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SB-701 Salton Sea Obligations Act of 2018.(2017-2018)

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Date Published: 05/17/2017 09:00 PM
SB701:v97#DOCUMENT

Amended  IN  Senate  May 17, 2017
Amended  IN  Senate  April 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 701


Introduced by Senator Hueso
(Principal coauthor: Assembly Member Eduardo Garcia)

February 17, 2017


An act to add Division 45 (commencing with Section 75500) to the Public Resources Code, relating to the Salton Sea, 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 701, as amended, Hueso. Salton Sea Obligations Act of 2018.
The California Constitution requires a measure authorizing general obligation bonds to specify the single object or work to be funded by the bonds and further requires such a measure to be approved by a 2/3 vote of each house of the Legislature and submitted to the voters, as specified. Existing law, the State General Obligation Bond Law, contains procedures for use in authorizing the issuance and sale of, and providing for the repayment of, state general obligation bonds. Under existing law, various general obligation bond measures have been approved by the voters to provide funds for certain natural resources programs.
This bill would enact the Salton Sea Obligations Act of 2018, which, if approved by the voters, would authorize the issuance of bonds in the amount of $500,000,000 pursuant to the State General Obligation Bond Law to finance a program to comply with specified state obligations relating to the Salton Sea. This bill would provide for the submission of these provisions to the voters at the November 6, 2018, statewide general election.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Division 45 (commencing with Section 75500) is added to the Public Resources Code, to read:

DIVISION 45. Salton Sea Obligations Act of 2018

CHAPTER  1. Short Title

75500.
 This division shall be known, and may be cited, as the Salton Sea Obligations Act of 2018.

CHAPTER  2. Findings

75501.
 The people of California find and declare all of the following:
(a) The Salton Sea, located in the Counties of Imperial and Riverside, is California’s largest lake. Once an intermittent freshwater sea that formed and evaporated several times over thousands of years, the modern-day sea formed in 1905 when the Colorado River breached an inadequate diversion structure and flowed into the basin for two years.
(b) The Salton Sea is a terminal lake, with inflows from the New River, the Alamo River, and the Whitewater River, and no natural outflows. The New River, which has primarily been used to convey agricultural runoff as well as treated and raw sewage, is considered one of the most polluted rivers in the United States.
(c) The Salton Sea loses approximately one million acre-feet per year to evaporation, and, as a result, is becoming increasingly saline and exposing more playa. This presents a variety of environmental and public health concerns.
(d) More than 95 percent of California's historical wetlands have been converted to other land uses, making the Salton Sea a critical wetland area in California for migratory waterfowl and shorebirds. The Salton Sea supports more than 400 species of birds, and is an internationally significant stopover site for hundreds of thousands of birds migrating along the Pacific Flyway. Fishery resources in the Salton Sea have also declined significantly due to increasing salinity, evaporation, and declining water quality. Absent remediation efforts, health conditions at the Salton Sea will rapidly deteriorate for both humans and wildlife, especially with the water transfers increasing as of 2017 and a decrease in runoff flows to the Salton Sea.
(e) The shrinking Salton Sea also poses significant air quality concerns for residents in the region as more playa is exposed. According to the Pacific Institute, more than 100 miles of dusty lake bed could be exposed to the desert winds. That would cause fine particles to blow over the Coachella and Imperial Valleys, with the latter already suffering from the highest childhood asthma hospitalization rate in the state and both areas containing high numbers of seniors who are especially susceptible to poor air quality.
(f) Signed in 2003, the Quantification Settlement Agreement (QSA) is a historic water agreement that limited California’s Colorado River water usage to 4.4 million acre-feet annually. Key elements of the QSA include water conservation measures, water transfers from the Imperial Irrigation District to the San Diego County Water Authority and to the Coachella Valley Water District, environmental mitigation obligations, regulatory provisions, and funding agreements.
(g) The Salton Sea Restoration Act (Chapter 13 (commencing with Section 2930) of Division 3 of the Fish and Game Code) includes numerous provisions for habitat and species protection, air quality, and the eventual restoration of the Salton Sea by the state. Specifically, the Salton Sea Restoration Act commits “the State of California [to] undertake the restoration of the Salton Sea ecosystem and the permanent protection of the wildlife dependent on that ecosystem.”
(h) Section 2081.7 of the Fish and Game Code required the Secretary of the Natural Resources Agency, in consultation with the Department of Fish and Wildlife, the Department of Water Resources, the Salton Sea Authority, air quality districts, and the Salton Sea Advisory Committee to undertake a restoration study to determine a preferred alternative for Salton Sea restoration, to prepare a Programmatic Environmental Impact Report (PEIR) analyzing the alternatives, and to submit a preferred alternative to the Legislature on or before December 31, 2006. The resulting report indicated that the preferred alternative would cost nearly $9 billion.
(i) The Legislature has not acted on the preferred alternative, but has taken steps to restore the Salton Sea. The Legislature appropriated funds for the Species Conservation Habitat Project, which is similar to the early start habitat projects described as Phase 1 in the 2006 PEIR. In the Budget Act of 2013, the Legislature appropriated funds available from Proposition 84 (The Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006) for initial restoration projects at the Salton Sea. In the Budget Act of 2016, the Legislature appropriated $80 million from funds available from Proposition 1 (The Water Quality, Supply, and Infrastructure Improvement Act of 2014) to restore habitat and suppress dust at the Salton Sea in the near term.
(j) In 2015, the Governor created the Salton Sea Task Force and directed agencies to develop a comprehensive management plan for the Salton Sea that will meet a short-term goal of 9,000 to 12,000 acres of habitat and dust suppression projects. The Governor also set a medium-term plan to construct 18,000 to 25,000 acres of habitat and dust suppression projects.
(k) On March 16, 2017, the Governor’s administration released its draft 10-year plan. Funding for the first four years of the plan has been secured with the $80 million in Proposition 1 funding. The last six years of the plan are unfunded, with an estimated cost of upwards of $300 million.

CHAPTER  3. Definitions

75502.
 Unless the context otherwise requires, the definitions set forth in this section govern the construction of this division, as follows:
(a) “Acquisition” means obtaining a fee interest or any other interest in real property, including easements, leases, water, water rights, or interest in water obtained for the purposes of instream flows, species or habitat protection, and development rights.
(b) “Committee” means the Salton Sea Obligations Finance Committee created by Section 75520.
(c) “Fund” means the Salton Sea Obligations Fund of 2018 created by Section 75511.
(d) “Instream flows” means a specific streamflow, measured in cubic feet per second at a particular location for a defined time, and typically follows seasonal variations.
(e) “Long term” means for a period of not less than 20 years.
(f) “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 Code.

(g)“Public agency” means a state agency or department, special district, joint powers authority, city, county, city and county, or other political subdivision of the state.

(h)

(g) “Restoration” means the improvement of physical structure or facilities and, in the case of natural systems and landscape features, includes, but is not limited to, projects for the control of erosion, the control and elimination of exotic species, removal of waste and debris, prescribed burning, fuel hazard reduction, fencing out threats to existing or restored natural resources, road elimination, and other plant and wildlife habitat improvement to increase the natural system value of the property. Restoration projects shall include the planning, monitoring, and reporting necessary to ensure successful implementation of the project objectives.

(i)

(h) “Secretary” means the Secretary of the Natural Resources Agency.

(j)

(i) “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  4. General Provisions

75503.
 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 administrative costs of that program.

75504.
 Unless otherwise specified, up to 5 percent of funds allocated for each program funded by this division may be expended for planning and monitoring necessary for the successful design, selection, and implementation of the projects authorized under that program. This section shall not otherwise restrict funds ordinarily used by an agency the Natural Resources Agency for “preliminary plans,” “working drawings,” and “construction” as defined in the annual Budget Act for a capital outlay project or grant project. Water quality monitoring data shall be collected and reported to the State Water Resources Control Board in a manner that is compatible and consistent with surface water monitoring data systems or groundwater monitoring data systems administered by the State Water Resources Control Board. Watershed monitoring data shall be collected and reported to the Department of Conservation in a manner that is compatible and consistent with the statewide watershed program administered by the Department of Conservation.

75505.
 (a) The Department of Finance shall provide for an independent audit of expenditures pursuant to this division. The Secretary of the Natural Resources Agency shall publish a list of all program and project expenditures pursuant to this division not less than annually, in written form, and shall post an electronic form of the list on the agency’s Internet Web site in a downloadable spreadsheet format. The spreadsheet shall include information about the location of each funded project, the project’s objectives, status, and anticipated outcomes, and any matching moneys provided for the project by the grant recipient or other sources.
(b) If an audit, required by statute, of any entity that receives funding authorized by this division is conducted pursuant to state law and reveals any impropriety, the California State Auditor or the Controller may conduct a full audit of any or all of the activities of that entity.
(c) The state agency When issuing any grant with funding authorized by this division division, the Natural Resources Agency shall require adequate reporting of the expenditures of the funding from the grant.

75506.
 If any moneys allocated pursuant to this division are not encumbered or expended by the recipient entity within the time period specified by the administering agency, the unexpended moneys shall revert to the administering agency for allocation consistent with Chapter 5 (commencing with Section 75513).

75507.
 To the extent feasible, a project whose application includes the use of services of the California Conservation Corps, certified community conservation corps, as defined in Section 14507.5, or other nonprofit entities that provide job training and education opportunities for veterans, foster care recipients, farmworkers, or local youth in conservation or restoration projects shall be given preference for receipt of a grant under this division.

75508.
 Moneys allocated pursuant to this division shall not be used to fulfill any mitigation requirements imposed by law.

75509.
 To the extent feasible in implementing this division, a state agency receiving funding under this division shall seek to achieve wildlife conservation objectives through projects on public lands or voluntary projects on private lands. Funds may be used for payment for the creation of measurable habitat improvements or other improvements to the condition of endangered or threatened species, including through the development and implementation of habitat credit exchanges.

75510.
 A state agency that receives funding to administer a grant program under this division The Natural Resources Agency shall report to the Legislature by January 1, 2028, on its expenditures pursuant to this division and the public benefits received from those expenditures.

75511.
 The proceeds of bonds issued and sold pursuant to this division shall be deposited in the Salton Sea Obligations Fund of 2018, which is hereby created in the State Treasury.

75512.
 The Legislature may enact legislation necessary to implement programs funded by this division.

CHAPTER  5. Salton Sea Restoration and Quantification Settlement Agreement Implementation

75513.
 The sum of five hundred million dollars ($500,000,000) shall be available to the Natural Resources Agency, upon appropriation by the Legislature from the fund, for compliance with the intrastate, multiparty quantification settlement agreement provisions, including ecosystem restoration projects at the Salton Sea, as set forth in Chapters 611, 612, and 613 of the Statutes of 2003 and in Chapter 614 of the Statutes of 2004.

75514.
 (a) Funds allocated pursuant to this chapter shall be expended on projects designated in the Salton Sea Management Program to improve and protect public health within the Imperial Valley and ecosystem and wildlife habitat in and around the Salton Sea.
(b) Funds may also be expended to implement projects identified in the Salton Sea Restoration and Renewable Energy Initiative.
(c) Priority for expenditure of funds allocated pursuant to this section shall be determined by the governance entity established consistent with other provisions of statute.

75516.
 (a) Of the funds allocated in Section 75513, not more than ____ dollars ($____) shall be allocated to the Natural Resources Agency, upon appropriation by the Legislature, for placement in the Salton Sea Environmental Water Account, which is hereby created in the fund.
(b) Funds in the Salton Sea Environmental Water Account shall be expended, upon appropriation by the Legislature, to acquire water from willing sellers for protection of wildlife habitat, to suppress dust due to exposure of emissive playa, and to sustain water elevations that protect the environment and human health at the Salton Sea.

CHAPTER  6. Fiscal Provisions

75518.
 (a) Bonds in the total amount of five hundred million dollars ($500,000,000), not including the amount of any refunding bonds issued in accordance with Section 75530, 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, issued, and delivered, 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 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.

75519.
 (a) 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, except as provided in subdivision (b).
(b) Subdivisions (a) and (b) of Section 16727 of the Government Code do not apply to any project or program funded by the proceeds of bonds issued and sold pursuant to this division that is not a capital asset.

75520.
 (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 Salton Sea Obligations Finance Committee is hereby created. For purposes of this division, the Salton Sea Obligations 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, and the Controller. Notwithstanding any other provision of law, any member may designate a representative 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 the chairperson of the committee.
(d) A majority of the committee may act for the committee.

75521.
 The committee shall determine whether or not it is necessary or desirable to issue bonds authorized by 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.

75522.
 For purposes of the State General Obligation Bond Law, “board,” as defined in Section 16722 of the Government Code, means the secretary.

75523.
 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.

75524.
 Notwithstanding Section 13340 of the Government Code, there is hereby continuously 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 75527, appropriated without regard to fiscal years.

75525.
 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 75527. 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. division, excluding refunding bonds authorized pursuant to Section 75530, less any amount withdrawn pursuant to this section and Section 75527. 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.

75526.
 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 or is otherwise entitled to any federal tax advantage, 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.

75527.
 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 division, excluding refunding bonds authorized pursuant to Section 75530 and less any amount borrowed pursuant to Section 75525. Any amounts withdrawn shall be deposited in the fund. fund to be allocated in accordance with this division. Any moneys made available under this section shall be returned to the General Fund, with interest at the rate earned by the moneys in the Pooled Money Investment Account, from proceeds received from the sale of bonds for the purpose of carrying out this division.

75528.
 All moneys deposited in the fund that are 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, except that amounts derived from premiums may be reserved and used to pay the cost of bond issuance prior to any transfer to the General Fund.

75529.
 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 or reimbursed out of the bond proceeds, including premiums, if any. To the extent the cost of bond issuance is not paid from premiums received from the sale of bonds, these costs shall be shared proportionately by allocated proportionately to each program funded through this division by the applicable bond sale.

75530.
 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 approval of the issuance of any bonds issued to refund any bonds originally issued under this division or any previously issued refunding bonds. Any bond refunded with the proceeds of a refunding bond as authorized by this section may be legally defeased to the extent permitted by law in the manner and to the extent set forth in the resolution, as amended from time to time, authorizing that refunded bond.

75531.
 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. 2.

 The Secretary of State shall submit Section 1 of this act to the voters at the November 6, 2018, statewide general election.

SEC. 3.

 Section 1 of this act shall take effect upon approval by the voters of the Salton Sea Obligations Act of 2018 as set forth in Section 1 of this act.

SEC. 4.

 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 California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to maximize the time available for the analysis and preparation of the bond act proposed by Section 1 of this act, it is necessary that this act take effect immediately.