to raise revenue. 


            The Authority recently has discussed placing a parcel tax  
            measure or a general obligation bond (GO bond) measure backed  
            by ad valorem property taxes on the ballot in 2016.  GO bonds  
            are secured by the legal obligation to levy an ad valorem  
            property tax on taxable property in an amount sufficient to  
            pay the debt service.  Two-thirds of voters must approve the  
            issuance of a GO bond, and in doing so, approve the levy of an  
            ad valorem tax to pay the bond.  


          3)Arguments in Support.  The Authority and other environmental  
            groups argue that this bill is essential for the Authority to  
            propose a revenue measure to the voters in 2016 and accomplish  
            its statutory mission.  


          4)Arguments in Opposition.  Opposition argues that by removing  
            bonding caps and increasing the number of years to generate  
            revenue, this bill inhibits accountability and exposes Bay  
            Area residents to the threat of higher taxes and assessments.   



          Prior Legislation. 


          a)SB 279 (Hancock), Chapter 514, Statutes of 2013, specified  
            procedures for the Authority to conduct a multi-county  








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            election to approve a special tax measure.  


          b)AB 1656 (Fong), Chapter 535, Statutes of 2012, made membership  
            and project eligibility changes, and proposed extending the  
            sunset date for the Authority from 2029 to 2036. The sunset  
            date extension was later removed from the bill.  


          c)AB 2103 (Hill), Chapter 373, Statutes of 2010, prescribes the  
            method for the Authority to place a special tax before the  
            voters.  


          d)AB 2954 (Lieber), Chapter 690, Statutes of 2008, created the  
            Authority as a regional government agency charged with raising  
            and allocating resources for the restoration, enhancement,  
            protection, and enjoyment of wetlands and wildlife habitat in  
            the San Francisco Bay and along its shoreline.  





          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081