Existing law establishes in the Natural Resources Agency the State Coastal Conservancy. Existing law authorizes the conservancy to award certain grants for specified purposes.

Existing law establishes a pilot program, which is repealed on July 1, 2025, to explore possible improvements to the states existing advance payment practices for state-funded local assistance grants. Existing law authorizes an administering state agency of a grant program to advance a payment to a recipient entity, which means a local agency or a nongovernmental entity that is awarded a grant by an administering state agency and with whom the administering state agency has entered into a contract pursuant to that grant, in accordance with specified procedures. These procedures include stipulating an advance payment structure and request process within the grant agreement or contract and ensuring that the advance payment to the recipient entity does not exceed 25% of the total grant amount awarded to the recipient entity, except in specified circumstances.

This bill would permit the conservancy to authorize advance payments on a contract or grant awarded in accordance with the pilot program. The bill would repeal this authorization on the date the pilot program is repealed.

Existing law establishes in the Natural Resources Agency the State Coastal Conservancy. Existing law authorizes the conservancy to award certain grants for specified purposes.

Existing law establishes a pilot program, which is repealed on July 1, 2025, to explore possible improvements to the states existing advance payment practices for state-funded local assistance grants. Existing law authorizes an administering state agency of a grant program to advance a payment to a recipient entity, which means a local agency or a nongovernmental entity that is awarded a grant by an administering state agency and with whom the administering state agency has entered into a contract pursuant to that grant, in accordance with specified procedures. These procedures include stipulating an advance payment structure and request process within the grant agreement or contract and ensuring that the advance payment to the recipient entity does not exceed 25% of the total grant amount awarded to the recipient entity, except in specified circumstances.

This bill would permit the conservancy to authorize advance payments on a contract or grant awarded in accordance with the pilot program. The bill would repeal this authorization on the date the pilot program is repealed.

Existing law establishes in the Natural Resources Agency the State Coastal Conservancy. Existing law establishes the Climate Ready Program, administered by the conservancy, in order to address the impacts and potential impacts of climate change on resources within the conservancys jurisdiction. Existing law requires the conservancy, when allocating specified funds, to do specified things, including prioritizing projects that use natural infrastructure in coastal communities to help adapt to climate change and prioritizing projects that provide multiple public benefits, as specified. Existing law authorizes the conservancy to award certain grants for specified purposes.

Existing law establishes in the Natural Resources Agency the State Coastal Conservancy. Existing law establishes the Climate Ready Program, administered by the conservancy, in order to address the impacts and potential impacts of climate change on resources within the conservancys jurisdiction. Existing law requires the conservancy, when allocating specified funds, to do specified things, including prioritizing projects that use natural infrastructure in coastal communities to help adapt to climate change and prioritizing projects that provide multiple public benefits, as specified.

This bill would require the conservancy to prioritize the review of applications for specified projects and to process those applications no later than 45 days from the date the conservancy receives the application.

 THIRD READING  

Bill No: AB 882

Author: Davies (R)

Amended: 3/29/23 in Assembly

Vote: 21

SENATE NATURAL RES. & WATER COMMITTEE: 10-0, 7/10/23

AYES: Min, Seyarto, Allen, Dahle, Eggman, Grove, Laird, Limón, Padilla, Stern

NO VOTE RECORDED: Hurtado

SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23

AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener

ASSEMBLY FLOOR: 80-0, 5/31/23 - See last page for vote

SUBJECT: Coastal resources: State Coastal Conservancy: advance payments

SOURCE: Author

DIGEST:

This bill authorizes, until July 1, 2025, the State Coastal Conservancy (SCC) to authorize advance payments under its contract or grant programs in accordance with the state’s general law for advance payments.

ANALYSIS:

Existing law:

1. Establishes SCC in the California Natural Resources Agency (CNRA), consisting of seven members. Public Resources Code (PRC) §31100.
2. Authorizes SCC to award grant funding under multiple appropriations and programs, including the Climate Ready Program, the purpose of which is to address the impacts and potential impacts of climate change on resources within the conservancy’s jurisdiction. PRC §31113.
3. Authorizes, until January 1, 2025, a state agency that administers a grant program to advance a payment to a recipient entity according to specified rules, including, that the advance payment may not exceed 25 percent of the total grant award unless specified conditions are met.
   1. A state agency may only apply and utilize this advance payment authority if the authorizing statutes for the program administered by the state agency expressly authorizes the use of this authority.
   2. The Department of Finance must provide a report to the Legislature, on or before January 10, 2025, that identifies outcomes of this advanced payment pilot program. Government Code (GOV) §11019.1.

This bill authorizes, until July 1, 2025, SCC to authorize advance payments under its contract or grant programs in accordance with the state’s general law for advance payments.

Background

State Coastal Conservancy. Established in 1976, SCC is a state conservancy that works along the entire length of California’s coast and within the watersheds of rivers and streams that extend inland from the coast. It also works throughout the nine-county San Francisco Bay Area and the entire Santa Ana River watershed. SCC is a non-regulatory agency that supports projects to protect and improve natural lands and waterways along the coast, improve access to the coast, and sustain local coastal economies. SCC also implements statewide resource plans through its projects, including the California Water Action Plan, the Wildlife Action Plan, and others.

Each year, SCC issues millions of dollars in grants for a wide variety of projects along the California coast, San Francisco Bay, and in coastal watersheds to increase availability of beaches, parks and trails for the public, protect and restore natural lands and wildlife habitat, preserve working lands, and increase community resilience to the impacts of climate change. This includes the following programs: Coastal Stories, Wildfire Resilience, California Coastal Trail, Explore the Coast, Explore the Coast Overnight, Climate Ready Program, and regional programs.

SCC makes grants to public agencies, nonprofit organizations, and other community-based organizations or non-federally recognized tribes who apply with a 501(c)(3) fiscal sponsor. SCC will fund most stages of a project including pre-project feasibility studies; property acquisition; project planning, including community involvement, design, environmental review, and permitting; construction, and project-related monitoring. SCC does not fund operation and maintenance activities.

According to SCC’s 2023-2027 Strategic Plan, in the Fiscal Year (FY) 22-23 Budget, SCC received $350 million for climate resilience, $120 million for nature-based sea level rise resilience, and $10 million for wildfire resilience. In addition, SCC has about $29 million in unspent bond funds and expects to receive additional annual appropriations of $3.8 million from the Habitat Conservation Fund until 2029. Further, SCC expects to receive $650,000 in appropriations for Explore the Coast, annually. There are also significant federal funds available for SCC projects in the Infrastructure Investment and Jobs Act, through the National Oceanic Atmospheric Administration, U.S. Army Corps of Engineers, U.S. Environmental Protection Agency, and other federal partner agencies.

Grant payments. In the grant funding allocation process, many state agencies typically issue grant payments as reimbursements following the approval of receipts. Grantees are responsible for covering the costs of the project upfront. Local entities claim that it is not unusual for a number of months to pass between the time grant-related expenses are incurred and the reimbursement is received, which can be difficult for organizations that do not have sufficient capital.

For many grant recipients, including nonprofit organizations or disadvantaged communities, this can be a financial hardship. While many state agencies may reimburse any interest incurred for bridge loans as an allowable grant expense, some organizations do not have the resources to qualify for a market rate loan. Some organizations may decline to apply for grant funding due to the likely delays in the reimbursement processes.

Advance payments. Advance payment of grant funds can help to limit issues with reimbursement timelines and the need for bridge loans. Typically, a percentage of the total grant is advanced to the recipient before or while expenses are incurred. This allows the grant recipient to use grant funds to start the grant project and requires the grant recipient to have less cash on hand to pay for grant expenses. Any remaining funds in the grant are usually repaid through the standard reimbursement process.

Comments

This bill. This bill authorizes, until July 1, 2025, SCC to authorize advance payments under its contract or grant programs in accordance with the state’s general law for advance payments. A state agency may only apply and utilize this advance payment authority if the authorizing statutes for the state agency expressly authorizes the use of this authority, hence the bill for SCC. Under this general authority, which expires July 1, 2025, a state agency may advance payments under the following rules:

• The state agency must prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems.
• The state agency must stipulate an advance payment structure and request process within the grant agreement or contract.
• The state agency must ensure the advance payment does not to exceed 25 percent of the total grant award. However, the state agency can increase this amount if it determines that the project requires a larger advance and the recipient entity provides sufficient justification and documentation to the administering state agency.

The advance payment recipient is also subject to certain rules, including that it must provide an itemized budget, spending timeline, and work plan; submit documentation to support the need for advanced payment, demonstrate good standing with the Internal Revenue Service; deposit advanced funds into a federally insured, interest-bearing account; establish procedures to minimize the amount of time that it takes to spend the advanced funds; and provide progress reports, as specified. Further, the Department of Finance must provide a report to the Legislature by January 10, 2025, that identifies outcomes of this advanced payment pilot program.

Comparison with AB 590 (Hart, 2023). AB 590 would create a new general advance payment authority for all state agencies that mirrors the general advance payment authority provided in GOV §11019.1, but without a sunset or a requirement that the state agency have separate approval in its authorizing statutes to use this advance payment authority. If AB 590 passes, all agencies would have advance payment authority under the bill’s rules. AB 590 is pending on the Senate Floor. At some point, the Legislature may wish to consider whether the various advance payment authorities should be harmonized with the general advance payment authority or if specific types of grant programs or projects warrant specially-tailored advance payment programs.

Consistency with SCC 2023-2027 Strategic Plan. The plan identifies making SCC’s grant disbursement policies more workable for smaller, community-based organizations, including through expanding SCC’s ability to advance funds rather than reimbursing grantees for past expenditures. This bill would facility that by authorizing SCC to authorize advance payments.

Related/Prior Legislation

AB 297 (Vince Fong, 2023) extends the sunset on the CalFire director’s authority to authorize advance payments under the fire prevention local assistance program by ten years, until January 1, 2034. This bill is pending on the Senate Floor.

AB 345 (Wilson, 2023) authorizes the Department of Water Resources and the Central Valley Flood Protection Board to provide advance payments to local agencies for projects that have the purpose of either restoring habitat for threatened and endangered species under state or federal law, improving flood protection, or both. This bill is pending on the Senate Floor.

AB 590 (Hart, 2023) authorizes a state agency administering a grant program to provide an advance payment to a recipient non-profit organization, as specified. This bill is pending on the Senate Floor.

SB 675 (Limón, 2023) eliminates the January 1, 2024, sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program. This bill is pending on the Assembly Floor.

AB 156 (Committee on Budget, Chapter 569, Statutes of 2022) authorized, until July 1, 2025, state agencies administering specified programs to advance payments to specified entities if certain criteria are met, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, unknown but potentially significant costs (General Fund, special funds, or bond funds) if a grantee does not spend or liquidate their advance funds and the Coastal Conservancy is unable to recover the advanced funds.

SUPPORT: (Verified 9/1/23)

Midpeninsula Regional Open Space District

Orange County Business Council

OPPOSITION: (Verified 9/1/23)

None received

ARGUMENTS IN SUPPORT: According to the author, “California's coastal communities are at a cross-roads. It doesn't matter if it is sea-level rise or coastal erosion, our ecological systems and way of life are under assault from climate change. Communities up and down our coast need our help to ensure they can protect these beautiful habitats and tourist attractions. AB 882 is a common-sense measure to empower the state Coastal Conservancy to provide advanced grant funding to recipients and awardees to kick start climate-related projects. As we battle the ever growing threat of climate change, we must be proactive and innovative in our attempts to ensure our communities have the state resources they need to combat these environmental challenges.”

ASSEMBLY FLOOR: 80-0, 5/31/23

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

Prepared by: Catherine Baxter / N.R. & W. / (916) 651-4116

9/2/23 12:11:01

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 882 (Davies) - Coastal resources: State Coastal Conservancy: advance payments

Bill Summary:

This bill would authorize the State Coastal Conservancy to allow advance payments under its contract or grant programs in accordance with the state’s general law for advance payments.

Fiscal Impact:

• Unknown but potentially significant costs (General Fund, special funds, or bond funds) if a grantee does not spend or liquidate their advance funds and the Coastal Conservancy is unable to recover the advanced funds.

Background:

Established in 1976, the State Coastal Conservancy is a state conservancy that works along the entire length of California’s coast and within the watersheds of rivers and streams that extend inland from the coast. It also works throughout the nine-county San Francisco Bay Area and the entire Santa Ana River watershed. the State Coastal Conservancy is a non-regulatory agency that supports projects to protect and improve natural lands and waterways along the coast, improve access to the coast, and sustain local coastal economies. The State Coastal Conservancy also implements statewide resource plans through its projects, including the California Water Action Plan, the Wildlife Action Plan, and others.

Each year, the State Coastal Conservancy issues millions of dollars in grants for a wide variety of projects along the California coast, San Francisco Bay, and in coastal watersheds to increase availability of beaches, parks and trails for the public, protect and restore natural lands and wildlife habitat, preserve working lands, and increase community resilience to the impacts of climate change. This includes the following programs: Coastal Stories, Wildfire Resilience, California Coastal Trail, Explore the Coast, Explore the Coast Overnight, Climate Ready Program, and regional programs.

The State Coastal Conservancy makes grants to public agencies, nonprofit organizations, and other community-based organizations or non-federally recognized tribes who apply with a 501(c)(3) fiscal sponsor. the State Coastal Conservancy will fund most stages of a project including pre-project feasibility studies; property acquisition; project planning, including community involvement, design, environmental review, and permitting; construction, and project-related monitoring. the State Coastal Conservancy does not fund operation and maintenance activities.

According to the State Coastal Conservancy’s 2023-2027 Strategic Plan, in the Fiscal Year (FY) 22-23 Budget, the State Coastal Conservancy received $350 million for climate resilience, $120 million for nature-based sea level rise resilience, and $10 million for wildfire resilience. In addition, the State Coastal Conservancy has about $29 million in unspent bond funds and expects to receive additional annual appropriations of $3.8 million from the Habitat Conservation Fund until 2029. Further, the State Coastal Conservancy expects to receive $650,000 in appropriations for Explore the Coast, annually. There are also significant federal funds available for the State Coastal Conservancy projects in the Infrastructure Investment and Jobs Act, through the National Oceanic Atmospheric Administration, U.S. Army Corps of Engineers, U.S. Environmental Protection Agency, and other federal partner agencies.

Grant payments. In the grant funding allocation process, many state agencies typically issue grant payments as reimbursements following the approval of receipts. Grantees are responsible for covering the costs of the project upfront. Local entities claim that it is not unusual for a number of months to pass between the time grant-related expenses are incurred and the reimbursement is received, which can be difficult for organizations that do not have sufficient capital.

For many grant recipients, including nonprofit organizations or disadvantaged communities, this can be a financial hardship. While many state agencies may reimburse any interest incurred for bridge loans as an allowable grant expense, some organizations do not have the resources to qualify for a market rate loan. Some organizations may decline to apply for grant funding due to the likely delays in the reimbursement processes.

Advance payments. Advance payment of grant funds can help to limit issues with reimbursement timelines and the need for bridge loans. Typically, a percentage of the total grant is advanced to the recipient before or while expenses are incurred. This allows the grant recipient to use grant funds to start the grant project and requires the grant recipient to have less cash on hand to pay for grant expenses. Any remaining funds in the grant are usually repaid through the standard reimbursement process.

Proposed Law:

This bill would authorize, until July 1, 2025, the State Coastal Conservancy to allow advance payments under its contract or grant programs in accordance with the state’s general law for advance payments.

Related Legislation:

AB 297 (Vince Fong, 2023) would extend the sunset on the CalFire director’s authority to authorize advance payments under the fire prevention local assistance program by ten years, until January 1, 2034.

AB 345 (Wilson, 2023) would authorize the Department of Water Resources and the Central Valley Flood Protection Board to provide advance payments to local agencies for projects that have the purpose of either restoring habitat for threatened and endangered species under state or federal law, improving flood protection, or both.

AB 590 (Hart, 2023) would authorize a state agency administering a grant program to provide an advance payment to a recipient non-profit organization, as specified.

SB 675 (Limón, 2023) would eliminate the January 1, 2024, sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program.

Staff Comments:

AB 590 (Hart, 2023) would create a new general advance payment authority for all state agencies that mirrors the general advance payment authority provided in GOV §11019.1, but without a sunset or a requirement that the state agency have separate approval in its authorizing statutes to use this advance payment authority. If AB 590 passes, all agencies would have advance payment authority under the bill’s rules.

-- END --

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Dave Min, Chair

2023 - 2024 Regular

Bill No: AB 882 Hearing Date: July 10, 2023

Subject: Coastal resources: State Coastal Conservancy: advance payments

BACKGROUND AND EXISTING LAW

Existing law:

1. Establishes the State Coastal Conservancy (SCC) in the California Natural Resources Agency (CNRA), consisting of seven members. Public Resources Code (PRC) §31100.
2. Authorizes SCC to award grant funding under multiple appropriations and programs, including the Climate Ready Program, the purpose of which is to address the impacts and potential impacts of climate change on resources within the conservancy’s jurisdiction. PRC §31113.
3. Authorizes, until January 1, 2025, a state agency that administers a grant program to advance a payment to a recipient entity according to specified rules, including, that the advance payment may not exceed 25 percent of the total grant award unless specified conditions are met.
   1. A state agency may only apply and utilize this advance payment authority if the authorizing statutes for the program administered by the state agency expressly authorizes the use of this authority.
   2. The Department of Finance must provide a report to the Legislature, on or before January 10, 2025, that identifies outcomes of this advanced payment pilot program. Government Code (GOV) §11019.1.

Background

State Coastal Conservancy. Established in 1976, SCC is a state conservancy that works along the entire length of California’s coast and within the watersheds of rivers and streams that extend inland from the coast. It also works throughout the nine-county San Francisco Bay Area and the entire Santa Ana River watershed. SCC is a non-regulatory agency that supports projects to protect and improve natural lands and waterways along the coast, improve access to the coast, and sustain local coastal economies. SCC also implements statewide resource plans through its projects, including the California Water Action Plan, the Wildlife Action Plan, and others.

Each year, SCC issues millions of dollars in grants for a wide variety of projects along the California coast, San Francisco Bay, and in coastal watersheds to increase availability of beaches, parks and trails for the public, protect and restore natural lands and wildlife habitat, preserve working lands, and increase community resilience to the impacts of climate change. This includes the following programs: Coastal Stories, Wildfire Resilience, California Coastal Trail, Explore the Coast, Explore the Coast Overnight, Climate Ready Program, and regional programs.

SCC makes grants to public agencies, nonprofit organizations, and other community-based organizations or non-federally recognized tribes who apply with a 501(c)(3) fiscal sponsor. SCC will fund most stages of a project including pre-project feasibility studies; property acquisition; project planning, including community involvement, design, environmental review, and permitting; construction, and project-related monitoring. SCC does not fund operation and maintenance activities.

According to SCC’s 2023-2027 Strategic Plan, in the Fiscal Year (FY) 22-23 Budget, SCC received $350 million for climate resilience, $120 million for nature-based sea level rise resilience, and $10 million for wildfire resilience. In addition, SCC has about $29 million in unspent bond funds and expects to receive additional annual appropriations of $3.8 million from the Habitat Conservation Fund until 2029. Further, SCC expects to receive $650,000 in appropriations for Explore the Coast, annually. There are also significant federal funds available for SCC projects in the Infrastructure Investment and Jobs Act, through the National Oceanic Atmospheric Administration, U.S. Army Corps of Engineers, U.S. Environmental Protection Agency, and other federal partner agencies.

Grant payments. In the grant funding allocation process, many state agencies typically issue grant payments as reimbursements following the approval of receipts. Grantees are responsible for covering the costs of the project upfront. Local entities claim that it is not unusual for a number of months to pass between the time grant-related expenses are incurred and the reimbursement is received, which can be difficult for organizations that do not have sufficient capital.

For many grant recipients, including nonprofit organizations or disadvantaged communities, this can be a financial hardship. While many state agencies may reimburse any interest incurred for bridge loans as an allowable grant expense, some organizations do not have the resources to qualify for a market rate loan. Some organizations may decline to apply for grant funding due to the likely delays in the reimbursement processes.

Advance payments. Advance payment of grant funds can help to limit issues with reimbursement timelines and the need for bridge loans. Typically, a percentage of the total grant is advanced to the recipient before or while expenses are incurred. This allows the grant recipient to use grant funds to start the grant project and requires the grant recipient to have less cash on hand to pay for grant expenses. Any remaining funds in the grant are usually repaid through the standard reimbursement process.

PROPOSED LAW

This bill would authorize, until July 1, 2025, SCC to authorize advance payments under its contract or grant programs in accordance with the state’s general law for advance payments.

ARGUMENTS IN SUPPORT

According to the author, “California's coastal communities are at a cross-roads. It doesn't matter if it is sea-level rise or coastal erosion, our ecological systems and way of life are under assault from climate change. Communities up and down our coast need our help to ensure they can protect these beautiful habitats and tourist attractions. AB 882 is a common-sense measure to empower the state Coastal Conservancy to provide advanced grant funding to recipients and awardees to kick start climate-related projects. As we battle the ever growing threat of climate change, we must be proactive and innovative in our attempts to ensure our communities have the state resources they need to combat these environmental challenges.”

ARGUMENTS IN OPPOSITION

None received.

COMMENTS

This bill. This bill would authorize, until July 1, 2025, SCC to authorize advance payments under its contract or grant programs in accordance with the state’s general law for advance payments. A state agency may only apply and utilize this advance payment authority if the authorizing statutes for the state agency expressly authorizes the use of this authority, hence the bill for SCC. Under this general authority, which expires July 1, 2025, a state agency may advance payments under the following rules:

• The state agency must prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems.
• The state agency must stipulate an advance payment structure and request process within the grant agreement or contract.
• The state agency must ensure the advance payment does not to exceed 25 percent of the total grant award. However, the state agency can increase this amount if it determines that the project requires a larger advance and the recipient entity provides sufficient justification and documentation to the administering state agency.

The advance payment recipient is also subject to certain rules, including that it must provide an itemized budget, spending timeline, and work plan; submit documentation to support the need for advanced payment, demonstrate good standing with the Internal Revenue Service; deposit advanced funds into a federally insured, interest-bearing account; establish procedures to minimize the amount of time that it takes to spend the advanced funds; and provide progress reports, as specified. Further, the Department of Finance must provide a report to the Legislature by January 10, 2025, that identifies outcomes of this advanced payment pilot program.

Comparison with AB 590 (Hart, 2023). AB 590 would create a new general advance payment authority for all state agencies that mirrors the general advance payment authority provided in GOV §11019.1, but without a sunset or a requirement that the state agency have separate approval in its authorizing statutes to use this advance payment authority. If AB 590 passes, all agencies would have advance payment authority under the bill’s rules. AB 590 is pending in the Senate Governmental Organization Committee. At some point, this Committee may wish to consider whether the various advance payment authorities for programs under this Committee’s jurisdiction should be harmonized with the general advance payment authority or if specific types of grant programs or projects warrant specially-tailored advance payment programs.

Consistency with SCC 2023-2027 Strategic Plan. The plan identifies making SCC’s grant disbursement policies more workable for smaller, community-based organizations, including through expanding SCC’s ability to advance funds rather than reimbursing grantees for past expenditures. This bill would facility that by authorizing SCC to authorize advance payments.

Related legislation.

AB 297 (Vince Fong, 2023) would extend the sunset on the CalFire director’s authority to authorize advance payments under the fire prevention local assistance program by ten years, until January 1, 2034. This bill is pending review in the Senate Appropriations Committee.

AB 345 (Wilson, 2023) would authorize the Department of Water Resources and the Central Valley Flood Protection Board to provide advance payments to local agencies for projects that have the purpose of either restoring habitat for threatened and endangered species under state or federal law, improving flood protection, or both. This bill is pending review in the Senate Appropriations Committee.

AB 590 (Hart, 2023) would authorize a state agency administering a grant program to provide an advance payment to a recipient non-profit organization, as specified. This bill is pending review in the Senate Governmental Organization Committee.

SB 675 (Limón, 2023) would eliminate the January 1, 2024, sunset on the CalFire director’s authority to authorize advance payments under the Fire Prevention Grants Program. This bill is pending review in the Assembly Appropriations Committee.

Previous legislation.

AB 156 (Committee on Budget, Chapter 569, Statutes of 2022) authorizes, until July 1, 2025, state agencies administering specified programs to advance payments to specified entities if certain criteria are met, as specified.

SUPPORT

Midpeninsula Regional Open Space District

Orange County Business Council

OPPOSITION

None Received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 882

Author:(Davies)

As Amended Ver:March 29, 2023

Majority vote

SUMMARY

Provides explicit authority to the California Coastal Conservancy to provide advance payments under its grant programs.

Major Provisions

COMMENTS

AB 156 (Budget Committee), Chapter 569, Statutes of 2022, establishes, until July 1, 2025, a new pilot program to explore possible improvements to the state's existing advance payment practices for state-funded local assistance grants. Advance payments may be provided if specified criteria are met. For example, recipient entities must, among other things, provide an itemized budget, spending timeline, and workplan; submit documentation to support the need for an advance payment; demonstrate good standing with the Internal Revenue System; establish procedures to minimize the amount of time that elapses between the transfer of funds and the spend down of those funds; and, provide ongoing progress reports on the spend down of advanced funds.

Agencies are required to prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems, and ensure the advance payment to the recipient entity does not to exceed 25% of the total grant amount awarded to that recipient entity.

AB 156 did not expressly authorize the Conservancy to use that authority, and nothing else in the Conservancy's governing statutes provides such authorization.

According to the Author

California's coastal communities are at a cross-roads. It doesn't matter if it is sea-level rise or coastal erosion, our ecological systems and way of life are under assault from climate change. Communities up and down our coast need our help to ensure they can protect these beautiful habitats and tourist attractions. AB 882 is a common-sense measure to empower the state Coastal Conservancy to provide advanced grant funding to recipients and awardees to kick start climate-related projects. As we battle the ever growing threat of climate change, we must be proactive and innovative in our attempts to ensure our communities have the state resources they need to combat these environmental challenges.

Arguments in Support

None on file.

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, enactment of this bill would result in minor and absorbable costs. However, if the Conservancy is unable to recover unused or misused advanced funds from grantees, this bill would result in losses of state monies, potentially in the hundreds of thousands of dollars (General Fund, special fund, or bond funds).

VOTES

ASM NATURAL RESOURCES: 11-0-0

YES: Luz Rivas, Flora, Addis, Friedman, Hoover, Mathis, Muratsuchi, Pellerin, Ward, Wood, Zbur

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: March 29, 2023

CONSULTANT: Paige Brokaw / NAT. RES. / (916) 319-2092 FN: 0000493

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 882

Author:(Davies) – As Amended Ver:March 29, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill authorizes the State Coastal Conservancy (SCC) to allow advance payments on specified contracts or grants awarded in accordance with a new pilot program established to explore possible improvements to the state’s existing advance payment practices for state-funded local assistance grants, pursuant to AB 156 (Committee on Budget), Chapter 569, Statutes of 2022. This bill also provides that the authorization in this bill is repealed on the date the pilot program is repealed.

FISCAL EFFECT:

SCC anticipates minor and absorbable costs as a result of this bill. However, if SCC is unable to recover unused or misused advanced funds from grantees, this bill would result in losses of state monies, potentially in the hundreds of thousands of dollars (General Fund, special fund, or bond funds).

COMMENTS:

1) Purpose. According to the author:

California’s coastal communities are at a cross-roads. It doesn’t matter if it is sea-level rise or coastal erosion, our ecological systems and way of life are under assault from climate change. Communities up and down our coast need our help to ensure they can protect these beautiful habitats and tourist attractions. AB 882 is a common-sense measure to empower the state Coastal Conservancy to provide advanced grant funding to recipients and awardees to kick start climate-related projects. As we battle the ever growing threat of climate change, we must be proactive and innovative in our attempts to ensure our communities have the state resources they need to combat these environmental challenges.

2) State Coastal Conservancy (SCC). Established in 1976, SCC is a non-regulatory agency that supports projects to protect coastal resources and increase opportunities for the public to enjoy the coast. Among other responsibilities, SCC provides technical assistance and grant funding to local communities, nonprofit organizations, other government agencies, businesses, and private landowners to implement multi-benefit projects.

3) Recent Funding for SCC Programs. Recent budgets have committed approximately $1 billion (General Fund and Greenhouse Gas Reduction Fund) over four years (fiscal years (FY) 2021-22 through FY 2024-25) to SLC to support coastal resilience activities, such as protecting the coast from climate change, adapting to sea-level rise through nature-based activities, and adapting infrastructure to sea-level rise through SCC’s Climate Ready Program. However, given the state’s multibillion dollar budget shortfall, the Governor’s January budget for FY 2023-24 proposes cutting nearly half of this funding.

4) Advance Payment Pilot. AB 156 (Committee on Budget), Chapter 569, Statutes of 2022, establishes, until July 1, 2025, a new pilot program to explore possible improvements to the state’s existing advance payment practices for state-funded local assistance grants. Advance payments may be provided if specified criteria are met. For example, recipient entities must, among other things, provide an itemized budget, spending timeline, and workplan; submit documentation to support the need for an advance payment; demonstrate good standing with the Internal Revenue System; establish procedures to minimize the amount of time that elapses between the transfer of funds and the spend down of those funds; and provide ongoing progress reports on the spend down of advanced funds.

According to SCC, the primary programs that will benefit from advance payment authority are its Explore the Coast grant program, Coastal Stories grant program, and Climate Ready program. SCC notes the cash flow needed for a fully reimbursable state grant can be especially burdensome for small, community-based nonprofit grantees, making advance payments a valuable tool.

Analysis Prepared by: Nikita Koraddi / APPR. / (916) 319-2081

Date of Hearing: March 27, 2023

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Luz Rivas, Chair

ABPCA Bill Id:AB 882 (

Author:Davies) – As Introduced Ver:February 14, 2023

SUBJECT: Coastal resources: Climate Ready Program: State Coastal Conservancy

SUMMARY: Requires the State Coastal Conservancy (Conservancy) to prioritize the review of applications for projects that use natural infrastructure in coastal communities or that protect natural resources in the Climate Ready Program and to process those applications no later than 45 days from the date the Conservancy receives the application.

EXISTING LAW:

1. Establishes the Conservancy and provides the responsibility for implementing a program of agricultural protection, area restoration, and resource enhancement in the coastal zone within policies and guidelines established pursuant to the Coastal Act. (Public Resources Code (PRC) § 31000, et seq.)
2. Establishes the Climate Ready Program, administered by the Conservancy, in order to address the impacts and potential impacts of climate change on resources within the conservancy’s jurisdiction. (PRC § 31113(a))
3. Requires the Conservancy, when allocating specified funds, to prioritize projects that use natural infrastructure in coastal communities to help adapt to climate change and prioritizing projects that provide multiple public benefits, among other things. (PRC § 31113(d)(1))

FISCAL EFFECT: Unknown.

COMMENTS:

1. Need for the bill. According to the author,

California’s coastal communities are at a cross-roads. It doesn’t matter if it is sea-level rise or coastal erosion, our ecological systems and way of life are under assault from climate change. Communities up and down our coast need our help to ensure they can protect these beautiful habitats and tourist attractions. AB 882 is a common-sense measure to ensure that when a locality applies for a Climate Ready Grant, they are given an answer in a timely manner so they can accurately plan for how either use the finds or search for other opportunities, both at the state and federal level.

1. Climate Ready Program. The Conservancy’s Climate Ready Program is helping natural resources and human communities along California’s coast and San Francisco Bay adapt to the impacts of climate change and working to capture greenhouse gas (GHG) emissions from the atmosphere through the conservation of natural and working lands.  

The program provides grants funded through the Greenhouse Gas Reduction Fund for projects that support multi-benefit projects that use natural systems to enhance resilience to climate impacts. The most recent round of grants (2019) focused on managed retreat and natural shoreline infrastructure strategies to increase California’s resiliency to sea level rise.

Under the program, grants are awarded through a rolling pre-application solicitation. The application is a two-step process: the first step in the application process is to submit a pre-application. Applicants are advised to expect a 60-day turnaround time for Conservancy response.

If a pre-application meets the Conservancy’s eligibility criteria and there is available Conservancy funding for the project, applicants will be invited to submit a full application. Full review of the Conservancy then takes another 60 days.

The timeline to award, grant, and fund expenditure will vary from project to project based on the Conservancy’s meeting schedule and prioritization of time sensitive projects. In general, this process can take from 3-6 months. For acquisitions, this timeline also depends on the complexity of the acquisition and the number of documents and agreements that we will need to review and approve. For time-sensitive applications, the Conservancy will discuss the timeline during the application review with the project applicant to determine if we will be able to make the necessary timeline.

1. This bill. AB 882 would require the Conservancy to prioritize the review of applications for projects that use natural infrastructure in coastal communities to help adapt to climate change, and projects that provide multiple public benefits and to process those applications no later than 45 days from the date the Conservancy receives the application.

The state has identified “Cutting Green Tape” as a signature initiative to increase the pace and scale of environmental restoration. Complex and overlapping permitting processes can result in fewer and smaller actions being taken at a slower pace and a greater expense. In the November 2020 stakeholder-coordinated report issued by California Landscape Stewardship Network, Cutting Green Tape: Regulatory Efficiencies for a Resilient Environment, sometimes a project that only takes weeks to implement can take years to permit. Much like the familiar term, “red tape,” “green tape” represents the extra time, money, and effort required to get environmentally beneficial work done because of inefficiencies in our current systems.

The intent of AB 882 appears to be in line with motivation to expedite climate resiliency work.

However, the 45-day requirement doesn’t explicitly apply to the pre-application review or the full application review, so it’s unclear how the Conservancy would implement the 45-day requirement in the bill.

1. Budget constraints. Recent budgets have appropriated $144 million to the Conservancy to support sea‑level rise adaptation projects through its Climate Ready Program. However, faced with a $22.5 billion budget deficit for fiscal year 2023-2024, Governor Newsom proposed significant cuts to coastal programs, including $561 million in reductions for coastal resilience. That includes a 65% reduction ($325 million) over 2022‑23 and 2023‑24 for coastal climate change investments. Budget deficits are projected over the next several fiscal years.

These budget cuts could impact the dedicated staff available to reviewing and processing applications under the Climate Ready Program, potentially making the proposed 45-day turnaround challenging. The author may wish to work with the Conservancy to ensure the 45-day timeframe will be workable.

1. Advance payments. Last year, the Budget Act [AB 156 (Committee on Budget), Chapter 569, Statutes of 2022] provided authority to state agencies to disperse advance payments to grant recipients to help the grantees start work on a project instead of waiting for the grant funding to come in whole or using their own funds until the state pays them back.

Agencies are required to prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities or organizations with modest reserves and potential cashflow problems, and ensure the advance payment to the recipient entity does not to exceed 25 percent of the total grant amount awarded to that recipient entity.

That code section provides that a state agency may use its advance payment process "only if the program administered by the administering state agency expressly authorizes the use of this section,” and amended various agencies’ governing statutes to explicitly authorize use of advance payments. AB 156 did not, however, amend Public Resources Code Division 21 to authorize the Conservancy to use that authority, and nothing else in Division 21 provides such express authorization.  

1. Committee amendments. To accomplish the author’s goal of supporting climate ready project grantees without truncating the Conservancy’s timeline for thoroughly reviewing a grant application, the Committee may wish to consider amending this bill to strike the current contents and replace with explicit authority for the Conservancy to provide advance payments under its grant programs as follows:

31123.

(a) The conservancy may authorize advance payments on a contract or grant awarded under this division in accordance with Section 11019.1 of the Government Code.

(b) This section shall remain in effect only until the date that Section 11019.1 of the Government Code is repealed, and as of that date is repealed.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Paige Brokaw / NAT. RES. /