SB 638: Climate Resiliency and Flood Protection Bond Act of 2024.
- Session Year: 2023-2024
- House: Senate
- Latest Version Date: 2023-06-28
Current Status:
Failed
(2023-07-06: July 11 hearing postponed by committee.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
What does this bill do?
If approved by voters, this bill would authorize $6 billion in state bonds to pay for flood protection and climate‑resiliency projects across California, affecting the Department of Water Resources, local agencies, levee and dam operators, Delta communities, and disadvantaged communities. It directs $2.5 billion for State Plan of Flood Control repairs and improvements (including $300 million for nonurban levees and $500 million for San Joaquin work), $500 million for Delta projects (at least $200 million for local levee maintenance), and three separate $1 billion allocations for non‑State‑Plan flood projects, multiple‑benefit flood management, and dam safety.
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The California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For All Act of 2018, approved by the voters as Proposition 68 at the June 5, 2018, statewide primary direct election, authorizes the issuance of bonds in the amount of $4,000,000,000 pursuant to the State General Obligation Bond Law to finance a drought, water, parks, climate, coastal protection, and outdoor access for all program. Article XVI of the California Constitution requires measures authorizing general obligation bonds to specify the single object or work to be funded by the bonds and further requires a bond act to be approved by a 2/3 vote of each house of the Legislature and a majority of the voters.
This bill would enact the Climate Resiliency and Flood Protection Bond Act of 2024 which, if approved by the voters, would authorize the issuance of bonds in the amount of $6,000,000,000 pursuant to the State General Obligation Bond Law, for flood protection and climate resiliency projects.
This bill would provide for the submission of these provisions to the voters at the November 5, 2024, statewide general election.
This bill would become operative only if SB 867 of the 202324 Regular Session is enacted and takes effect on or before January 1, 2024.
The California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For All Act of 2018, approved by the voters as Proposition 68 at the June 5, 2018, statewide primary direct election, authorizes the issuance of bonds in the amount of $4,000,000,000 pursuant to the State General Obligation Bond Law to finance a drought, water, parks, climate, coastal protection, and outdoor access for all program. Article XVI of the California Constitution requires measures authorizing general obligation bonds to specify the single object or work to be funded by the bonds and further requires a bond act to be approved by a 2/3 vote of each house of the Legislature and a majority of the voters.
This bill would enact the Climate Resiliency and Flood Protection Bond Act of 2024 which, if approved by the voters, would authorize the issuance of bonds in the amount of $6,000,000,000 pursuant to the State General Obligation Bond Law, for flood protection and climate resiliency projects.
This bill would provide for the submission of these provisions to the voters at the November 5, 2024, statewide general election.
This bill would become operative only if SB 867 of the 202324 Regular Session is enacted and takes effect on or before January 1, 2024.
The California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For All Act of 2018, approved by the voters as Proposition 68 at the June 5, 2018, statewide primary direct election, authorizes the issuance of bonds in the amount of $4,000,000,000 pursuant to the State General Obligation Bond Law to finance a drought, water, parks, climate, coastal protection, and outdoor access for all program. Article XVI of the California Constitution requires measures authorizing general obligation bonds to specify the single object or work to be funded by the bonds and further requires a bond act to be approved by a 2/3 vote of each house of the Legislature and a majority of the voters.
This bill would enact the Climate Resiliency and Flood Protection Bond Act of 2024 which, if approved by the voters, would authorize the issuance of bonds in the amount of $4,500,000,000, $6,000,000,000 pursuant to the State General Obligation Bond Law, for flood protection and climate resiliency projects.
This bill would provide for the submission of these provisions to the voters at the November 5, 2024, statewide general election.
The California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access For All Act of 2018, approved by the voters as Proposition 68 at the June 5, 2018, statewide primary direct election, authorizes the issuance of bonds in the amount of $4,000,000,000 pursuant to the State General Obligation Bond Law to finance a drought, water, parks, climate, coastal protection, and outdoor access for all program. Article XVI of the California Constitution requires measures authorizing general obligation bonds to specify the single object or work to be funded by the bonds and further requires a bond act to be approved by a 2/3 vote of each house of the Legislature and a majority of the voters.
This bill would enact the Climate Resiliency and Flood Protection Bond Act of 2024 which, if approved by the voters, would authorize the issuance of bonds in the amount of $4,500,000,000, pursuant to the State General Obligation Bond Law, for flood protection and climate resiliency projects.
This bill would provide for the submission of these provisions to the voters at the November 5, 2024, statewide general election.
This division shall be known, and may be cited, as the Climate Resiliency and Flood Protection Bond Act of 2024.
86001.The people of California find and declare all of the following:
(a)Californias central valley continues to have one of the highest flood risks in the nation. A series of atmospheric river and arctic storms impacted California at the end of 2022 and beginning of 2023 with rounds of heavy rain and mountain snow that caused flooding and mudslides with each passing storm. Surging water levels on local rivers and streams led to loss of life and property damage in both protected and unprotected areas. State, regional, and local highways and roads were inundated and impassable. Rising waters tested levee systems in urban areas, breached levees in rural areas, and caused rivers and streams to overflow their banks throughout the state.(b)Climate change is impacting California in unprecedented ways, including intensifying wildfires, mud slides, floods and drought, sea level rise, and extreme heat, that threaten jobs and economic security, the safety of our communities, and cultural and natural resources.(c)Actions must be accelerated to enable the state to adapt and become more resilient to the impacts of climate change, including investing in flood system improvements and expanding nature-based solutions.(d)The Department of Water Resources projects wetter, warmer future conditions and estimates that runoff from historical record storm events will significantly increase by up to 56 percent in the Sacramento River and 116 percent in the San Joaquin River. Projections for a simulated one in 200-year event predict peaks flows five times greater flowing towards the Sacramento-San Joaquin Delta from the San Joaquin River alone.(a)Climate change is impacting California in unprecedented ways, including intensifying wildfires, mudslides, floods, drought, sea level rise, and extreme heat, that threaten jobs and economic security, the safety of our communities, and cultural and natural resources. Actions must be accelerated to enable the state to adapt and become more resilient to the impacts of climate change, including investing in flood control system improvements and expanding nature-based solutions.
(b)Californias central valley continues to have one of the highest flood risks in the nation. The Department of Water Resources projects wetter, warmer conditions, and estimates that runoff from historical record storm events will significantly increase by up to 56 percent in the Sacramento River Basin and 116 percent in the San Joaquin River Basin. Projections for a simulated one in 200-year event predict peak flows five times greater flowing towards the Sacramento-San Joaquin Delta from the San Joaquin River alone.
(e)(c)Researchers at the University of California, Los Angeles have concluded that climate change has already doubled the likelihood of an event capable of producing catastrophic flooding, and that even larger future increases are likely due to continued warming. River and stream runoff in a future extreme storm scenario is two to four times greater than historical values in the Sierra Nevada Mountains due to increased precipitation rates and decreased amounts of snow.
(f)More than 95 percent of the State Plan of Flood Control levee miles have failed federal inspections, which at one time this decade resulted in nearly one-half of the levee miles being ineligible for federal rehabilitation assistance. The 2022 Central Valley Flood Protection Plan update calls for a total investment of $25 billion to $30 billion over 30 years.(g)(d)More than 1,320,000 people are at risk in central valley floodplains, and that population is projected to grow to 1,700,000 by 2072. In addition, the central valley is one of the worlds most productive agricultural regions, accounting for over $40 billion in gross value of agricultural production from a diversity of commodities. Interstate, regional, and local transportation routes are also threatened. Without adequate investment in the flood control system, California may expect as much as $3.2 billion in damages in the central valley and 500 deaths on average per year by 2072.
(h)(e)The State of California is responsible for alleviating its liability in the event of a failure of State Plan of Flood Control facilities in the central valley. With over $80 billion in damageable property currently protected by these facilities, there is a significant risk to the General Fund, should the state fail to properly operate, maintain, and improve the flood control system. As the state assumes greater liability for levee breaches, Californias flood protection system is facing unprecedented changes, including increasing development and population growth in the floodplain, rising flood peaks, higher costs that delay fixing problem levee sites, and the need for environmental protection. One court ruling, Paterno v. State of California (1999) 74 Cal.App.4th 68, involved some 3,000 plaintiffs and found the state liable for potentially hundreds of millions of dollars. By 2007, California had paid $464 million for damages due to one levee failure.
(i)(f)In April 2019, Governor Newsom directed state agencies through Executive Order N-10-19 to develop a water resilience portfolio, described as a set of action to meet Californias water needs through the 21st century. The California Water Resilience Portfolio, released in 2020, supports implementation of the Central Valley Flood Protection Plan and its state systemwide investment approach to protect urban areas, small communities, and rural areas; improve operations and maintenance of the flood system; and integrate natural systems into flood risk reduction projects. The Central Valley Flood Protection Plan accounts for the projected impacts of climate change in order to protect vulnerable communities and infrastructure and restore floodplains along the San Joaquin River and its tributaries.
(j)The Central Valley Flood Protection Act of 2008 directs the Department of Water Resources to prepare a Central Valley Flood Protection Plan and subsequent updates to be adopted by the Central Valley Flood Protection Board. The 2012 plan laid the framework of a systemwide approach for flood risk management in Californias central valley. The 2017 plan update further refined the systemwide approach to detail the ongoing need for investments in flood risk reduction, addressed actions that prioritized a multibenefit approach for flood risk reduction that protects and restores biodiversity while stewarding natural and working lands, building climate resilience, and supporting economic sustainability.(k)There is a lack of readily available state and federal mitigation needed to implement flood risk reduction projects. The lack of mitigation can expose citizens to flood risk longer than necessary by delaying project implementation and increasing project costs.(l)Through the 2022 update to the Central Valley Flood Protection Plan, the Central Valley Flood Protection Board affirmed a commitment to diversity, equity, and inclusion that recognizes that all people of Californias central valley deserve equitable flood protection, regardless of ability, age, ethnicity, gender, race, religion, sexual orientation, socioeconomic status, or any social or cultural identifier. The 2022 update calls for a total investment of $25 billion to $30 billion in the central valley flood control system over 30 years.(m)(g)Roughly 1,115 miles of levees protect farms, cities, schools and people in and around the Sacramento-San Joaquin Delta (Delta). State investment in Delta levees reduces risk to people, property, and infrastructure, including pipelines, electricity transmission, highways, and rail lines. Delta levees protect high-value nontidal habitat and islands and tracts that contribute to the cultural, recreational, natural resource, and agricultural qualities that distinguish the Delta and Suisun Marsh. Widespread flooding due to levee failure could force a long-term shutdown of the State Water Project and federal Central Valley Project pumps in the south Delta that supply much of California with water.
(n)(h)The risk of more severe flooding is not limited to the central valley. All areas of the state, including urban areas outside of the central valley and coastal watersheds, are increasingly at risk of severe damages now and in the future due to more frequent and intense atmospheric river events. Atmospheric rivers play a major role in Californias rain season producing between one-quarter and one-half of our states annual precipitation. Rain and snow amounts can vary widely depending on the exact location, timing, and moisture content of an atmospheric river.
86002.For purposes of this division, the following definitions apply:
(a)Board means the Central Valley Flood Protection Board.
(b)Delta means the area of the Sacramento-San Joaquin Delta as defined in Section 12220.
(c)Delta conveyance facilities means facilities that convey water directly from the Sacramento River to the State Water Project or the federal Central Valley Project pumping facilities in the south Delta.
(d)Department means the Department of Water Resources.
(e)Disadvantaged community means a community with an annual median household income that is less than 80 percent of the statewide annual median household income.
(f)Facilities of the State Plan of Flood Control means the levees, weirs, bypasses, channels, and other features of the federal and state authorized flood control facilities located in the Sacramento and San Joaquin River drainage basin for which the board or the department has given the assurances of nonfederal cooperation to the United States required for the project, and those facilities identified in Section 8361. River and San Joaquin River watersheds included in the State Plan of Flood Control Descriptive Document, as may be updated from time to time.
(g)Local agency means a city, county, special district, joint powers authority, or other political subdivision of the state.
(g)(h)Nonprofit organization means any nonprofit corporation formed pursuant to the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code) and qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(h)(i)Nonurbanized area means a developed area or an area outside a developed area as defined under subdivision (f) of Section 65007 of the Government Code.
(i)(j)Project levees means the levees that are part of the Facilities of the State Plan of Flood Control.
(j)(k)State Plan of Flood Control means the state and federal flood control works, lands, programs, plans, conditions, and mode of maintenance and operations of the Sacramento River Flood Control Project described in Section 8350 of the Water Code, as may be amended from time to time, and of flood control projects in the Sacramento River and San Joaquin River watersheds authorized pursuant to Article 2 (commencing with Section 12645) of Chapter 2 of Part 6 of Division 6, as may be amended from time to time, for which the board or the department has provided the assurances of nonfederal cooperation to the United States, which shall be updated by the department and compiled into a single document entitled The State Plan of Flood Control. projects, and facilities as defined in Section 9110.
(k)(l)Undeveloped area means an area as defined under paragraph (2) of subdivision (c) of Section 8307.
(l)(m)Urban area means any contiguous area in which more than 10,000 residents are protected by project levees.
86003.(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 size of grants to be awarded.
(b)The department shall conduct three four public meetings to consider public comments before finalizing the guidelines. The department shall publish the draft solicitation and evaluation guidelines on its internet website at least 30 days before the public meetings. One meeting shall be conducted at a location in northern California, one meeting shall be conducted in the Sacramento-San Joaquin Delta, one meeting shall be conducted at a location in the San Joaquin Valley of California, and one meeting shall be conducted at a location in southern California. The department shall provide outreach to disadvantaged communities to promote access and participation in those meetings. Upon adoption, the department shall transmit copies of the guidelines to the fiscal committees and the appropriate policy committees of the Legislature.
86004.(a)The department may authorize advance payments to local agencies for projects that have at least one of the following project purposes: restoring habitat for threatened and endangered species under state or federal law or improving flood protection. The amount of funds advanced by the department to the local agency at any one time shall not exceed 25 percent of the entire amount authorized to be provided under the funding agreement between the department and the local agency. The department may exceed the 25-percent limit if it determines that the project requires a larger advance, and the local agency provides sufficient justification and documentation to the department. In light of the states interest in these projects, the department may reduce or eliminate any retention that would otherwise be withheld under the funding agreement.
(b)For purposes of this section, advance payments are funds that are provided to a local agency before the local agency has incurred expenses in furtherance of a project described in subdivision (a) and that are provided by the department to allow the local agency to fund the project on a cash flow basis. The department shall prioritize projects serving disadvantaged, low-income, and under-resourced communities with modest reserves and potential cashflow problems.
(c)The department shall do all of the following:(1)Prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities with modest reserves and potential cashflow problems.(2)Stipulate an advance payment structure and request process within the grant agreement or contract between the department and local agency.(3)Adopt requirements regarding the use of the advance payment to ensure that the funds are used properly.86005.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.
86006.(a)Except as provided in subdivision (b), up to 10 percent of funds allocated for each program funded by this division may be expended, including, but not limited to, by grants, for planning technical assistance, 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 for preliminary plans, working drawings, and construction as defined in the annual Budget Act for a capital outlay project or grant project. Planning may include feasibility studies for environmental site cleanup that would further the purpose of a project that is eligible for funding under this division. Monitoring may include measuring greenhouse gas emissions reductions and carbon sequestration associated with program expenditures under this division.
(b)Funds used for planning projects that benefit disadvantaged communities may exceed 10 percent of the funds allocated if the department determines that there is a need for the additional funding.
86007.(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 agencys internet website in a downloadable spreadsheet format. The spreadsheet shall include information about the location and footprint of each funded project, the projects objectives, the status of the project, anticipated outcomes, any matching moneys provided for the project by the grant recipient, and the applicable chapter of this division pursuant to which the grant recipient received moneys.
(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 department shall require adequate reporting of the expenditures of the funding from the grant.
(d)The costs associated with the publications, audits, statewide bond tracking, cash management, and related oversight activities provided for in this section shall be funded from this division. These costs shall be shared proportionally by each program through this division.
86008.Funds provided by this division shall not be expended to pay the costs of the design, construction, operation, mitigation, or maintenance of Delta conveyance facilities.
2.Climate Resiliency and Flood Protection86100.The sum of six billion dollars ($6,000,000,000) shall be available, upon appropriation by the Legislature, for flood protection and climate resiliency projects pursuant to this chapter.
86105.Of the funds made available by Section 86100, two billion five hundred million dollars ($2,500,000,000) shall be available to the department, upon appropriation by the Legislature from the fund, for the following purposes:
(a)The evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses, and facilities replacement, expansion, or improvement of facilities of the State Plan of Flood Control, including, but not limited to, all of the following:
(1)Restoring the design capacity of bypasses.
(2)Repairing erosion sites and removing sediment from channels or bypasses.
(3)Evaluating and repairing levees and any other facilities of the State Plan of Flood Control.(4)(3)Implementing mitigation measures for a project undertaken pursuant to this subdivision, including funding for an endowment to maintain such measures. The department may fund participation in a natural community conservation plan pursuant to Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code, as may be amended from time to time, or a habitat conservation plan under Section 10(a)(1)(B) of the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), as may be amended from time to time, implementation of an advanced mitigation credit pursuant to Section 1856 of the Fish and Game Code, as may be amended from time to time, or a regional conservation investment strategy pursuant to Chapter 9 (commencing with Section 1850) of Division 2 of the Fish and Game Code, as may be amended from time to time, to facilitate projects authorized by this subdivision.
(5)(4)Improving or adding facilities that are not a part of the State Plan of Flood Control that protect areas that are also protected by the State Plan of Flood Control.
(6)(5)Implementing actions consistent with the Central Valley Flood Protection Plan 2022 Update, Update adopted pursuant to Part 6 (commencing with Section 9600) of Division 5, and subsequent updates, including the Plans Conservation Strategy.
(7)(6)Flood emergency response projects.
(b)Improving or adding facilities to the State Plan of Flood Control to increase levels of flood protection and climate resiliency, Control, expanding or improving designated floodways, and restoring floodplain functions to provide flood risk reduction and climate resiliency, including all related costs for mitigation and infrastructure relocation. Funds made available by this subdivision may be expended for state financial participation in federal and state authorized flood control projects, feasibility studies and design of federal flood damage reduction and related projects, improving the capacity of bypasses, reservoir reparation, reservoir reoperation, and flood managed aquifer recharge projects.
(c)Of the funds provided in this section, not less than three hundred million dollars ($300,000,000) shall be available to increase flood protection and climate resiliency for the repair, rehabilitation, reconstruction, replacement, or improvement of levees that protect nonurbanized areas and undeveloped areas, including the repair, improvement, or setback of bypass levees.
(d)Of the funds provided in this section, not less than five hundred million dollars ($500,000,000) shall be available to increase flood protection and climate resiliency for the repair, rehabilitation, reconstruction, replacement, or improvement of levees of the San Joaquin River and its tributaries. for the repair, rehabilitation, replacement, and improvement of levees, development or expansion of bypasses, addition of designated floodways, or restoration of floodplains in the San Joaquin River watershed to achieve flood risk reduction and climate resiliency.
(e)In expending funds provided in this section, the department shall do both of the following:
(1)Collaborate with local agencies to secure the maximum feasible amounts of federal and local matching funds to fund disaster preparedness and flood prevention projects in order to ensure prudent and cost-effective use of these funds to the extent that this does not prohibit timely implementation of this division. federal and local matching funds to implement flood risk reduction projects to ensure prudent and cost-effective use of these funds to the extent that this does not prohibit timely implementation of this division.
(2)Prioritize project selection and project design to achieve maximum public benefits from the use of these funds. the goals of the Central Valley Flood Protection Plan and the Central Valley Flood Protection Plan Conservation Strategy.
86110.(a)Of the funds made available by Section 86100, five hundred million dollars ($500,000,000) shall be available, upon appropriation by the Legislature, to the department for projects in the Delta to increase flood protection and climate resiliency. The funds shall be expended for all of the following purposes:
(1)Local Of the funds made available by this subdivision, not less than two hundred million dollars ($200,000,000) shall be available for local assistance under the delta levee maintenance subventions program under Part 9 (commencing with Section 12980) of Division 6, as that part may be amended.
(2)Special flood protection projects under Chapter 2 (commencing with Section 12310) of Part 4.8 of Division 6, as that chapter may be amended.
(3)Flood emergency response projects.
(b)Projects that are undertaken pursuant to paragraph (2) of subdivision (a) shall have as their principal purpose the preservation, protection, rehabilitation, and improvement of existing levees levees, including, but not limited to, to better protect against the threat of earthquake and sea level rise with improved engineering standards to allow for progressive rehabilitation and improvement to maintain an adequate factor of safety. Other subordinate project purposes may include, but not be limited to, the following:
(1)Improving the protection for quality of drinking water supplies derived from the Delta.
(2)Reducing salts contained in Delta water and delivered to, and often retained in, agricultural areas.
(3)Maintaining water quality for Delta users.
(4)Assisting in preserving Delta lands, including terrestrial and aquatic habitats important for listed or candidate species under the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), as may be amended from time to time, the California Endangered Species Act, as may be amended from time to time, and waterfowl of the Pacific flyway.
(5)Protecting water rights of the area of origin and the environments of the Sacramento-San Joaquin river systems.
(6)Protecting highways, utility facilities, and other infrastructure located within the Delta.
(7)Preventing the disruption of water supplies derived from the Sacramento-San Joaquin Delta.
(8)Protecting the critical evacuation and national defense routes for the region.
86115.Of the funds made available by Section 86100, the sum of one billion dollars ($1,000,000,000) shall be available, upon appropriation by the Legislature, to the department for payment for the states share of the nonfederal costs, and related costs, of flood protection and climate resiliency projects authorized under any of the following:
(a)The State Water Resources Law of 1945 (Chapter 1 (commencing with Section 12570) and Chapter 2 (commencing with Section 12639) of Part 6 of Division 6), as may be amended from time to time.
(b)The Flood Control Law of 1946 (Chapter 3 (commencing with Section 12800) of Part 6 of Division 6), as may be amended from time to time.
(c)The California Watershed Protection and Flood Prevention Law (Chapter 4 (commencing with Section 12850) of Part 6 of Division 6), as may be amended from time to time.
(d)The costs described in subdivision (a) include costs incurred in connection with either of the following:
(1)The granting of credits or loans to local agencies, as applicable, pursuant to Sections 12585.3 and 12585.4 of, subdivision (d) of Section 12585.5 of, and Sections 12866.3 and 12866.4 of, the Water Code, as may be amended from time to time.
(2)The implementation of Chapter 3.5 (commencing with Section 12840) of Part 6 of Division 6, as may be amended from time to time.
(e)The funds made available by this section shall be allocated only to projects that are not part of the State Plan of Flood Control.
86120.(a)Of the funds made available by Section 86100, one billion dollars ($1,000,000,000) shall be available, upon appropriation by the Legislature, to the department for flood management projects that are components of multiple benefit flood management system improvements that reduce risks to public safety, provide greater resiliency from the effects of climate change, extreme weather events, and sea level rise, and provide improvement to aquatic and wildlife habitat. The department shall coordinate the expenditure of multibenefit funds multiple benefit funds in the central valley with the board and the Department of Fish and Wildlife. Where practical, the department shall collaborate with nonprofit organizations and nongovernmental organizations to inform the expenditure of these funds. Eligible project types include, but are not limited to, levee setbacks, projects connecting rivers with flood plains, enhancement of flood plains and bypasses, groundwater recharge, and land acquisitions and easements necessary for these project types. Eligible projects include any of the following:
(1)Multiple benefit flood management projects that reduce the impacts of climate change on inland or coastal infrastructure, communities, or ecosystems, and provide ecosystem, wildlife, or groundwater recharge benefits.
(2)Natural infrastructure projects to reduce flood intensity and slow watershed runoff.
(3)Projects that provide matching grants for, or otherwise leverage funding from, the Federal Emergency Management Agency, the United States Army Corps of Engineers, or other federal mitigation and resilience funding.
(4)Projects that provide benefits to fish, waterfowl, wildlife, and anadromous and other native fish species along migratory corridors.
(5)Projects that restore streams to a more natural state by removing drainage obstructions, culverts, and paved channels to enable more stormwater water to be absorbed and gradually released by soil and plants.
(6)Acquiring easements and other interests in real property to protect protect, expand, or enhance flood protection corridors and bypasses while preserving or enhancing the agricultural use of the real property.
(7)Constructing new levees necessary for the establishment or expansion of a flood protection corridor or bypass.
(8)Setting back existing flood control levees, and in conjunction with undertaking those setbacks, strengthening or modifying existing levees and weirs.
(9)Relocating or floodproofing structures necessary for the establishment of a flood protection corridor.
(10)Acquiring interests in, or providing incentives for maintaining agricultural uses of, real property that is in a flood plain that cannot reasonably be made safe from future flooding.
(11)Acquiring easements and other interests in real property to protect protect, expand, or enhance flood protection corridors while preserving or enhancing the wildlife value of the real property.
(b)Of the funds made available pursuant to this section, one hundred million dollars ($100,000,000) shall be allocated for multiple benefit flood management projects in urban coastal watersheds.
86125.(a)Of the funds made available by Section 86100, one billion dollars ($1,000,000,000) shall be available to the department to provide state funding to local agencies for replacement, repairs, rehabilitation, improvements, and other dam safety projects at existing dams and associated facilities.
(b)Projects eligible to receive funding include, but are not limited to, all of the following:
(1)Dam safety projects at existing dams designated as high hazard or extremely high hazard by the departments Division of Safety of Dams.
(2)New spillway and repair projects at existing dams.
(3)Improvement projects at existing dams to facilitate implementation of forecast-informed reservoir operations.
(4)Reservoir seismic retrofit projects.
(5)Flood risk reduction projects associated with the dam safety projects described in paragraph (1).
(6)One-time projects to remove sediment resulting from wildfires or extraordinary storm events.
(c)Funding for dam safety improvement projects shall provide one or more of the following public benefits:
(1)Protection of public safety.
(2)Restoration of water storage design capacity.
(3)Enhancement of water supply reliability.
(4)Implementation of forecast-informed reservoir operations.
(5)Enhancement, protection, or restoration of habitat for fish and wildlife.
(6)Protection of water quality.
(7)Flood risk reduction.
(d)(1)Projects funded pursuant to this section shall be selected on a competitive basis based on the extent to which a project meets one or more of the following criteria:
(A)Is cost effective.
(B)Provides public benefits.
(C)Includes one or more partnerships between the state, federal government, and local agencies.
(D)Benefits public safety under the State Plan of Flood Control or provides another flood protection benefit.
(E)Serves a larger population.
(F)Enhances the safety of dams identified as high hazard or extremely high hazard by the departments Division of Safety of Dams.
(2)Projects meeting multiple criteria specified in paragraph (1) shall be given preference for funding.
(e)A nonstate grant cost share of at least 50 percent shall be required for projects funded pursuant to this section. Federal funding and other state loans may be used as nonstate grant cost share. The nonstate grant cost share requirement may be waived or reduced for projects that benefit disadvantaged communities. No more than 5 percent of any amount appropriated to the program shall be used by the department for the administration of the program.
(f)The department shall consider a reasonable balance in the geographic allocation of funding under this section to eligible projects throughout the state, including both northern and southern California.
(g)For purposes of this section, the following definitions apply:(1)Disadvantaged community means a community with a median household income of less than 80 percent of the statewide average.(2)Local agency means a city, county, special district, joint powers authority, or other political subdivision of the state.86129.Costs allowable under this chapter include costs incidentally but directly related to construction or acquisition, including, but not limited to, planning, engineering, construction management, architectural, and other design work, environmental impact reports and assessments, required mitigation expenses, appraisals, legal expenses, site acquisitions, and necessary easements.
3.Fiscal Provisions86130.(a)Bonds in the total amount of six billion dollars ($6,000,000,000), and any additional bonds authorized, issued, and appropriated in accordance with this division pursuant to other provisions of law, not including the amount of any refunding bonds issued in accordance with Section 86142, 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 in the amount determined by the committee to be necessary or desirable pursuant to Section 86133. 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.
86131.The bonds authorized by this division shall be prepared, executed, issued, sold, paid, and redeemed as provided in the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), as amended from time to time, 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 that subdivisions (a) and (b) of Section 16727 of the Government Code shall not apply.
86132.(a)Solely for the purpose of authorizing the issuance and sale, pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), of the bonds authorized by this division, the California Disaster Preparedness and Flood Prevention Finance Committee is hereby created. For purposes of this division, the California Disaster Preparedness and Flood Prevention 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 law, any member may designate a representative to act as that member in the members 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.
86133.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.
86134.For purposes of 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), board, as defined in Section 16722 of the Government Code, means the Secretary of the Natural Resources Agency.
86135.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.
86136.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, and without regard to fiscal years, 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 86139.
86137.The board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, including other authorized forms of interim financing that include, but are not limited to, commercial paper, 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, excluding refunding bonds authorized pursuant to Section 86142, less any amount loaned and not yet repaid pursuant to this section and withdrawn from the General Fund pursuant to Section 86139 and not yet returned to the General Fund. 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.
86138.Notwithstanding any other provision of this division, or of 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), if the Treasurer sells bonds pursuant to this chapter 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.
86139.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, excluding refunding bonds authorized pursuant to Section 86142, less any amount loaned pursuant to Section 86137 and not yet repaid and any amount withdrawn from the General Fund pursuant to this section and not yet returned to the General Fund. Any amounts withdrawn shall be deposited in the 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.
86140.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.
86141.Pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), 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 allocated proportionally to each program funded through this division by the applicable bond sale.
86142.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, sale, or exchange 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.
86143.The proceeds from the sale of bonds authorized by this division are not proceeds of taxes as that term is used in Article XIIIB of the California Constitution, and the disbursement of these proceeds is not subject to the limitations imposed by that article.
SEC. 2.Section 1 of this act shall be submitted by the Secretary of State to the voters at the November 5, 2024, statewide general election. Section 1 of this act shall take effect upon the approval by the voters of the Climate Resiliency and Flood Protection Bond Act of 2024, as set forth in Section 1 of this act.
SEC. 3.(a)Section 1 of this act shall be submitted to the voters at the November 5, 2024, statewide general election in accordance with provisions of the Government Code and the Elections Code governing the submission of a statewide measure to the voters.
(b)The Secretary of State shall include in the ballot pamphlets mailed pursuant to Section 9094 of the Elections Code the information specified in Section 9084 of the Elections Code regarding Section 1 of this act. If that inclusion is not possible, the Secretary of State shall publish a supplemental ballot pamphlet regarding Section 1 of this act to be mailed with the ballot pamphlet. If the supplemental ballot pamphlet cannot be mailed with the ballot pamphlet, the supplemental ballot pamphlet shall be mailed separately.
(c)Notwithstanding Section 9054 of the Elections Code or any other law, the translations of the ballot title and the condensed statement of the ballot title required pursuant to Section 9054 of the Elections Code for Section 1 of this act may be made available for public examination at a later date than the start of the public examination period for the ballot pamphlet.
SEC. 4.The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 5.This act shall become operative only if Senate Bill 867 of the 202324 Regular Session is enacted and takes effect on or before January 1, 2024.
This division shall be known, and may be cited, as the Climate Resiliency and Flood Protection Bond Act of 2024.
86001.The people of California find and declare all of the following:
(a)Californias central valley continues to have one of the highest flood risks in the nation. A series of atmospheric river and arctic storms impacted California at the end of 2022 and beginning of 2023 with rounds of heavy rain and mountain snow that caused flooding and mudslides with each passing storm. Surging water levels on local rivers and streams led to loss of life and property damage in both protected and unprotected areas. State, regional, and local highways and roads were inundated and impassable. Rising waters tested levee systems in urban areas, breached levees in rural areas, and caused rivers and streams to overflow their banks throughout the state.
(b)Climate change is impacting California in unprecedented ways, including intensifying wildfires, mud slides, floods and drought, sea level rise, and extreme heat, that threaten jobs and economic security, the safety of our communities, and cultural and natural resources.
(c)Actions must be accelerated to enable the state to adapt and become more resilient to the impacts of climate change, including investing in flood system improvements and expanding nature-based solutions.
(d)The Department of Water Resources projects wetter, warmer future conditions and estimates that runoff from historical record storm events will significantly increase by up to 56 percent in the Sacramento River and 116 percent in the San Joaquin River. Projections for a simulated one in 200-year event predict peaks flows five times greater flowing towards the Sacramento-San Joaquin Delta from the San Joaquin River alone.
(e)Researchers at the University of California, Los Angeles have concluded that climate change has already doubled the likelihood of an event capable of producing catastrophic flooding, and that even larger future increases are likely due to continued warming. River and stream runoff in a future extreme storm scenario is two to four times greater than historical values in the Sierra Nevada Mountains due to increased precipitation rates and decreased amounts of snow.
(f)More than 95 percent of the State Plan of Flood Control levee miles have failed federal inspections, which at one time this decade resulted in nearly one-half of the levee miles being ineligible for federal rehabilitation assistance. The 2022 Central Valley Flood Protection Plan update calls for a total investment of $25 billion to $30 billion over 30 years.
(g)More than 1,320,000 people are at risk in central valley floodplains, and that population is projected to grow to 1,700,000 by 2072. In addition, the central valley is one of the worlds most productive agricultural regions, accounting for over $40 billion in gross value of agricultural production from a diversity of commodities. Interstate, regional, and local transportation routes are also threatened. Without adequate investment in the flood control system, California may expect as much as $3.2 billion in damages in the central valley and 500 deaths on average per year by 2072.
(h)The State of California is responsible for alleviating its liability in the event of a failure of State Plan of Flood Control facilities in the central valley. With over $80 billion in damageable property currently protected by these facilities, there is a significant risk to the General Fund, should the state fail to properly operate, maintain, and improve the flood control system. As the state assumes greater liability for levee breaches, Californias flood protection system is facing unprecedented changes, including increasing development and population growth in the floodplain, rising flood peaks, higher costs that delay fixing problem levee sites, and the need for environmental protection. One court ruling, Paterno v. State of California (1999) 74 Cal.App.4th 68, involved some 3,000 plaintiffs and found the state liable for potentially hundreds of millions of dollars. By 2007, California had paid $464 million for damages due to one levee failure.
(i)In April 2019, Governor Newsom directed state agencies through Executive Order N-10-19 to develop a water resilience portfolio, described as a set of action to meet Californias water needs through the 21st century. The California Water Resilience Portfolio, released in 2020, supports implementation of the Central Valley Flood Protection Plan and its state systemwide investment approach to protect urban areas, small communities, and rural areas; improve operations and maintenance of the flood system; and integrate natural systems into flood risk reduction projects. The Central Valley Flood Protection Plan accounts for the projected impacts of climate change in order to protect vulnerable communities and infrastructure and restore floodplains along the San Joaquin River and its tributaries.
(j)The Central Valley Flood Protection Act of 2008 directs the Department of Water Resources to prepare a Central Valley Flood Protection Plan and subsequent updates to be adopted by the Central Valley Flood Protection Board. The 2012 plan laid the framework of a systemwide approach for flood risk management in Californias central valley. The 2017 plan update further refined the systemwide approach to detail the ongoing need for investments in flood risk reduction, addressed actions that prioritized a multibenefit approach for flood risk reduction that protects and restores biodiversity while stewarding natural and working lands, building climate resilience, and supporting economic sustainability.
(k)There is a lack of readily available state and federal mitigation needed to implement flood risk reduction projects. The lack of mitigation can expose citizens to flood risk longer than necessary by delaying project implementation and increasing project costs.
(l)Through the 2022 update to the Central Valley Flood Protection Plan, the Central Valley Flood Protection Board affirmed a commitment to diversity, equity, and inclusion that recognizes that all people of Californias central valley deserve equitable flood protection, regardless of ability, age, ethnicity, gender, race, religion, sexual orientation, socioeconomic status, or any social or cultural identifier. The 2022 update calls for a total investment of $25 billion to $30 billion in the central valley flood control system over 30 years.
(m)Roughly 1,115 miles of levees protect farms, cities, schools and people in and around the Sacramento-San Joaquin Delta (Delta). State investment in Delta levees reduces risk to people, property, and infrastructure, including pipelines, electricity transmission, highways, and rail lines. Delta levees protect high-value nontidal habitat and islands and tracts that contribute to the cultural, recreational, natural resource, and agricultural qualities that distinguish the Delta and Suisun Marsh. Widespread flooding due to levee failure could force a long-term shutdown of the State Water Project and federal Central Valley Project pumps in the south Delta that supply much of California with water.
(n)The risk of more severe flooding is not limited to the central valley. All areas of the state, including urban areas outside of the central valley and coastal watersheds, are increasingly at risk of severe damages now and in the future due to more frequent and intense atmospheric river events. Atmospheric rivers play a major role in Californias rain season producing between one-quarter and one-half of our states annual precipitation. Rain and snow amounts can vary widely depending on the exact location, timing, and moisture content of an atmospheric river.
86002.For purposes of this division, the following definitions apply:
(a)Board means the Central Valley Flood Protection Board.
(b)Delta means the area of the Sacramento-San Joaquin Delta as defined in Section 12220.
(c)Delta conveyance facilities means facilities that convey water directly from the Sacramento River to the State Water Project or the federal Central Valley Project pumping facilities in the south Delta.
(d)Department means the Department of Water Resources.
(e)Disadvantaged community means a community with an annual median household income that is less than 80 percent of the statewide annual median household income.
(f)Facilities of the State Plan of Flood Control means the levees, weirs, channels, and other features of the federal and state authorized flood control facilities located in the Sacramento and San Joaquin River drainage basin for which the board or the department has given the assurances of nonfederal cooperation to the United States required for the project, and those facilities identified in Section 8361.
(g)Nonprofit organization means any nonprofit corporation formed pursuant to the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code) and qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(h)Nonurbanized area means a developed area or an area outside a developed area as defined under subdivision (f) of Section 65007 of the Government Code.
(i)Project levees means the levees that are part of the Facilities of the State Plan of Flood Control.
(j)State Plan of Flood Control means the state and federal flood control works, lands, programs, plans, conditions, and mode of maintenance and operations of the Sacramento River Flood Control Project described in Section 8350 of the Water Code, as may be amended from time to time, and of flood control projects in the Sacramento River and San Joaquin River watersheds authorized pursuant to Article 2 (commencing with Section 12645) of Chapter 2 of Part 6 of Division 6, as may be amended from time to time, for which the board or the department has provided the assurances of nonfederal cooperation to the United States, which shall be updated by the department and compiled into a single document entitled The State Plan of Flood Control.
(k)Undeveloped area means an area as defined under paragraph (2) of subdivision (c) of Section 8307.
(l)Urban area means any contiguous area in which more than 10,000 residents are protected by project levees.
86003.(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 size of grants to be awarded.
(b)The department shall conduct three public meetings to consider public comments before finalizing the guidelines. The department shall publish the draft solicitation and evaluation guidelines on its internet website at least 30 days before the public meetings. One meeting shall be conducted at a location in northern California, one meeting shall be conducted at a location in the San Joaquin Valley of California, and one meeting shall be conducted at a location in southern California. The department shall provide outreach to disadvantaged communities to promote access and participation in those meetings. Upon adoption, the department shall transmit copies of the guidelines to the fiscal committees and the appropriate policy committees of the Legislature.
86004.(a)The department may authorize advance payments to local agencies for projects that have at least one of the following project purposes: restoring habitat for threatened and endangered species under state or federal law or improving flood protection. The amount of funds advanced by the department to the local agency at any one time shall not exceed 25 percent of the entire amount authorized to be provided under the funding agreement between the department and the local agency. The department may exceed the 25-percent limit if it determines that the project requires a larger advance, and the local agency provides sufficient justification and documentation to the department. In light of the states interest in these projects, the department may reduce or eliminate any retention that would otherwise be withheld under the funding agreement.
(b)For purposes of this section, advance payments are funds that are provided to a local agency before the local agency has incurred expenses in furtherance of a project described in subdivision (a) and that are provided by the department to allow the local agency to fund the project on a cash flow basis.
(c)The department shall do all of the following:
(1)Prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities with modest reserves and potential cashflow problems.
(2)Stipulate an advance payment structure and request process within the grant agreement or contract between the department and local agency.
(3)Adopt requirements regarding the use of the advance payment to ensure that the funds are used properly.
86005.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.
86006.(a)Except as provided in subdivision (b), up to 10 percent of funds allocated for each program funded by this division may be expended, including, but not limited to, by grants, 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 for preliminary plans, working drawings, and construction as defined in the annual Budget Act for a capital outlay project or grant project. Planning may include feasibility studies for environmental site cleanup that would further the purpose of a project that is eligible for funding under this division. Monitoring may include measuring greenhouse gas emissions reductions and carbon sequestration associated with program expenditures under this division.
(b)Funds used for planning projects that benefit disadvantaged communities may exceed 10 percent of the funds allocated if the department determines that there is a need for the additional funding.
86007.(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 agencys internet website in a downloadable spreadsheet format. The spreadsheet shall include information about the location and footprint of each funded project, the projects objectives, the status of the project, anticipated outcomes, any matching moneys provided for the project by the grant recipient, and the applicable chapter of this division pursuant to which the grant recipient received moneys.
(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 department shall require adequate reporting of the expenditures of the funding from the grant.
(d)The costs associated with the publications, audits, statewide bond tracking, cash management, and related oversight activities provided for in this section shall be funded from this division. These costs shall be shared proportionally by each program through this division.
86008.Funds provided by this division shall not be expended to pay the costs of the design, construction, operation, mitigation, or maintenance of Delta conveyance facilities.
2.Climate Resiliency and Flood Protection86100.The sum of six billion dollars ($6,000,000,000) shall be available, upon appropriation by the Legislature, for flood protection and climate resiliency projects pursuant to this chapter.
86105.Of the funds made available by Section 86100, two billion five hundred million dollars ($2,500,000,000) shall be available to the department, upon appropriation by the Legislature from the fund, for the following purposes:
(a)The evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses, and facilities of the State Plan of Flood Control, including, but not limited to, all of the following:
(1)Restoring the design capacity of bypasses.
(2)Repairing erosion sites and removing sediment from channels or bypasses.
(3)Evaluating and repairing levees and any other facilities of the State Plan of Flood Control.
(4)Implementing mitigation measures for a project undertaken pursuant to this subdivision, including funding for an endowment to maintain such measures. The department may fund participation in a natural community conservation plan pursuant to Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code, as may be amended from time to time, or a habitat conservation plan under Section 10(a)(1)(B) of the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), as may be amended from time to time, to facilitate projects authorized by this subdivision.
(5)Improving or adding facilities that are not a part of the State Plan of Flood Control that protect areas that are also protected by the State Plan of Flood Control.
(6)Implementing actions consistent with the Central Valley Flood Protection Plan 2022 Update, and subsequent updates, including the Plans Conservation Strategy.
(7)Flood emergency response projects.
(b)Improving or adding facilities to the State Plan of Flood Control to increase levels of flood protection and climate resiliency, including all related costs for mitigation and infrastructure relocation. Funds made available by this subdivision may be expended for state financial participation in federal and state authorized flood control projects, feasibility studies and design of federal flood damage reduction and related projects, improving the capacity of bypasses, reservoir reparation, and flood managed aquifer recharge projects.
(c)Of the funds provided in this section, not less than three hundred million dollars ($300,000,000) shall be available to increase flood protection and climate resiliency for the repair, rehabilitation, reconstruction, replacement, or improvement of levees that protect nonurbanized areas and undeveloped areas, including the repair, improvement, or setback of bypass levees.
(d)Of the funds provided in this section, not less than five hundred million dollars ($500,000,000) shall be available to increase flood protection and climate resiliency for the repair, rehabilitation, reconstruction, replacement, or improvement of levees of the San Joaquin River and its tributaries.
(e)In expending funds provided in this section, the department shall do both of the following:
(1)Collaborate with local agencies to secure the maximum feasible amounts of federal and local matching funds to fund disaster preparedness and flood prevention projects in order to ensure prudent and cost-effective use of these funds to the extent that this does not prohibit timely implementation of this division.
(2)Prioritize project selection and project design to achieve maximum public benefits from the use of these funds.
86110.(a)Of the funds made available by Section 86100, five hundred million dollars ($500,000,000) shall be available, upon appropriation by the Legislature, to the department for projects in the Delta to increase flood protection and climate resiliency. The funds shall be expended for all of the following purposes:
(1)Local assistance under the delta levee maintenance subventions program under Part 9 (commencing with Section 12980) of Division 6, as that part may be amended.
(2)Special flood protection projects under Chapter 2 (commencing with Section 12310) of Part 4.8 of Division 6, as that chapter may be amended.
(3)Flood emergency response projects.
(b)Projects that are undertaken pursuant to paragraph (2) of subdivision (a) shall have as their principal purpose the preservation, protection, rehabilitation, and improvement of existing levees to better protect against the threat of earthquake and sea level rise with improved engineering standards to allow for progressive rehabilitation and improvement to maintain an adequate factor of safety. Other project purposes may include, but not be limited to, the following:
(1)Improving the protection for quality of drinking water supplies derived from the Delta.
(2)Reducing salts contained in Delta water and delivered to, and often retained in, agricultural areas.
(3)Maintaining water quality for Delta users.
(4)Assisting in preserving Delta lands, including terrestrial and aquatic habitats important for listed or candidate species under the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), as may be amended from time to time, the California Endangered Species Act, as may be amended from time to time, and waterfowl of the Pacific flyway.
(5)Protecting water rights of the area of origin and the environments of the Sacramento-San Joaquin river systems.
(6)Protecting highways, utility facilities, and other infrastructure located within the Delta.
(7)Preventing the disruption of water supplies derived from the Sacramento-San Joaquin Delta.
(8)Protecting the critical evacuation and national defense routes for the region.
86115.Of the funds made available by Section 86100, the sum of one billion dollars ($1,000,000,000) shall be available, upon appropriation by the Legislature, to the department for payment for the states share of the nonfederal costs, and related costs, of flood protection and climate resiliency projects authorized under any of the following:
(a)The State Water Resources Law of 1945 (Chapter 1 (commencing with Section 12570) and Chapter 2 (commencing with Section 12639) of Part 6 of Division 6), as may be amended from time to time.
(b)The Flood Control Law of 1946 (Chapter 3 (commencing with Section 12800) of Part 6 of Division 6), as may be amended from time to time.
(c)The California Watershed Protection and Flood Prevention Law (Chapter 4 (commencing with Section 12850) of Part 6 of Division 6), as may be amended from time to time.
(d)The costs described in subdivision (a) include costs incurred in connection with either of the following:
(1)The granting of credits or loans to local agencies, as applicable, pursuant to Sections 12585.3 and 12585.4 of, subdivision (d) of Section 12585.5 of, and Sections 12866.3 and 12866.4 of, the Water Code, as may be amended from time to time.
(2)The implementation of Chapter 3.5 (commencing with Section 12840) of Part 6 of Division 6, as may be amended from time to time.
(e)The funds made available by this section shall be allocated only to projects that are not part of the State Plan of Flood Control.
86120.(a)Of the funds made available by Section 86100, one billion dollars ($1,000,000,000) shall be available, upon appropriation by the Legislature, to the department for flood management projects that are components of multiple benefit flood management system improvements that reduce risks to public safety, provide greater resiliency from the effects of climate change, extreme weather events, and sea level rise, and provide improvement to aquatic and wildlife habitat. The department shall coordinate the expenditure of multibenefit funds with the board and the Department of Fish and Wildlife. Where practical, the department shall collaborate with nonprofit organizations and nongovernmental organizations to inform the expenditure of these funds. Eligible project types include, but are not limited to, levee setbacks, projects connecting rivers with flood plains, enhancement of flood plains and bypasses, groundwater recharge, and land acquisitions and easements necessary for these project types. Eligible projects include any of the following:
(1)Multiple benefit flood management projects that reduce the impacts of climate change on inland or coastal infrastructure, communities, or ecosystems, and provide ecosystem, wildlife, or groundwater recharge benefits.
(2)Natural infrastructure projects to reduce flood intensity and slow watershed runoff.
(3)Projects that provide matching grants for, or otherwise leverage funding from, the Federal Emergency Management Agency, the United States Army Corps of Engineers, or other federal mitigation and resilience funding.
(4)Projects that provide benefits to fish, waterfowl, wildlife, and anadromous and other native fish species along migratory corridors.
(5)Projects that restore streams to a more natural state by removing drainage obstructions, culverts, and paved channels to enable more stormwater to be absorbed and gradually released by soil and plants.
(6)Acquiring easements and other interests in real property to protect or enhance flood protection corridors and bypasses while preserving or enhancing the agricultural use of the real property.
(7)Constructing new levees necessary for the establishment of a flood protection corridor or bypass.
(8)Setting back existing flood control levees, and in conjunction with undertaking those setbacks, strengthening or modifying existing levees and weirs.
(9)Relocating or floodproofing structures necessary for the establishment of a flood protection corridor.
(10)Acquiring interests in, or providing incentives for maintaining agricultural uses of, real property that is in a flood plain that cannot reasonably be made safe from future flooding.
(11)Acquiring easements and other interests in real property to protect or enhance flood protection corridors while preserving or enhancing the wildlife value of the real property.
(b)Of the funds made available pursuant to this section, one hundred million dollars ($100,000,000) shall be allocated for multiple benefit flood management projects in urban coastal watersheds.
86125.(a)Of the funds made available by Section 86100, one billion dollars ($1,000,000,000) shall be available to the department to provide state funding to local agencies for replacement, repairs, rehabilitation, improvements, and other dam safety projects at existing dams and associated facilities.
(b)Projects eligible to receive funding include, but are not limited to, all of the following:
(1)Dam safety projects at existing dams designated as high hazard or extremely high hazard by the departments Division of Safety of Dams.
(2)New spillway and repair projects at existing dams.
(3)Improvement projects at existing dams to facilitate implementation of forecast-informed reservoir operations.
(4)Reservoir seismic retrofit projects.
(5)Flood risk reduction projects associated with the dam safety projects described in paragraph (1).
(6)One-time projects to remove sediment resulting from wildfires or extraordinary storm events.
(c)Funding for dam safety improvement projects shall provide one or more of the following public benefits:
(1)Protection of public safety.
(2)Restoration of water storage design capacity.
(3)Enhancement of water supply reliability.
(4)Implementation of forecast-informed reservoir operations.
(5)Enhancement, protection, or restoration of habitat for fish and wildlife.
(6)Protection of water quality.
(7)Flood risk reduction.
(d)(1)Projects funded pursuant to this section shall be selected on a competitive basis based on the extent to which a project meets one or more of the following criteria:
(A)Is cost effective.
(B)Provides public benefits.
(C)Includes one or more partnerships between the state, federal government, and local agencies.
(D)Benefits public safety under the State Plan of Flood Control or provides another flood protection benefit.
(E)Serves a larger population.
(F)Enhances the safety of dams identified as high hazard or extremely high hazard by the departments Division of Safety of Dams.
(2)Projects meeting multiple criteria specified in paragraph (1) shall be given preference for funding.
(e)A nonstate grant cost share of at least 50 percent shall be required for projects funded pursuant to this section. Federal funding and other state loans may be used as nonstate grant cost share. The nonstate grant cost share requirement may be waived or reduced for projects that benefit disadvantaged communities. No more than 5 percent of any amount appropriated to the program shall be used by the department for the administration of the program.
(f)The department shall consider a reasonable balance in the geographic allocation of funding under this section to eligible projects throughout the state, including both northern and southern California.
(g)For purposes of this section, the following definitions apply:
(1)Disadvantaged community means a community with a median household income of less than 80 percent of the statewide average.
(2)Local agency means a city, county, special district, joint powers authority, or other political subdivision of the state.
86129.Costs allowable under this chapter include costs incidentally but directly related to construction or acquisition, including, but not limited to, planning, engineering, construction management, architectural, and other design work, environmental impact reports and assessments, required mitigation expenses, appraisals, legal expenses, site acquisitions, and necessary easements.
3.Fiscal Provisions86130.(a)Bonds in the total amount of six billion dollars ($6,000,000,000), and any additional bonds authorized, issued, and appropriated in accordance with this division pursuant to other provisions of law, not including the amount of any refunding bonds issued in accordance with Section 86142, 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 in the amount determined by the committee to be necessary or desirable pursuant to Section 86133. 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.
86131.The bonds authorized by this division shall be prepared, executed, issued, sold, paid, and redeemed as provided in the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), as amended from time to time, 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 that subdivisions (a) and (b) of Section 16727 of the Government Code shall not apply.
86132.(a)Solely for the purpose of authorizing the issuance and sale, pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), of the bonds authorized by this division, the California Disaster Preparedness and Flood Prevention Finance Committee is hereby created. For purposes of this division, the California Disaster Preparedness and Flood Prevention 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 law, any member may designate a representative to act as that member in the members 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.
86133.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.
86134.For purposes of 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), board, as defined in Section 16722 of the Government Code, means the Secretary of the Natural Resources Agency.
86135.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.
86136.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, and without regard to fiscal years, 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 86139.
86137.The board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, including other authorized forms of interim financing that include, but are not limited to, commercial paper, 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, excluding refunding bonds authorized pursuant to Section 86142, less any amount loaned and not yet repaid pursuant to this section and withdrawn from the General Fund pursuant to Section 86139 and not yet returned to the General Fund. 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.
86138.Notwithstanding any other provision of this division, or of 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), if the Treasurer sells bonds pursuant to this chapter 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.
86139.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, excluding refunding bonds authorized pursuant to Section 86142, less any amount loaned pursuant to Section 86137 and not yet repaid and any amount withdrawn from the General Fund pursuant to this section and not yet returned to the General Fund. Any amounts withdrawn shall be deposited in the 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.
86140.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.
86141.Pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), 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 allocated proportionally to each program funded through this division by the applicable bond sale.
86142.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, sale, or exchange 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.
86143.The proceeds from the sale of bonds authorized by this division are not proceeds of taxes as that term is used in Article XIIIB of the California Constitution, and the disbursement of these proceeds is not subject to the limitations imposed by that article.
SEC. 2.Section 1 of this act shall be submitted by the Secretary of State to the voters at the November 5, 2024, statewide general election. Section 1 of this act shall take effect upon the approval by the voters of the Climate Resiliency and Flood Protection Bond Act of 2024, as set forth in Section 1 of this act.
SEC. 3.(a)Section 1 of this act shall be submitted to the voters at the November 5, 2024, statewide general election in accordance with provisions of the Government Code and the Elections Code governing the submission of a statewide measure to the voters.
(b)The Secretary of State shall include in the ballot pamphlets mailed pursuant to Section 9094 of the Elections Code the information specified in Section 9084 of the Elections Code regarding Section 1 of this act. If that inclusion is not possible, the Secretary of State shall publish a supplemental ballot pamphlet regarding Section 1 of this act to be mailed with the ballot pamphlet. If the supplemental ballot pamphlet cannot be mailed with the ballot pamphlet, the supplemental ballot pamphlet shall be mailed separately.
(c)Notwithstanding Section 9054 of the Elections Code or any other law, the translations of the ballot title and the condensed statement of the ballot title required pursuant to Section 9054 of the Elections Code for Section 1 of this act may be made available for public examination at a later date than the start of the public examination period for the ballot pamphlet.
SEC. 4.The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
SEC. 5.This act shall become operative only if Senate Bill 867 of the 202324 Regular Session is enacted and takes effect on or before January 1, 2024.
This division shall be known, and may be cited, as the Climate Resiliency and Flood Protection Bond Act of 2024.
86001.The people of California find and declare all of the following:
(a)Californias central valley continues to have one of the highest flood risks in the nation. A series of atmospheric river and arctic storms impacted California at the end of 2022 and beginning of 2023 with rounds of heavy rain and mountain snow that caused flooding and mudslides with each passing storm. Surging water levels on local rivers and streams led to loss of life and property damage in both protected and unprotected areas. State, regional, and local highways and roads were inundated and impassable. Rising waters tested levee systems in urban areas, breached levees in rural areas, and caused rivers and streams to overflow their banks throughout the state.
(b)Climate change is impacting California in unprecedented ways, including intensifying wildfires, mud slides, floods and drought, sea level rise, and extreme heat, that threaten jobs and economic security, the safety of our communities, and cultural and natural resources.
(c)Actions must be accelerated to enable the state to adapt and become more resilient to the impacts of climate change, including investing in flood system improvements and expanding nature-based solutions.
(d)The Department of Water Resources projects wetter, warmer future conditions and estimates that runoff from historical record storm events will significantly increase by up to 56 percent in the Sacramento River and 116 percent in the San Joaquin River. Projections for a simulated one in 200-year event predict peaks flows five times greater flowing towards the Sacramento-San Joaquin Delta from the San Joaquin River alone.
(e)Researchers at the University of California, Los Angeles have concluded that climate change has already doubled the likelihood of an event capable of producing catastrophic flooding, and that even larger future increases are likely due to continued warming. River and stream runoff in a future extreme storm scenario is two to four times greater than historical values in the Sierra Nevada Mountains due to increased precipitation rates and decreased amounts of snow.
(f)More than 95 percent of the State Plan of Flood Control levee miles have failed federal inspections, which at one time this decade resulted in nearly one-half of the levee miles being ineligible for federal rehabilitation assistance. The 2022 Central Valley Flood Protection Plan update calls for a total investment of $25 billion to $30 billion over 30 years. Without adequate investment in the flood system, California may expect as much as $3.2 billion in damages within the Central Valley and 500 deaths on average per year by 2072.
(g)More than 1,320,000 people are at risk in Central Valley floodplains, and that population is projected to grow to 1,700,000 by 2072. State and local funding for flood control facility operations and maintenance, as well as flood control system improvements, remain well below the total projected costs necessary to protect lives and property and the natural environment.(g)More than 1,320,000 people are at risk in central valley floodplains, and that population is projected to grow to 1,700,000 by 2072. In addition, the central valley is one of the worlds most productive agricultural regions, accounting for over $40 billion in gross value of agricultural production from a diversity of commodities. Interstate, regional, and local transportation routes are also threatened. Without adequate investment in the flood control system, California may expect as much as $3.2 billion in damages in the central valley and 500 deaths on average per year by 2072.
(h)The State of California is responsible for alleviating its liability in the event of a failure of State Plan of Flood Control facilities in the central valley. With over $80 billion in damageable property currently protected by these facilities, there is a significant risk to the General Fund, should the state fail to properly operate, maintain, and improve the flood control system. As the state assumes greater liability for levee breaches, Californias flood protection system is facing unprecedented changes, including increasing development and population growth in the floodplain, rising flood peaks, higher costs that delay fixing problem levee sites, and the need for environmental protection. One court ruling, Paterno v. State of California (1999) 74 Cal.App.4th 68, involved some 3,000 plaintiffs and found the state liable for potentially hundreds of millions of dollars. By 2007, California had paid $464 million for damages due to one levee failure.
(i)In April 2019, Governor Newsom directed state agencies through Executive Order N-10-19 to develop a water resilience portfolio, described as a set of action to meet Californias water needs through the 21st century. The California Water Resilience Portfolio, released in 2020, supports implementation of the Central Valley Flood Protection Plan and its state systemwide investment approach to protect urban areas, small communities, and rural areas; improve operations and maintenance of the flood system; and integrate natural systems into flood risk reduction projects. The Central Valley Flood Protection Plan accounts for the projected impacts of climate change in order to protect vulnerable communities and infrastructure and restore floodplains along the San Joaquin River and its tributaries.
(j)The Central Valley Flood Protection Act of 2008 directs the Department of Water Resources to prepare a Central Valley Flood Protection Plan and subsequent updates to be adopted by the Central Valley Flood Protection Board. The 2012 plan laid the framework of a systemwide approach for flood risk management in Californias central valley. The 2017 plan update further refined the systemwide approach to detail the ongoing need for investments in flood risk reduction, addressed actions that prioritized a multibenefit approach for flood risk reduction that protects and restores biodiversity while stewarding natural and working lands, building climate resilience, and supporting economic sustainability.
(k)There is a lack of readily available state and federal mitigation needed to implement flood risk reduction projects. The lack of mitigation can expose citizens to flood risk longer than necessary by delaying project implementation and increasing project costs.
(l)Through the 2022 update to the Central Valley Flood Protection Plan, the Central Valley Flood Protection Board affirmed a commitment to diversity, equity, and inclusion that recognizes that all people of Californias central valley deserve equitable flood protection, regardless of ability, age, ethnicity, gender, race, religion, sexual orientation, socioeconomic status, or any social or cultural identifier. The 2022 update calls for a total investment of $25 billion to $30 billion in the central valley flood control system over 30 years.
(m)Roughly 1,115 miles of levees protect farms, cities, schools and people in and around the Sacramento-San Joaquin Delta (Delta). State investment in Delta levees reduces risk to people, property, and infrastructure, including pipelines, electricity transmission, highways, and rail lines. Delta levees protect high-value nontidal habitat and islands and tracts that contribute to the cultural, recreational, natural resource, and agricultural qualities that distinguish the Delta and Suisun Marsh. Widespread flooding due to levee failure could force a long-term shutdown of the State Water Project and federal Central Valley Project pumps in the south Delta that supply much of California with water.
(n)The risk of more severe flooding is not limited to the central valley. All areas of the state, including urban areas outside of the central valley and coastal watersheds, are increasingly at risk of severe damages now and in the future due to more frequent and intense atmospheric river events. Atmospheric rivers play a major role in Californias rain season producing between one-quarter and one-half of our states annual precipitation. Rain and snow amounts can vary widely depending on the exact location, timing, and moisture content of an atmospheric river.
86002.For purposes of this division, the following definitions apply:
(a)Board means the Central Valley Flood Protection Board.
(b)Delta means the area of the Sacramento-San Joaquin Delta as defined in Section 12220.
(c)Delta conveyance facilities means facilities that convey water directly from the Sacramento River to the State Water Project or the federal Central Valley Project pumping facilities in the south Delta.
(c)(d)Department means the Department of Water Resources.
(d)(e)Disadvantaged community means a community with an annual median household income that is less than 80 percent of the statewide annual median household income.
(e)(f)Facilities of the State Plan of Flood Control means the levees, weirs, channels, and other features of the federal and state authorized flood control facilities located in the Sacramento and San Joaquin River drainage basin for which the board or the department has given the assurances of nonfederal cooperation to the United States required for the project, and those facilities identified in Section 8361.
(f)(g)Nonprofit organization means any nonprofit corporation formed pursuant to the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code) and qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(g)(h)Nonurbanized area means a developed area or an area outside a developed area as defined under subdivision (f) of Section 65007 of the Government Code.
(h)(i)Project levees means the levees that are part of the Facilities of the State Plan of Flood Control.
(i)(j)State Plan of Flood Control means the state and federal flood control works, lands, programs, plans, conditions, and mode of maintenance and operations of the Sacramento River Flood Control Project described in Section 8350 of the Water Code, as may be amended from time to time, and of flood control projects in the Sacramento River and San Joaquin River watersheds authorized pursuant to Article 2 (commencing with Section 12645) of Chapter 2 of Part 6 of Division 6 6, as may be amended from time to time, for which the board or the department has provided the assurances of nonfederal cooperation to the United States, which shall be updated by the department and compiled into a single document entitled The State Plan of Flood Control.
(j)(k)Undeveloped area means an area as defined under paragraph (2) of subdivision (c) of Section 8307.
(k)(l)Urban area means any contiguous area in which more than 10,000 residents are protected by project levees.
86003.(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 size of grants to be awarded.
(b)The department shall conduct three public meetings to consider public comments before finalizing the guidelines. The department shall publish the draft solicitation and evaluation guidelines on its internet website at least 30 days before the public meetings. One meeting shall be conducted at a location in northern California, one meeting shall be conducted at a location in the San Joaquin Valley of California, and one meeting shall be conducted at a location in southern California. The department shall provide outreach to disadvantaged communities to promote access and participation in those meetings. Upon adoption, the department shall transmit copies of the guidelines to the fiscal committees and the appropriate policy committees of the Legislature.
86004.(a)The department may authorize advance payments to local agencies for projects that have at least one of the following project purposes: restoring habitat for threatened and endangered species under state or federal law or improving flood protection. The amount of funds advanced by the department to the local agency at any one time shall not exceed 25 percent of the entire amount authorized to be provided under the funding agreement between the department and the local agency. The department may exceed the 25-percent limit if it determines that the project requires a larger advance, and the local agency provides sufficient justification and documentation to the department. In light of the states interest in these projects, the department may reduce or eliminate any retention that would otherwise be withheld under the funding agreement.
(b)For purposes of this section, advance payments are funds that are provided to a local agency before the local agency has incurred expenses in furtherance of a project described in subdivision (a) and that are provided by the department to allow the local agency to fund the project on a cash flow basis.
(c)The department shall do all of the following:
(1)Prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities with modest reserves and potential cashflow problems.
(2)Stipulate an advance payment structure and request process within the grant agreement or contract between the department and local agency.
(3)Adopt requirements regarding the use of the advance payment to ensure that the funds are used properly.
86005.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.
86006.(a)Except as provided in subdivision (b), up to 10 percent of funds allocated for each program funded by this division may be expended, including, but not limited to, by grants, 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 for preliminary plans, working drawings, and construction as defined in the annual Budget Act for a capital outlay project or grant project. Planning may include feasibility studies for environmental site cleanup that would further the purpose of a project that is eligible for funding under this division. Monitoring may include measuring greenhouse gas emissions reductions and carbon sequestration associated with program expenditures under this division.
(b)Funds used for planning projects that benefit disadvantaged communities may exceed 10 percent of the funds allocated if the department determines that there is a need for the additional funding.
86007.(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 agencys internet website in a downloadable spreadsheet format. The spreadsheet shall include information about the location and footprint of each funded project, the projects objectives, the status of the project, anticipated outcomes, any matching moneys provided for the project by the grant recipient, and the applicable chapter of this division pursuant to which the grant recipient received moneys.
(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 department shall require adequate reporting of the expenditures of the funding from the grant.
(d)The costs associated with the publications, audits, statewide bond tracking, cash management, and related oversight activities provided for in this section shall be funded from this division. These costs shall be shared proportionally by each program through this division.
86008.Funds provided by this division shall not be expended to pay the costs of the design, construction, operation, mitigation, or maintenance of Delta conveyance facilities.
2.Climate Resiliency and Flood Protection86100.The sum of four billion five hundred million dollars ($4,500,000,000) six billion dollars ($6,000,000,000) shall be available, upon appropriation by the Legislature, for flood protection and climate resiliency projects pursuant to this chapter.
86101. 86105.Of the funds made available by Section 86100, two billion five hundred million dollars ($2,500,000,000) shall be available to the department, upon appropriation by the Legislature from the fund, for the following purposes:
(a)The evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses, and facilities of the State Plan of Flood Control, including, but not limited to, all of the following:
(1)Restoring the design capacity of bypasses.
(2)Repairing erosion sites and removing sediment from channels or bypasses.
(3)Evaluating and repairing levees and any other facilities of the State Plan of Flood Control.
(4)Implementing mitigation measures for a project undertaken pursuant to this subdivision, including funding for an endowment to maintain such measures. The department may fund participation in a natural community conservation plan pursuant to Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code, as may be amended from time to time, or a habitat conservation plan under Section 10(a)(1)(B) of the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), as may be amended from time to time, to facilitate projects authorized by this subdivision.
(5)Improving or adding facilities that are not a part of the State Plan of Flood Control that protect areas that are also protected by the State Plan of Flood Control.
(6)Implementing actions consistent with the Central Valley Flood Protection Plan 2022 Update, and subsequent updates, including the Plans Conservation Strategy.
(7)Flood emergency response projects.
(b)Improving or adding facilities to the State Plan of Flood Control to increase levels of flood protection and climate resiliency, including all related costs for mitigation and infrastructure relocation. Funds made available by this subdivision may be expended for state financial participation in federal and state authorized flood control projects, feasibility studies and design of federal flood damage reduction and related projects, improving the capacity of bypasses, reservoir reparation, and flood managed aquifer recharge projects. Not more than one hundred million dollars ($100,000,000) may be expended on a single project.
(c)Of the funds provided in this section, not less than two hundred million dollars ($200,000,000) three hundred million dollars ($300,000,000) shall be available to increase flood protection and climate resiliency for the repair, rehabilitation, reconstruction, replacement, or improvement of levees that protect nonurbanized areas and undeveloped areas, including the repair, improvement, or setback of bypass levees.
(d)Of the funds provided in this section, not less than two hundred million dollars ($200,000,000) five hundred million dollars ($500,000,000) shall be available to increase flood protection and climate resiliency for the repair, rehabilitation, reconstruction, replacement, or improvement of levees of the San Joaquin River and its tributaries.
(e)In expending funds provided in this section, the department shall do both of the following:
(1)Collaborate with local agencies to secure the maximum feasible amounts of federal and local matching funds to fund disaster preparedness and flood prevention projects in order to ensure prudent and cost-effective use of these funds to the extent that this does not prohibit timely implementation of this division.
(2)Prioritize project selection and project design to achieve maximum public benefits from the use of these funds.
86110.(a)Of the funds made available by Section 86100, five hundred million dollars ($500,000,000) shall be available, upon appropriation by the Legislature, to the department for projects in the Delta to increase flood protection and climate resiliency. The funds shall be expended for both all of the following purposes:
(1)Local assistance under the delta levee maintenance subventions program under Part 9 (commencing with Section 12980) of Division 6, as that part may be amended.
(2)Special flood protection projects under Chapter 2 (commencing with Section 12310) of Part 4.8 of Division 6, as that chapter may be amended.
(3)Flood emergency response projects.
(b)Projects that are undertaken pursuant to paragraph (2) of subdivision (a) shall have as their principal purpose the preservation, protection, rehabilitation, and improvement of existing levees to better protect against the threat of earthquake and sea level rise with improved engineering standards to allow for progressive rehabilitation and improvement to maintain an adequate factor of safety. Other project purposes may include, but not be limited to, the following:
(1)Improving the protection for quality of drinking water supplies derived from the Delta.
(2)Reducing salts contained in Delta water and delivered to, and often retained in, agricultural areas.
(3)Maintaining water quality for Delta users.
(4)Assisting in preserving Delta lands, including terrestrial and aquatic habitats important for listed or candidate species under the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), as may be amended from time to time, the California Endangered Species Act, as may be amended from time to time, and waterfowl of the Pacific flyway.
(5)Protecting water rights of the area of origin and the environments of the Sacramento-San Joaquin river systems.
(6)Protecting highways, utility facilities, and other infrastructure located within the Delta.
(7)Preventing the disruption of water supplies derived from the Sacramento-San Joaquin Delta.
(8)Protecting the critical evacuation and national defense routes for the region.
86120. 86115.Of the funds made available by Section 86100, the sum of one billion dollars ($1,000,000,000) shall be available, upon appropriation by the Legislature, to the department for payment for the states share of the nonfederal costs, and related costs, of flood protection and climate resiliency projects authorized under any of the following:
(a)The State Water Resources Law of 1945 (Chapter 1 (commencing with Section 12570) and Chapter 2 (commencing with Section 12639) of Part 6 of Division 6). 6), as may be amended from time to time.
(b)The Flood Control Law of 1946 (Chapter 3 (commencing with Section 12800) of Part 6 of Division 6). 6), as may be amended from time to time.
(c)The California Watershed Protection and Flood Prevention Law (Chapter 4 (commencing with Section 12850) of Part 6 of Division 6). 6), as may be amended from time to time.
(d)The costs described in subdivision (a) include costs incurred in connection with either of the following:
(1)The granting of credits or loans to local agencies, as applicable, pursuant to Sections 12585.3 and 12585.4 of, subdivision (d) of Section 12585.5 of, and Sections 12866.3 and 12866.4 of, the Water Code. Code, as may be amended from time to time.
(2)The implementation of Chapter 3.5 (commencing with Section 12840) of Part 6 of Division 6. 6, as may be amended from time to time.
(e)The funds made available by this section shall be allocated only to projects that are not part of the State Plan of Flood Control.
86125. 86120.(a)Of the funds made available by Section 86100, five hundred million dollars ($500,000,000) one billion dollars ($1,000,000,000) shall be available, upon appropriation by the Legislature, to the department for flood management projects that are components of multiple benefit flood management system improvements that reduce risks to public safety safety, provide greater resiliency from the effects of climate change, extreme weather events, and sea level rise, and provide improvement to aquatic and wildlife habitat. The department shall coordinate the expenditure of multibenefit funds with the board and the Department of Fish and Wildlife. Where practical, the department shall collaborate with nonprofit organizations and nongovernmental organizations to inform the expenditure of these funds. Eligible project types include, but are not limited to, levee setbacks, projects connecting rivers with flood plains, enhancement of flood plains and bypasses, groundwater recharge, and land acquisitions and easements necessary for these project types. Eligible projects include any of the following:
(1)Multiple benefit flood management projects that reduce the impacts of climate change on inland or coastal infrastructure, communities, or ecosystems, and provide ecosystem, wildlife, or groundwater recharge benefits.
(2)Natural infrastructure projects to reduce flood intensity and slow watershed runoff.
(3)Projects that provide matching grants for, or otherwise leverage funding from, the Federal Emergency Management Agency, the United States Army Corps of Engineers, or other federal mitigation and resilience funding.
(4)Projects that provide benefits to fish, waterfowl, wildlife, and anadromous and other native fish species along migratory corridors.
(5)Projects that restore streams to a more natural state by removing drainage obstructions, culverts, and paved channels to enable more stormwater to be absorbed and gradually released by soil and plants.
(6)Acquiring easements and other interests in real property to protect or enhance flood protection corridors and bypasses while preserving or enhancing the agricultural use of the real property.
(7)Constructing new levees necessary for the establishment of a flood protection corridor or bypass.
(8)Setting back existing flood control levees, and in conjunction with undertaking those setbacks, strengthening or modifying existing levees and weirs.
(9)Relocating or floodproofing structures necessary for the establishment of a flood protection corridor.
(10)Acquiring interests in, or providing incentives for maintaining agricultural uses of, real property that is in a flood plain that cannot reasonably be made safe from future flooding.
(11)Acquiring easements and other interests in real property to protect or enhance flood protection corridors while preserving or enhancing the wildlife value of the real property.
(b)Of the funds made available pursuant to this section, one hundred million dollars ($100,000,000) shall be allocated for multiple benefit flood management projects in urban coastal watersheds.
86125.(a)Of the funds made available by Section 86100, one billion dollars ($1,000,000,000) shall be available to the department to provide state funding to local agencies for replacement, repairs, rehabilitation, improvements, and other dam safety projects at existing dams and associated facilities.
(b)Projects eligible to receive funding include, but are not limited to, all of the following:
(1)Dam safety projects at existing dams designated as high hazard or extremely high hazard by the departments Division of Safety of Dams.
(2)New spillway and repair projects at existing dams.
(3)Improvement projects at existing dams to facilitate implementation of forecast-informed reservoir operations.
(4)Reservoir seismic retrofit projects.
(5)Flood risk reduction projects associated with the dam safety projects described in paragraph (1).
(6)One-time projects to remove sediment resulting from wildfires or extraordinary storm events.
(c)Funding for dam safety improvement projects shall provide one or more of the following public benefits:
(1)Protection of public safety.
(2)Restoration of water storage design capacity.
(3)Enhancement of water supply reliability.
(4)Implementation of forecast-informed reservoir operations.
(5)Enhancement, protection, or restoration of habitat for fish and wildlife.
(6)Protection of water quality.
(7)Flood risk reduction.
(d)(1)Projects funded pursuant to this section shall be selected on a competitive basis based on the extent to which a project meets one or more of the following criteria:
(A)Is cost effective.
(B)Provides public benefits.
(C)Includes one or more partnerships between the state, federal government, and local agencies.
(D)Benefits public safety under the State Plan of Flood Control or provides another flood protection benefit.
(E)Serves a larger population.
(F)Enhances the safety of dams identified as high hazard or extremely high hazard by the departments Division of Safety of Dams.
(2)Projects meeting multiple criteria specified in paragraph (1) shall be given preference for funding.
(e)A nonstate grant cost share of at least 50 percent shall be required for projects funded pursuant to this section. Federal funding and other state loans may be used as nonstate grant cost share. The nonstate grant cost share requirement may be waived or reduced for projects that benefit disadvantaged communities. No more than 5 percent of any amount appropriated to the program shall be used by the department for the administration of the program.
(f)The department shall consider a reasonable balance in the geographic allocation of funding under this section to eligible projects throughout the state, including both northern and southern California.
(g)For purposes of this section, the following definitions apply:
(1)Disadvantaged community means a community with a median household income of less than 80 percent of the statewide average.
(2)Local agency means a city, county, special district, joint powers authority, or other political subdivision of the state.
86129.Costs allowable under this chapter include costs incidentally but directly related to construction or acquisition, including, but not limited to, planning, engineering, construction management, architectural, and other design work, environmental impact reports and assessments, required mitigation expenses, appraisals, legal expenses, site acquisitions, and necessary easements.
3.Fiscal Provisions86130.(a)Bonds in the total amount of four billion five hundred million dollars ($4,500,000,000), six billion dollars ($6,000,000,000), and any additional bonds authorized, issued, and appropriated in accordance with this division pursuant to other provisions of law, not including the amount of any refunding bonds issued in accordance with Section 86142, 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 in the amount determined by the committee to be necessary or desirable pursuant to Section 86133. 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.
86131.The bonds authorized by this division shall be prepared, executed, issued, sold, paid, and redeemed as provided in the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), as amended from time to time, 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. division, except that subdivisions (a) and (b) of Section 16727 of the Government Code shall not apply.
86132.(a)Solely for the purpose of authorizing the issuance and sale, pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), of the bonds authorized by this division, the California Disaster Preparedness and Flood Prevention Finance Committee is hereby created. For purposes of this division, the California Disaster Preparedness and Flood Prevention 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 law, any member may designate a representative to act as that member in the members 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.
86133.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.
86134.For purposes of 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), board, as defined in Section 16722 of the Government Code, means the Secretary of the Natural Resources Agency.
86135.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.
86136.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, and without regard to fiscal years, 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 86139.
86137.The board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, including other authorized forms of interim financing that include, but are not limited to, commercial paper, 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, excluding refunding bonds authorized pursuant to Section 86142, less any amount loaned and not yet repaid pursuant to this section and withdrawn from the General Fund pursuant to Section 86139 and not yet returned to the General Fund. 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.
86138.Notwithstanding any other provision of this division, or of 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), if the Treasurer sells bonds pursuant to this chapter 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.
86139.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, excluding refunding bonds authorized pursuant to Section 86142, less any amount loaned pursuant to Section 86137 and not yet repaid and any amount withdrawn from the General Fund pursuant to this section and not yet returned to the General Fund. Any amounts withdrawn shall be deposited in the 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.
86140.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.
86141.Pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), 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 allocated proportionally to each program funded through this division by the applicable bond sale.
86142.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, sale, or exchange 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.
86143.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.Section 1 of this act shall be submitted by the Secretary of State to the voters at the November 5, 2024, statewide general election. Section 1 of this act shall take effect upon the approval by the voters of the Climate Resiliency and Flood Protection Bond Act of 2024, as set forth in Section 1 of this act.
SEC. 3.(a)Section 1 of this act shall be submitted to the voters at the next November 5, 2024, statewide general election in accordance with provisions of the Government Code and the Elections Code governing the submission of a statewide measure to the voters.
(b)The Secretary of State shall include in the ballot pamphlets mailed pursuant to Section 9094 of the Elections Code the information specified in Section 9084 of the Elections Code regarding Section 1 of this act. If that inclusion is not possible, the Secretary of State shall publish a supplemental ballot pamphlet regarding Section 1 of this act to be mailed with the ballot pamphlet. If the supplemental ballot pamphlet cannot be mailed with the ballot pamphlet, the supplemental ballot pamphlet shall be mailed separately.
(c)Notwithstanding Section 9054 of the Elections Code or any other law, the translations of the ballot title and the condensed statement of the ballot title required pursuant to Section 9054 of the Elections Code for Section 1 of this act may be made available for public examination at a later date than the start of the public examination period for the ballot pamphlet.
SEC. 4.The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
This division shall be known, and may be cited, as the Climate Resiliency and Flood Protection Bond Act of 2024.
86001.The people of California find and declare all of the following:
(a)A series of atmospheric river and arctic storms impacted California at the end of 2022 and beginning of 2023 with rounds of heavy rain and mountain snow that caused flooding and mudslides with each passing storm. Surging water levels on local rivers and streams led to loss of life and property damage in both protected and unprotected areas. State, regional, and local highways and roads were inundated and impassable. Rising waters tested levee systems in urban areas, breached levees in rural areas, and caused rivers and streams to overflow their banks throughout the state.
(b)Climate change is impacting California in unprecedented ways, including intensifying wildfires, mud slides, floods and drought, sea level rise, and extreme heat, that threaten jobs and economic security, the safety of our communities, and cultural and natural resources.
(c)Actions must be accelerated to enable the state to adapt and become more resilient to the impacts of climate change, including investing in flood system improvements and expanding nature-based solutions.
(d)The Department of Water Resources projects wetter, warmer future conditions and estimates that runoff from historical record storm events will significantly increase by up to 56 percent in the Sacramento River and 116 percent in the San Joaquin River. Projections for a simulated one in 200-year event predict peaks flows five times greater flowing towards the Sacramento-San Joaquin Delta from the San Joaquin River alone.
(e)Researchers at the University of California, Los Angeles have concluded that climate change has already doubled the likelihood of an event capable of producing catastrophic flooding, and that even larger future increases are likely due to continued warming. River and stream runoff in a future extreme storm scenario is two to four times greater than historical values in the Sierra Nevada Mountains due to increased precipitation rates and decreased amounts of snow.
(f)More than 95 percent of the State Plan of Flood Control levee miles have failed federal inspections, which at one time this decade resulted in nearly one-half of the levee miles being ineligible for federal rehabilitation assistance. The 2022 Central Valley Flood Protection Plan update calls for a total investment of $25 billion to $30 billion over 30 years. Without adequate investment in the flood system, California may expect as much as $3.2 billion in damages within the Central Valley and 500 deaths on average per year by 2072.
(g)More than 1,320,000 people are at risk in Central Valley floodplains, and that population is projected to grow to 1,700,000 by 2072. State and local funding for flood control facility operations and maintenance, as well as flood control system improvements, remain well below the total projected costs necessary to protect lives and property and the natural environment.
86002.For purposes of this division, the following definitions apply:
(a)Board means the Central Valley Flood Protection Board.
(b)Delta means the area of the Sacramento-San Joaquin Delta as defined in Section 12220.
(c)Department means the Department of Water Resources.
(d)Disadvantaged community means a community with an annual median household income that is less than 80 percent of the statewide annual median household income.
(e)Facilities of the State Plan of Flood Control means the levees, weirs, channels, and other features of the federal and state authorized flood control facilities located in the Sacramento and San Joaquin River drainage basin for which the board or the department has given the assurances of nonfederal cooperation to the United States required for the project, and those facilities identified in Section 8361.
(f)Nonprofit organization means any nonprofit corporation formed pursuant to the Nonprofit Public Benefit Corporation Law (Part 2 (commencing with Section 5110) of Division 2 of Title 1 of the Corporations Code) and qualified under Section 501(c)(3) of the United States Internal Revenue Code.
(g)Nonurbanized area means a developed area or an area outside a developed area as defined under subdivision (f) of Section 65007 of the Government Code.
(h)Project levees means the levees that are part of the Facilities of the State Plan of Flood Control.
(i)State Plan of Flood Control means the state and federal flood control works, lands, programs, plans, conditions, and mode of maintenance and operations of the Sacramento River Flood Control Project described in Section 8350 of the Water Code, and of flood control projects in the Sacramento River and San Joaquin River watersheds authorized pursuant to Article 2 (commencing with Section 12645) of Chapter 2 of Part 6 of Division 6 for which the board or the department has provided the assurances of nonfederal cooperation to the United States, which shall be updated by the department and compiled into a single document entitled The State Plan of Flood Control.
(j)Undeveloped area means an area as defined under paragraph (2) of subdivision (c) of Section 8307.
(k)Urban area means any contiguous area in which more than 10,000 residents are protected by project levees.
86003.(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 size of grants to be awarded.
(b)The department shall conduct three public meetings to consider public comments before finalizing the guidelines. The department shall publish the draft solicitation and evaluation guidelines on its internet website at least 30 days before the public meetings. One meeting shall be conducted at a location in northern California, one meeting shall be conducted at a location in the San Joaquin Valley of California, and one meeting shall be conducted at a location in southern California. The department shall provide outreach to disadvantaged communities to promote access and participation in those meetings. Upon adoption, the department shall transmit copies of the guidelines to the fiscal committees and the appropriate policy committees of the Legislature.
86004.(a)The department may authorize advance payments to local agencies for projects that have at least one of the following project purposes: restoring habitat for threatened and endangered species under state or federal law or improving flood protection. The amount of funds advanced by the department to the local agency at any one time shall not exceed 25 percent of the entire amount authorized to be provided under the funding agreement between the department and the local agency. The department may exceed the 25-percent limit if it determines that the project requires a larger advance, and the local agency provides sufficient justification and documentation to the department. In light of the states interest in these projects, the department may reduce or eliminate any retention that would otherwise be withheld under the funding agreement.
(b)For purposes of this section, advance payments are funds that are provided to a local agency before the local agency has incurred expenses in furtherance of a project described in subdivision (a) and that are provided by the department to allow the local agency to fund the project on a cash flow basis.
(c)The department shall do all of the following:
(1)Prioritize recipients and projects serving disadvantaged, low-income, and under-resourced communities with modest reserves and potential cashflow problems.
(2)Stipulate an advance payment structure and request process within the grant agreement or contract between the department and local agency.
(3)Adopt requirements regarding the use of the advance payment to ensure that the funds are used properly.
86005.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.
86006.(a)Except as provided in subdivision (b), up to 10 percent of funds allocated for each program funded by this division may be expended, including, but not limited to, by grants, 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 for preliminary plans, working drawings, and construction as defined in the annual Budget Act for a capital outlay project or grant project. Planning may include feasibility studies for environmental site cleanup that would further the purpose of a project that is eligible for funding under this division. Monitoring may include measuring greenhouse gas emissions reductions and carbon sequestration associated with program expenditures under this division.
(b)Funds used for planning projects that benefit disadvantaged communities may exceed 10 percent of the funds allocated if the department determines that there is a need for the additional funding.
86007.(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 agencys internet website in a downloadable spreadsheet format. The spreadsheet shall include information about the location and footprint of each funded project, the projects objectives, the status of the project, anticipated outcomes, any matching moneys provided for the project by the grant recipient, and the applicable chapter of this division pursuant to which the grant recipient received moneys.
(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 department shall require adequate reporting of the expenditures of the funding from the grant.
(d)The costs associated with the publications, audits, statewide bond tracking, cash management, and related oversight activities provided for in this section shall be funded from this division. These costs shall be shared proportionally by each program through this division.
2.Climate Resiliency and Flood Protection86100.The sum of four billion five hundred million dollars ($4,500,000,000) shall be available, upon appropriation by the Legislature, for flood protection and climate resiliency projects pursuant to this chapter.
86101.Of the funds made available by Section 86100, two billion five hundred million dollars ($2,500,000,000) shall be available to the department, upon appropriation by the Legislature from the fund, for the following purposes:
(a)The evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses, and facilities of the State Plan of Flood Control, including, but not limited to, all of the following:
(1)Restoring the design capacity of bypasses.
(2)Repairing erosion sites and removing sediment from channels or bypasses.
(3)Evaluating and repairing levees and any other facilities of the State Plan of Flood Control.
(4)Implementing mitigation measures for a project undertaken pursuant to this subdivision, including funding for an endowment to maintain such measures. The department may fund participation in a natural community conservation plan pursuant to Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code, or a habitat conservation plan under Section 10(a)(1)(B) of the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), to facilitate projects authorized by this subdivision.
(5)Improving or adding facilities that are not a part of the State Plan of Flood Control that protect areas that are also protected by the State Plan of Flood Control.
(b)Improving or adding facilities to the State Plan of Flood Control to increase levels of flood protection and climate resiliency, including all related costs for mitigation and infrastructure relocation. Funds made available by this subdivision may be expended for state financial participation in federal and state authorized flood control projects, feasibility studies and design of federal flood damage reduction and related projects, improving the capacity of bypasses, reservoir reparation, and flood managed aquifer recharge projects. Not more than one hundred million dollars ($100,000,000) may be expended on a single project.
(c)Of the funds provided in this section, not less than two hundred million dollars ($200,000,000) shall be available to increase flood protection and climate resiliency for the repair, rehabilitation, reconstruction, replacement, or improvement of levees that protect nonurbanized areas and undeveloped areas, including the repair, improvement, or setback of bypass levees.
(d)Of the funds provided in this section, not less than two hundred million dollars ($200,000,000) shall be available to increase flood protection and climate resiliency for the repair, rehabilitation, reconstruction, replacement, or improvement of levees of the San Joaquin River and its tributaries.
(e)In expending funds provided in this section, the department shall do both of the following:
(1)Collaborate with local agencies to secure the maximum feasible amounts of federal and local matching funds to fund disaster preparedness and flood prevention projects in order to ensure prudent and cost-effective use of these funds to the extent that this does not prohibit timely implementation of this division.
(2)Prioritize project selection and project design to achieve maximum public benefits from the use of these funds.
86110.(a)Of the funds made available by Section 86100, five hundred million dollars ($500,000,000) shall be available, upon appropriation by the Legislature, to the department for projects in the Delta to increase flood protection and climate resiliency. The funds shall be expended for both of the following purposes:
(1)Local assistance under the delta levee maintenance subventions program under Part 9 (commencing with Section 12980) of Division 6, as that part may be amended.
(2)Special flood protection projects under Chapter 2 (commencing with Section 12310) of Part 4.8 of Division 6, as that chapter may be amended.
(b)Projects that are undertaken pursuant to paragraph (2) of subdivision (a) shall have as their principal purpose the preservation, protection, rehabilitation, and improvement of existing levees to better protect against the threat of earthquake and sea level rise with improved engineering standards to allow for progressive rehabilitation and improvement to maintain an adequate factor of safety. Other project purposes may include, but not be limited to, the following:
(1)Improving the protection for quality of drinking water supplies derived from the Delta.
(2)Reducing salts contained in Delta water and delivered to, and often retained in, agricultural areas.
(3)Maintaining water quality for Delta users.
(4)Assisting in preserving Delta lands, including terrestrial and aquatic habitats important for listed or candidate species under the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the California Endangered Species Act, and waterfowl of the Pacific flyway.
(5)Protecting water rights of the area of origin and the environments of the Sacramento-San Joaquin river systems.
(6)Protecting highways, utility facilities, and other infrastructure located within the Delta.
(7)Preventing the disruption of water supplies derived from the Sacramento-San Joaquin Delta.
(8)Protecting the critical evacuation and national defense routes for the region.
86120.Of the funds made available by Section 86100, the sum of one billion dollars ($1,000,000,000) shall be available, upon appropriation by the Legislature, to the department for payment for the states share of the nonfederal costs, and related costs, of flood protection and climate resiliency projects authorized under any of the following:
(a)The State Water Resources Law of 1945 (Chapter 1 (commencing with Section 12570) and Chapter 2 (commencing with Section 12639) of Part 6 of Division 6).
(b)The Flood Control Law of 1946 (Chapter 3 (commencing with Section 12800) of Part 6 of Division 6).
(c)The California Watershed Protection and Flood Prevention Law (Chapter 4 (commencing with Section 12850) of Part 6 of Division 6).
(d)The costs described in subdivision (a) include costs incurred in connection with either of the following:
(1)The granting of credits or loans to local agencies, as applicable, pursuant to Sections 12585.3 and 12585.4 of, subdivision (d) of Section 12585.5 of, and Sections 12866.3 and 12866.4 of, the Water Code.
(2)The implementation of Chapter 3.5 (commencing with Section 12840) of Part 6 of Division 6.
(e)The funds made available by this section shall be allocated only to projects that are not part of the State Plan of Flood Control.
86125.(a)Of the funds made available by Section 86100, five hundred million dollars ($500,000,000) shall be available, upon appropriation by the Legislature, to the department for flood management projects that are components of multiple benefit flood management system improvements that reduce risks to public safety and provide improvement to aquatic and wildlife habitat. The department shall coordinate the expenditure of multibenefit funds with the board and the Department of Fish and Wildlife. Where practical, the department shall collaborate with nonprofit organizations and nongovernmental organizations to inform the expenditure of these funds. Eligible project types include, but are not limited to, levee setbacks, projects connecting rivers with flood plains, enhancement of flood plains and bypasses, groundwater recharge, and land acquisitions and easements necessary for these project types. Eligible projects include any of the following:
(1)Multiple benefit flood management projects that reduce the impacts of climate change on inland or coastal infrastructure, communities, or ecosystems, and provide ecosystem, wildlife, or groundwater recharge benefits.
(2)Natural infrastructure projects to reduce flood intensity and slow watershed runoff.
(3)Projects that provide matching grants for, or otherwise leverage funding from, the Federal Emergency Management Agency, the United States Army Corps of Engineers, or other federal mitigation and resilience funding.
(4)Projects that provide benefits to fish, waterfowl, wildlife, and anadromous and other native fish species along migratory corridors.
(5)Projects that restore streams to a more natural state by removing drainage obstructions, culverts, and paved channels to enable more stormwater to be absorbed and gradually released by soil and plants.
(6)Acquiring easements and other interests in real property to protect or enhance flood protection corridors and bypasses while preserving or enhancing the agricultural use of the real property.
(7)Constructing new levees necessary for the establishment of a flood protection corridor or bypass.
(8)Setting back existing flood control levees, and in conjunction with undertaking those setbacks, strengthening or modifying existing levees and weirs.
(9)Relocating or floodproofing structures necessary for the establishment of a flood protection corridor.
(10)Acquiring interests in, or providing incentives for maintaining agricultural uses of, real property that is in a flood plain that cannot reasonably be made safe from future flooding.
(11)Acquiring easements and other interests in real property to protect or enhance flood protection corridors while preserving or enhancing the wildlife value of the real property.
(b)Of the funds made available pursuant to this section, one hundred million dollars ($100,000,000) shall be allocated for multiple benefit flood management projects in urban coastal watersheds.
3.Fiscal Provisions86130.(a)Bonds in the total amount of four billion five hundred million dollars ($4,500,000,000), and any additional bonds authorized, issued, and appropriated in accordance with this division pursuant to other provisions of law, not including the amount of any refunding bonds issued in accordance with Section 86142, 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 in the amount determined by the committee to be necessary or desirable pursuant to Section 86133. 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.
86131.The bonds authorized by this division shall be prepared, executed, issued, sold, paid, and redeemed as provided in the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), as amended from time to time, 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.
86132.(a)Solely for the purpose of authorizing the issuance and sale, pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), of the bonds authorized by this division, the California Disaster Preparedness and Flood Prevention Finance Committee is hereby created. For purposes of this division, the California Disaster Preparedness and Flood Prevention 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 law, any member may designate a representative to act as that member in the members 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.
86133.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.
86134.For purposes of 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), board, as defined in Section 16722 of the Government Code, means the Secretary of the Natural Resources Agency.
86135.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.
86136.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, and without regard to fiscal years, 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 86139.
86137.The board may request the Pooled Money Investment Board to make a loan from the Pooled Money Investment Account, including other authorized forms of interim financing that include, but are not limited to, commercial paper, 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, excluding refunding bonds authorized pursuant to Section 86142, less any amount loaned and not yet repaid pursuant to this section and withdrawn from the General Fund pursuant to Section 86139 and not yet returned to the General Fund. 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.
86138.Notwithstanding any other provision of this division, or of 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), if the Treasurer sells bonds pursuant to this chapter 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.
86139.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, excluding refunding bonds authorized pursuant to Section 86142, less any amount loaned pursuant to Section 86137 and not yet repaid and any amount withdrawn from the General Fund pursuant to this section and not yet returned to the General Fund. Any amounts withdrawn shall be deposited in the 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.
86140.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.
86141.Pursuant to the State General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code), 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 allocated proportionally to each program funded through this division by the applicable bond sale.
86142.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, sale, or exchange 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.
86143.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.Section 1 of this act shall be submitted by the Secretary of State to the voters at the November 5, 2024, statewide general election. Section 1 of this act shall take effect upon the approval by the voters of the Climate Resiliency and Flood Protection Bond Act of 2024, as set forth in Section 1 of this act.
SEC. 3.(a)Section 1 of this act shall be submitted to the voters at the next statewide general election in accordance with provisions of the Government Code and the Elections Code governing the submission of a statewide measure to the voters.
(b)The Secretary of State shall include in the ballot pamphlets mailed pursuant to Section 9094 of the Elections Code the information specified in Section 9084 of the Elections Code regarding Section 1 of this act. If that inclusion is not possible, the Secretary of State shall publish a supplemental ballot pamphlet regarding Section 1 of this act to be mailed with the ballot pamphlet. If the supplemental ballot pamphlet cannot be mailed with the ballot pamphlet, the supplemental ballot pamphlet shall be mailed separately.
(c)Notwithstanding Section 9054 of the Elections Code or any other law, the translations of the ballot title and the condensed statement of the ballot title required pursuant to Section 9054 of the Elections Code for Section 1 of this act may be made available for public examination at a later date than the start of the public examination period for the ballot pamphlet.
SEC. 4.The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
|
Date
|
Status
|
|---|---|
| Jul 6, 2023 | July 11 hearing postponed by committee. |
| Jun 28, 2023 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on W., P., & W. |
| Jun 20, 2023 | June 20 hearing postponed by committee. |
| Jun 15, 2023 | Referred to Coms. on W., P., & W. and NAT. RES. |
| Jun 1, 2023 | In Assembly. Read first time. Held at Desk. |
| May 31, 2023 | Read third time. Passed. (Ayes 36. Noes 2. Page 1394.) Ordered to the Assembly. |
| May 22, 2023 | Read second time. Ordered to third reading. |
| May 18, 2023 | Read second time and amended. Ordered to second reading. |
| May 18, 2023 | From committee: Do pass as amended. (Ayes 5. Noes 2. Page 1178.) (May 18). |
| May 12, 2023 | Set for hearing May 18. |
| May 1, 2023 | May 1 hearing: Placed on APPR suspense file. |
| Apr 21, 2023 | Set for hearing May 1. |
| Apr 19, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 1. Page 795.) (April 19). Re-referred to Com. on APPR. |
| Apr 10, 2023 | Set for hearing April 19. |
| Mar 28, 2023 | From committee: Do pass and re-refer to Com. on GOV. & F. (Ayes 9. Noes 0. Page 547.) (March 28). Re-referred to Com. on GOV. & F. |
| Mar 20, 2023 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on N.R. & W. |
| Mar 7, 2023 | Set for hearing March 28. |
| Mar 1, 2023 | Referred to Coms. on N.R. & W. and GOV. & F. |
| Feb 17, 2023 | From printer. May be acted upon on or after March 19. |
| Feb 16, 2023 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| May 31, 2023 | Senate 3rd Reading SB638 Eggman et al. | Senate Floor |
Passed |
|
| May 18, 2023 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| May 1, 2023 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 19, 2023 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Governance and Finance |
Passed |
|
| Mar 28, 2023 | Do pass, but first be re-referred to the Committee on [Governance and Finance] | Senate Standing Committee on Natural Resources and Water |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Association Of California Water Agencies | * For If Amend | Mar 28, 2023 |
| Bay Area Council | ** Support | |
| California Alliance for Jobs | * Support | Apr 19, 2023 |
| California Central Valley Flood Control Association | ** Support | |
| California Municipal Utilities Association | * Support | Mar 28, 2023 |
| California Stormwater Quality Association | * Support | Apr 19, 2023 |
| Elsinore Valley Municipal Water District | ** Support | |
| Irvine Ranch Water District | ** Support | |
| Knights Landing Ridge Drainage District | ** Support | |
| League Of California Cities | * Support | Mar 28, 2023 |
| Little Egbert Joint Powers Agency | ** Support | |
| Northern California Power Agency | ** Support | |
| Quad-C, Ltd. | ** Support | |
| Quad-c, Ltd., Landowner | ** Support | |
| Reclamation District 1000 | ** Support | |
| Reclamation District 150 | ** Support | |
| Reclamation District 2033 | ** Support | |
| Reclamation District 2037 | ** Support | |
| Reclamation District 349 | ** Support | |
| Reclamation District 900 | ** Support | |
| Reclamation District 999 | ** Support | |
| Reclamation District No. 1000 | ** Support | |
| Reclamation District No. 108 | ** Support | |
| Reclamation District No. 150 | ** Support | |
| Reclamation District No. 2033 | ** Support | |
| Reclamation District No. 2037 | ** Support | |
| Reclamation District No. 349 | ** Support | |
| Reclamation District No. 548 | ** Support | |
| Reclamation District No. 784 | ** Support | |
| Reclamation District No. 900 | ** Support | |
| Reclamation District No. 999 | ** Support | |
| River Partners | ** Support | |
| Sacramento Metropolitan Chamber of Commerce | ** Support | |
| Sacramento River Westside Levee District | ** Support | |
| San Diego County Water Authority | * Support | Mar 28, 2023 |
| San Joaquin Area Flood Control Agency | ** Support | |
| Santa Clara Valley Water District | * Support | Apr 19, 2023 |
| Serrano Water District | * Support | Apr 19, 2023 |
| Solano County Water Agency | ** Support | |
| Sutter Butte Flood Control Agency | ** Support | |
| Sweetwater Authority | ** Support | |
| United Water Conservation District | * Support | Mar 28, 2023 |
| Valley Ag Water Coalition | ** Support | |
| Yuba Water Agency | ** Support |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 638 |
THIRD READING
Bill No: SB 638
Author: Eggman (D) and Niello (R), et al.
Amended: 5/18/23
Vote: 27
SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 3/28/23
AYES: Min, Allen, Becker, Eggman, Grove, Hurtado, Laird, Limón, Padilla
NO VOTE RECORDED: Seyarto, Dahle
SENATE GOVERNANCE & FIN. COMMITTEE: 7-1, 4/19/23
AYES: Caballero, Blakespear, Dahle, Durazo, Glazer, Skinner, Wiener
NOES: Seyarto
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/18/23
AYES: Portantino, Ashby, Bradford, Wahab, Wiener
NOES: Jones, Seyarto
SUBJECT: Climate Resiliency and Flood Protection Bond Act of 2024
SOURCE: California Central Valley Flood Control Association
DIGEST:
This bill enacts the Climate Resiliency and Flood Protection Bond Act of 2024 which, if approved by voters on the November 5, 2024 statewide election ballot, authorizes $6 billion in general obligation bonds for flood protection and climate resiliency projects, as provided.
ANALYSIS:
Existing law:
- Authorizes, pursuant to Section One of Article XVI of the California Constitution and the State General Obligation Bond Law, the issuance of general obligation bonds.
- Authorizes, further, the Legislature to place general obligation bonds on the ballot for specific purposes with a two-thirds vote of the Assembly and Senate.
This bill enacts the Climate Resiliency and Flood Protection Bond Act of 2024 (bond act) which, if approved by voters on the November 5, 2024 statewide election ballot, authorizes $6 billion in general obligation bonds for flood protection and climate resiliency projects, as provided.
Specifically, this bill:
- Establishes the Climate Resiliency and Flood Protection Bond Act of 2024 to be placed on the November 5, 2024 statewide election ballot. The bond act is organized into three chapters, and, if approved by voters, authorizes $6 billion in general obligation bonds for flood protection and climate resiliency projects.
- Provides numerous general provisions in Chapter 1 applicable to the bond act, including:
- Requires the California Department of Water Resources (DWR) to develop project solicitation and evaluation guidelines with public input, as provided, and requires DWR to include outreach to disadvantaged communities to promote access and participation in public meetings to provide input to the guidelines.
- Authorizes DWR to provide advance payments to local agencies for projects that improve flood protection and restore habitat, as specified. The amount of funds advanced at any one time cannot be more than 25% of the total amount authorized, with certain exceptions.
- Requires DWR to prioritize projects and recipients serving disadvantaged, low-income, and under-resourced communities, as specified.
- Limits administrative costs for a grant program to 5% of the funds allocated.
- Authorizes up to 10% of each program’s funds to be used for planning and monitoring, with certain exceptions for disadvantaged communities, as provided.
- Requires the California Department of Finance to provide for an independent audit of bond act expenditures, and requires certain additional transparency and accountability provisions.
- Prohibits bond act funds from being used to pay certain costs associated with Delta conveyance facilities, and
- Defines various terms
- Establishes, in Chapter 2, bond amounts totaling $6 billion for various programs to be available, subject to legislative appropriation, as follows:
- $2.5 billion to the Department of Water Resources (DWR) for the State Central Valley Flood Control System (State Plan of Flood Control) for the evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses and facilities, including implementing actions consistent with the Central Valley Flood Protection Plan 2022 update, flood emergency response projects, restoring bypass design capacity, and participation in a Habitat Conservation Plan or Natural Community Conservation Plan, among others.
- Of these funds, at least $300 million is available for the repair, rehabilitation, reconstruction, replacement, or improvement of levees that protect nonurbanized areas and undeveloped areas, as provided.
- Of these funds, at least $500 million is available for the repair, rehabilitation, reconstruction, replacement, or improvement of levees on the San Joaquin River and its tributaries.
- DWR is required to collaborate with local agencies to obtain the maximum matching funds to fund disaster preparedness and flood prevention projects, and to prioritize project selection and design to achieve the maximum public benefits, as provided.
- $500 million to DWR for projects in the Delta to increase flood protection and climate resiliency, including for local assistance for the delta levee maintenance subventions, special flood protection projects, and flood emergency response projects.
- Special flood protection projects shall have the principal purpose of the preservation, protection, rehabilitation and improvement of existing levees to improve protection against the threat of earthquake and sea level rise, as provided, and may include other project purposes such as the protection of drinking water quality and preventing salt water intrusion, among others.
- $1 billion to DWR for the payment of the state’s share of nonfederal costs, and related costs of flood protection and climate resiliency projects under various existing laws, as provided, and for projects that are not part of the State Plan of Flood Control.
- $1 billion to DWR for flood management projects that are components of multiple benefit flood management system improvements that reduce risks to public safety; provide greater resiliency from the effects of climate change, extreme weather events, and sea level rise; and provide improvement to aquatic and wildlife habitat, as provided.
- Of these funds, $100 million is allocated for multiple benefit flood management projects in urban coastal watersheds
- Eligible projects include natural infrastructure projects to reduce flood intensity and slow watershed runoff; multiple benefit flood management projects that reduce the impacts of climate change on infrastructure and provide ecosystem, wildlife, or groundwater recharge benefits; and the construction of new levees for the establishment of a flood protection corridor, among others.
- $1 billion to DWR to provide state funding to local agencies for replacement, repairs, rehabilitation, improvements, and other dam safety projects at existing dams and associated facilities. This includes dam safety projects at existing dams designated as “high hazard” or “extremely high hazard” by DWR, as provided. Dam safety improvement projects are required to provide public benefits, including the protection of public safety, water supply enhancement, and protection of water quality, among others.
- Projects are required to be selected on a competitive basis including whether the project is cost effective and provides public benefits, among other requirements
- $2.5 billion to the Department of Water Resources (DWR) for the State Central Valley Flood Control System (State Plan of Flood Control) for the evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses and facilities, including implementing actions consistent with the Central Valley Flood Protection Plan 2022 update, flood emergency response projects, restoring bypass design capacity, and participation in a Habitat Conservation Plan or Natural Community Conservation Plan, among others.
- Incorporates, in Chapter 3, numerous standard provisions in general obligation bond law, either explicitly or by reference, with some modifications. These include, among others:
- The California Disaster Preparedness and Flood Prevention Finance Committee (Committee), comprised of the Director of Finance, the Treasurer, and the Controller, is created.
- The committee is charged with determining whether it is necessary or desirable to issue bonds, and if so, the amount of bonds to be issued and sold.
- The bill defines many of its terms, includes severability provisions, and also states legislative findings and declarations supporting its purposes.
- Makes extensive legislative findings and declarations justifying the need for the bond act.
- Defines many terms and includes contingent enactment language preventing this bond act from going into effect unless SB 867 (Allen, 2022) also is enacted and takes effect by January 1, 2024.
Background
According to July 2022 polling by the Public Policy Institute of California, Californians are most likely to name water supply and drought, followed by wildfires and climate change, as the most important environmental issues the state faces. In the same poll, overwhelming majorities raise concerns about water supply and protecting the condition of the state’s oceans and beaches.
In recent years, significant General Fund monies – billions of dollars – have been appropriated for numerous activities related to mitigating and addressing climate change, as well as protecting and restoring natural resources and the environment. These include, for example, addressing drought, wildfire, habitat restoration and other activities. Additional agreements made for future budget years would have provided billions of additional dollars over five years. These appropriations and planned appropriations represented a significant increase of General Fund monies dedicated to natural resources and climate compared to previous budgets.
However, the state’s fiscal outlook has since declined considerably. Given the projected decline in revenues to the State’s General Fund, the Governor’s January 2023 budget proposed $5.5 billion in “General Fund solutions” – both cuts and funding delays – from these programs. Proposed spending reductions vary between different programs. Coastal resilience program funding is reduced by almost half. Water and drought resilience-related reductions were on the order of a few percent, although another 4% or so was delayed. In addition, the Governor proposed new $139 million in one-time General Fund monies for flood management programs in January.
The Governor’s May budget Revise proposed additional increases in flood protection, including the restoration of some previously-proposed cuts, but also proposed shifting an additional $1.1 billion in natural resources and climate resilience programs to a future proposed Climate Bond from the General Fund. The monies and programs shifted included:
- $270 million Water Recycling
- $169 million Salton Sea Restoration
- $160 million Community Resilience Centers
- $100 million Transformative Climate Communities
- $100 million Regional Resilience Program
- $100 million Urban Greening
- $86.6 million Statewide Parks Program
- $60 million Sustainable Groundwater Management Act Implementation
- $50 million Dam Safety and Flood Management
- $20 million Multi-Benefit Land Repurposing
California voters have approved seven resources-related bonds since 2000 (Propositions 12 (2000), 40 (2002), 50 (2002), 84 (2006), 1E (2006), 1 (2014), and 68 (2018)). Bonds can be placed on the ballot by citizen’s initiative and by the Legislature. Bonds are often used to finance capital outlay projects to help spread the cost over the years the proposed projects provide services. State voters have approved general obligation bonds for a variety of purposes including, for example, education, housing, high-speed rail, correctional facilities, and veterans.
The most recent statewide bond primarily dedicated to flood management was passed in November 2006. California voters approved Proposition 1E, the Disaster Preparedness and Flood Prevention Bond Act of 2006, which authorized the issuance of general obligation bonds totaling approximately $4.1 billion for various flood management programs. These included the State Central Valley Flood Control System and Delta Levees ($3 billion), flood control subventions ($500 million), stormwater flood management ($300 million), and statewide flood protection corridors and bypasses ($290 million).
Existing resources bonds are mostly appropriated, but many of the underlying bonds have not yet been sold. According to the State Treasurer, while almost all of the Proposition 1E and Proposition 84 bonds have been sold, $3.1 billion in Proposition 68 and $4.9 billion in Proposition 1 bonds have not yet been sold.
There is an overwhelming need to promote climate resilience in the state. The Winter 2022/23 atmospheric river storms are already estimated to have caused billions of dollars in cumulative damages, including from flooding in Tulare Lake and Pajaro.
Comments
The Senate resources bond are now linked.
This bill and SB 867 (Allen, 2022) are both climate resilience bonds. Contingent enactment language was added to both by the Senate Appropriations Committee.
Additional information about this bond act may be found in the bill analyses prepared by the Senate Natural Resources and Water, and Senate Governance and Finance Committees.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee:
- Bond costs: Total principal and interest costs of approximately $10.1 billion to pay off the bonds ($6 billion in principal and $4.1 billion in interest), with average annual debt service payments of $337 million (General Fund), when all bonds are sold, and assuming a 30-year maturity and an interest rate of 3.75% (approximately the rate secured by the Treasurer for new 30-year bonds at the most recent sale). If interest rates increase to 5% in the near future, annual debt service would be approximately $390 million (General Fund) and total principal and interest costs over the repayment period would be approximately $11.7 billion.
- Administrative costs: The bill would allow for up to 5 percent of the bond allocation to any entity to be used for administrative costs, except when necessary in specified situations related to disadvantaged communities, where up to 10 percent could be used. Over the lifetime of the bond and contingent upon future appropriations in the budget, roughly $300 million of the bond funds could be used for administration.
- Ballot costs: One-time Secretary of State costs, likely in the range of $738,000 to $984,000 (General Fund), for printing and mailing costs to place the measure on the ballot in the November 2024 statewide election.
SUPPORT: (Verified 5/18/23)
California Central Valley Flood Control Association (source)
Bay Area Council
Elsinore Valley Municipal Water District
Irvine Ranch Water District
Knights Landing Ridge Drainage District
Little Egbert Joint Powers Agency
Northern California Power Agency
Quad-C, Ltd.
Reclamation District No. 108
Reclamation District No. 150
Reclamation District No. 349
Reclamation District No. 548
Reclamation District No. 784
Reclamation District No. 900
Reclamation District No. 999
Reclamation District No. 1000
Reclamation District No. 2033
Reclamation District No. 2037
River Partners
Sacramento Metropolitan Chamber of Commerce
Sacramento River Westside Levee District
San Joaquin Area Flood Control Agency
Solano County Water Agency
Sutter Butte Flood Control Agency
Sweetwater Authority
Valley Ag Water Coalition
Yuba Water Agency
OPPOSITION: (Verified 5/18/23)
None received
ARGUMENTS IN SUPPORT: According to the author, “California passes water and resources bonds with some regularity, and they all generally contain a small percentage for flood protection projects. However, the amounts set aside for flood protection projects don’t come close to covering the costs required to safeguard our state. Nor have the funds ended up where they are needed most.”
“Poor communities and communities of color, who already face an uphill funding battle due to historic disinvestments, have not received an equitable share of past flood protection dollars. They sit at the back of the line because their communities often lack the financial resources to front the initial costs of planning and design that are necessary for a local flood project to attract state and federal funding.
“Proactive investments in communities and flood protection projects are more cost-effective than paying to fix the damage caused by a flood. We need swift and bold investments that prioritize California’s most vulnerable communities and populations now, and SB 638 provides those bold investments.”
Prepared by: Katharine Moore / N.R. & W. / (916) 651-4116
5/23/23 13:28:28
**** END ****
SENATE COMMITTEE ON
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
SB 638 (Eggman) - Climate Resiliency and Flood Protection Bond Act of 2024
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
This bill would enact the Climate Resiliency and Flood Control Bond Act of 2024, which places a $6 billion general obligation bond before voters in the November 2024 general election to finance flood control efforts.
*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on May 18, 2023
Fiscal Impact:
- Bond costs: Total principal and interest costs of approximately $10.1 billion to pay off the bonds ($6 billion in principal and $4.1 billion in interest), with average annual debt service payments of $337 million (General Fund), when all bonds are sold, and assuming a 30-year maturity and an interest rate of 3.75% (approximately the rate secured by the Treasurer for new 30-year bonds at the most recent sale). If interest rates increase to 5% in the near future, annual debt service would be approximately $390 million (General Fund) and total principal and interest costs over the repayment period would be approximately $11.7 billion.
- Administrative costs: The bill would allow for up to 5 percent of the bond allocation to any entity to be used for administrative costs, except when necessary in specified situations related to disadvantaged communities, where up to 10 percent could be used. Over the lifetime of the bond and contingent upon future appropriations in the budget, roughly $300 million of the bond funds could be used for administration.
- Ballot costs: One-time Secretary of State (SOS) costs, likely in the range of $738,000 to $984,000 (General Fund), for printing and mailing costs to place the measure on the ballot in the November 2024 statewide election.
Committee Amendments:
These amendments would make enactment of this bill contingent upon the passage of another bond measure, SB 867 (Allen, 2023).
-- END --
SENATE COMMITTEE ON APPROPRIATIONS
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
SB 638 (Eggman) - Climate Resiliency and Flood Protection Bond Act of 2024
Version: March 20, 2023 | Policy Vote: N.R.&W. 9-0, GOV.&F. 7-1 |
Urgency: No | Mandate: No |
Hearing Date: May 1, 2023 | Consultant: Ashley Ames |
Bill Summary:
This bill would enact the Climate Resiliency and Flood Control Bond Act of 2024, which places a $6 billion general obligation bond before voters in the November 2024 general election to finance flood control efforts.
Fiscal Impact:
- Bond costs: Total principal and interest costs of approximately $10.1 billion to pay off the bonds ($6 billion in principal and $4.1 billion in interest), with average annual debt service payments of $337 million (General Fund), when all bonds are sold, and assuming a 30-year maturity and an interest rate of 3.75% (approximately the rate secured by the Treasurer for new 30-year bonds at the most recent sale). If interest rates increase to 5% in the near future, annual debt service would be approximately $390 million (General Fund) and total principal and interest costs over the repayment period would be approximately $11.7 billion.
- Administrative costs: The bill would allow for up to 5 percent of the bond allocation to any entity to be used for administrative costs, except when necessary in specified situations related to disadvantaged communities, where up to 10 percent could be used. Over the lifetime of the bond and contingent upon future appropriations in the budget, roughly $300 million of the bond funds could be used for administration.
- Ballot costs: One-time Secretary of State (SOS) costs, likely in the range of $738,000 to $984,000 (General Fund), for printing and mailing costs to place the measure on the ballot in the November 2024 statewide election.
Background:
$31 Billion in General Obligation Bonds Approved in Prior Two Decades for Environmental Purposes. Since 2000, voters have approved about $31 billion in general obligation bonds in statewide elections to pay for different types of natural resources and environmental protection-related projects. The two most recent such bonds were (1) Proposition 1 in 2014, which provided $7.5 billion primarily for water supply infrastructure, water quality improvements, and habitat restoration activities; and (2) Proposition 68 in 2018, which provided $4.1 billion primarily for state and local parks and habitat conservation and restoration activities.
Most Bond Funding Has Been Committed or Appropriated for Projects. Almost 90 percent of Proposition 1 funding has been appropriated, with most of that committed to specific projects.
Proposed Law:
SB 638 would enact the Climate Resiliency and Flood Protection Bond Act of 2024, which places a $6 billion bond before voters in the November 2024 general election to finance flood control efforts, flood protection and climate resilience in the Delta, and dam safety projects. If approved, the measure directs proceeds of bonds issued and sold to be deposited in the Climate Resiliency and Flood Control Fund, which the bill creates in the State Treasury.
SB 638 would direct the Legislature to appropriate the proceeds of the sale of bonds to the Department of Water Resources (DWR) for the following:
- $2.5 billion for the State Central Valley Flood Control System (State Plan of Flood Control) for the evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses and facilities, including implementing actions consistent with the 2022 update, flood emergency response projects, restoring bypass design capacity, and participation in a Habitat Conservation Plan or Natural Community Conservation Plan, among others. DWR must collaborate with local agencies to obtain the maximum matching funds to fund disaster preparedness and flood prevention projects, and to prioritize project selection and design to achieve the maximum public benefits, as provided. Of these amounts:
- $300 million is available for the repair, rehabilitation, reconstruction, replacement, or improvement of levees that protect nonurbanized areas and undeveloped areas, as provided.
- $500 million is available for the repair, rehabilitation, reconstruction, replacement, or improvement of levees on the San Joaquin River and its tributaries.
- $500 million for projects in the Delta to increase flood protection and climate resiliency, including for local assistance for the delta levee maintenance subventions, special flood protection projects, and flood emergency response projects. Special flood protection projects shall have the principal purpose of the preservation, protection, rehabilitation and improvement of existing levees to improve protection against the threat of earthquake and sea level rise, as provided, and may include other project purposes such as the protection of drinking water quality and preventing salt water intrusion, among others.
- $1 billion to DWR for the payment of the state’s share of nonfederal costs, and related costs of flood protection and climate resiliency projects under various existing laws for projects that are not part of the State Plan of Flood Control.
- $1 billion to DWR for flood management projects that are components of multiple benefit flood management system improvements that reduce risks to public safety; provide greater resiliency from the effects of climate change, extreme weather events, and sea level rise; and provide improvement to aquatic and wildlife habitat. Eligible projects include natural infrastructure projects to reduce flood intensity and slow watershed runoff; multiple benefit flood management projects that reduce the impacts of climate change on infrastructure and provide ecosystem, wildlife, or groundwater recharge benefits; and the construction of new levees for the establishment of a flood protection corridor, among others. Of the $1 billion, SB 638 allocates $100 million specifically for multiple benefit flood management projects in urban coastal watersheds.
- $1 billion to DWR to provide state funding to local agencies for replacement, repairs, rehabilitation, improvements, and other dam safety projects at existing dams and associated facilities, including dam safety projects at existing dams designated as “high hazard” or “extremely high hazard” by DWR. To be eligible, dam safety improvement projects must provide public benefits, including the protection of public safety, water supply enhancement, and protection of water quality, among others
SB 638 would require DWR to develop project solicitation and evaluation guidelines, and conduct three public meetings regarding the guidelines in each of Northern and Southern California, and the San Joaquin Valley. DWR would have to publish draft guidelines before the meetings, and provide outreach to disadvantaged communities to promote access and participation in public meetings to provide input on the guidelines.
DWR could make advance payments to local agencies for projects that improve flood protection and restore habitat, as specified. The amount of funds that could be advanced at any one time could not be more than 25 percent of the total amount authorized, with certain exceptions. For advance payments, DWR would be required to:
- Prioritize projects and recipients serving disadvantaged, low-income, and under-resourced communities, as specified.
- Stipulate an advance payment structure and request process within the grant agreement of contract.
- Adopt requirements regarding the use of the advance payment to ensure proper use of funds.
SB 638 would cap administrative costs for a grant program at 5 percent of the funds allocated, and allow up to 10 percent of each program’s funds to be used for planning and monitoring, with certain exceptions for disadvantaged communities. The measure would require DOF to provide for an independent audit of Act expenditures, and would require certain additional transparency and accountability provisions. The bill would prohibit the use of its funds to pay certain costs associated with Delta conveyance facilities.
The bill would also incorporate standard provisions in GO bond law, either explicitly or by reference, with some modifications. The measure would create the California Disaster Preparedness and Flood Prevention Finance Committee, which would be comprised of the Director of Finance, the Treasurer, and the Controller. SB 638 would charge the committee with determining whether it is necessary or desirable to issue bonds, and if so, the amount of bonds to be issued and sold.
The bill would define many of its terms, include an urgency clause, and state legislative findings and declarations supporting its purposes.
Related Legislation:
In addition to SB 638’s proposed $6 billion for flood control, four other bills seek to place authorizations for GO bonds before voters:
- SB 28 (Glazer) proposes $15.5 for preschool, K-12, CSU, and UC facilities.
- SB 834 (Portantino) proposes $25 billion for home ownership and construction.
- SB 867 (Allen) proposes $4.1 billion for drought, wildfire, and other climate resilience projects.
- AB 1567 (E. Garcia) proposes $15.1 billion in general obligation bonds for safe drinking water, wildfire prevention, drought preparation, flood protection, extreme heat mitigation, and workforce development programs.
SB 45 (Portantino, 2021) would have enacted the Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2022, authorizing $5.51 billion in general obligation bonds for wildfire prevention, safe drinking water, drought preparation, flood protection, and related topics with voter approval. (This bill was amended into a different topic area and subsequently chaptered.)
SB 45 (Allen, 2019) would have enacted the Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020, authorizing $5.51 billion in general obligation bonds for wildfire prevention, safe drinking water, drought preparation, and flood protection, as provided. (This bill was held at the Assembly Desk.)
SB 5 (De León, Chapter 852, Statutes of 2017) enacted the California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access for All Act of 2018, authorizing $4.1 billion in general obligation bonds for drought, water, parks, climate, coastal protection, and outdoor access for all projects, as provided. (This bill became Proposition 68 and was passed by voters in June 2018.)
AB 1471 (Rendon, Atkins, and Gomez, Chapter 188, Statutes of 2014) enacted the Water Quality, Supply, and Infrastructure Improvement Act of 2014, which authorized $7.545 billion in general obligation bond funding for water-related projects and programs with voter approval. (This bill became Proposition 1 and was passed by voters in November 2014.)
AB 140 (Nunez/Perata, Chapter 33, Statutes of 2006) enacted the Disaster Preparedness and Flood Prevention Bond Act of 2006, which authorized approximately $4.1 billion in general obligation bond funding for various flood management programs with voter approval. (This bill became Proposition 1E and was passed by voters in November 2006.)
Staff Comments:
The SOS indicates that printing and mailing costs associated with placing a measure on the statewide ballot are about $123,000 per page based on the average for the last three elections and depending on the length of the ballot. The fiscal estimates noted above reflect the addition of 6-8 pages in the Voter Information Guide. Actual costs would depend upon the length of the title and summary, analysis by the Legislative Analyst’s Office, proponent and opponent arguments, and text of the proposal.
-- END --
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Anna M. Caballero, Chair
2023 - 2024 Regular
Bill No: | SB 638 | Hearing Date: | 4/19/23 |
Author: | Eggman | Tax Levy: | No |
Version: | 3/20/23 | Fiscal: | Yes |
Consultant: | Grinnell | ||
Climate Resiliency and Flood Protection Bond Act of 2024
Enacts the Climate Resiliency and Flood Control Bond Act of 2024, which places a $6 billion general obligation bond before voters in the November 2024, general election to finance flood control efforts.
Background
When public agencies issue bonds, they essentially borrow money from investors, who provide cash in exchange for the agencies’ commitment to repay the principal amount of the bond plus interest in the future. Bonds are usually either revenue bonds, which repay investors out of revenue generated from the project the agency buys with bond proceeds or from a specific dedicated revenue source, or general obligation (GO) bonds, which the public agency pays out of general revenues and are guaranteed by its full faith and credit.
State general obligation bonds. Section One of Article XVI of the California Constitution and the state’s General Obligation Bond Law guide the issuance of the state’s GO debt. The Constitution allows the Legislature to place GO bonds on the ballot for specific purposes with a two-thirds vote of the Assembly and Senate. Voters also can place bonds on the ballot by initiative, as they have for parks, water projects, high-speed rail, and stem cell research, among others. Either way, GO bonds must be ratified by majority vote of the state’s electorate. Unlike local GO bonds, approval by the state’s electorate does not automatically trigger an increased tax to repay the bond. The Constitution commits the state to repay investors from general revenues above all other claims, except payments to public education.
California voters approved $38.4 billion of GO bonds between 1974 and 1999, which increased significantly to $112 billion between 2000 and 2010, then decreased to slightly less than $28 billion between 2010 and 2018. In 2020, voters approved Proposition 14, which authorized $5.5 billion state bonds for stem cell and other medical research.
Bond acts have standard provisions that authorize the State Treasurer to sell a specified amount of bonds, and generally include several uniform provisions that:
- Establish the state’s obligation to repay them, and pledge its full faith and credit to repayment;
- Set forth issuance procedures, and link the bond act to the state’s General Obligation Bond Law;
- Designate a finance committee with specified membership, chaired by the State Treasurer;
- Charge the committee with determining whether it is “necessary or desirable” to issue the bonds; and
- Add other mechanisms necessary for the State Treasurer and the Department of Finance (DOF) to implement the bond act, including allowing the board to request a loan from the Pooled Money Investment Board to advance funds for bond-funded programs prior to the bond sale, among others.
In bond acts, the Legislature generally:
- Sets forth categories of projects eligible for bond funds, such as library construction or school facility modernization;
- Chooses an administrative agency to award the funds, such as the State Librarian or the State Allocation Board;
- Details the criteria to guide the administrative agency’s funding in each category,
- Enacts enforcement and audit provisions; and
- Provides for an election to approve the bond act.
Should the voters approve the bond act, the Legislature generally appropriates funds to the chosen agencies to fund projects consistent with the criteria, generally as part of the Budget Act. However, some bond acts do not require direct legislative appropriation, such as school facility bonds. DOF surveys agencies to determine the need for bond funds based on a project’s readiness, and then asks the State Treasurer to sell bonds necessary to fund those projects. After the bond sale, DOF determines which bond acts and agencies receive bond proceeds.
Voters have approved the following Bond Acts that either entirely or partially funded flood control projects:
- Proposition 1E, the Disaster Preparedness and Flood Prevention Bond Act of 2006, which authorized the issuance of GO bonds totaling approximately $4.1 billion for various flood management programs (AB 140, Nunez, 2006). These included the State Central Valley Flood Control System and Delta Levees ($3 billion), flood control subventions ($500 million), stormwater flood management ($300 million), and statewide flood protection corridors and bypasses ($290 million).
- Additionally, voters approved the Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006, which authorized $5.4 billion in bonds (Proposition 84).
More recently, the Legislature enacted, and voters approved, Proposition 1, the Water Quality, Supply, and Infrastructure Improvement Act of 2014, which authorized $7.1 billion in new bonds for water quality and supply infrastructure (AB 1471, Rendon, 2014), and Proposition 68 (2018), the $4 billion California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access for All Act of 2018, (SB 5, De Leon, 2017). According to the State Treasurer, while almost all of the Proposition 1E and Proposition 84 bonds have been sold, $3.1 billion in Proposition 68 and $4.9 billion in Proposition 1 bonds have not yet been sold.
In December 2022, the Central Valley Flood Protection Board approved the Central Valley Flood Protection Plan’s 2022 update (2022 update). The 2022 update notes that “despite our great strides in reduced flood risk since the first Central Valley Flood Protection Plan was adopted in 2012, climate change is accelerating this risk faster than we have been able to address it.” The 2022 update includes strategies implementing nature-based solutions to reduce climate risk, where possible, and infrastructure improvements to reduce flood risk and the social and economic costs of flooding. The 2022 update outlines an investment in flood management estimated to cost $25 billion to $30 billion over the next 30 years in order to help avoid the up to $1 trillion “astronomical cost” of catastrophic flooding in the Central Valley. The 2022 update acknowledges that “socially vulnerable populations face disproportionate flood risk because of a variety of social, economic, and political factors, and that flood events exacerbate existing racial and social inequities.”
Seeking to reduce risk from catastrophic flood, especially among socially vulnerable populations, the author wants to place a measure before voters authorizing $6 billion in GO bonds for flood control projects.
Proposed Law
Senate Bill 638 enacts the Climate Resiliency and Flood Control Bond Act of 2024, which places a $6 billion GO bond before voters in the November 2024, general election to finance flood control efforts, flood protection and climate resilience in the Delta, and dam safety projects. If approved, the measure directs proceeds of bonds issued and sold to be deposited in the Climate Resiliency and Flood Control Fund which the bill creates in the State Treasury.
SB 638 directs the Legislature to appropriate the proceeds of the sale of bonds to the Department of Water Resources (DWR) for the following:
- $2.5 billion for the State Central Valley Flood Control System (State Plan of Flood Control) for the evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses and facilities, including implementing actions consistent with the 2022 update, flood emergency response projects, restoring bypass design capacity, and participation in a Habitat Conservation Plan or Natural Community Conservation Plan, among others. DWR must collaborate with local agencies to obtain the maximum matching funds to fund disaster preparedness and flood prevention projects, and to prioritize project selection and design to achieve the maximum public benefits, as provided. Of these amounts:
- $300 million is available for the repair, rehabilitation, reconstruction, replacement, or improvement of levees that protect nonurbanized areas and undeveloped areas, as provided.
- $500 million is available for the repair, rehabilitation, reconstruction, replacement, or improvement of levees on the San Joaquin River and its tributaries.
- $500 million for projects in the Delta to increase flood protection and climate resiliency, including for local assistance for the delta levee maintenance subventions, special flood protection projects, and flood emergency response projects. Special flood protection projects shall have the principal purpose of the preservation, protection, rehabilitation and improvement of existing levees to improve protection against the threat of earthquake and sea level rise, as provided, and may include other project purposes such as the protection of drinking water quality and preventing salt water intrusion, among others.
- $1 billion to DWR for the payment of the state’s share of nonfederal costs, and related costs of flood protection and climate resiliency projects under various existing laws for projects that are not part of the State Plan of Flood Control.
- $1 billion to DWR for flood management projects that are components of multiple benefit flood management system improvements that reduce risks to public safety; provide greater resiliency from the effects of climate change, extreme weather events, and sea level rise; and provide improvement to aquatic and wildlife habitat. Eligible projects include natural infrastructure projects to reduce flood intensity and slow watershed runoff; multiple benefit flood management projects that reduce the impacts of climate change on infrastructure and provide ecosystem, wildlife, or groundwater recharge benefits; and the construction of new levees for the establishment of a flood protection corridor, among others. Of the $1 billion, SB 638 allocates $100 million specifically for multiple benefit flood management projects in urban coastal watersheds.
- $1 billion to DWR to provide state funding to local agencies for replacement, repairs, rehabilitation, improvements, and other dam safety projects at existing dams and associated facilities, including dam safety projects at existing dams designated as “high hazard” or “extremely high hazard” by DWR. To be eligible, dam safety improvement projects must provide public benefits, including the protection of public safety, water supply enhancement, and protection of water quality, among others
SB 638 requires DWR to develop project solicitation and evaluation guidelines, and conduct three public meetings regarding the guidelines in each of Northern and Southern California, and the San Joaquin Valley. DWR must publish draft guidelines before the meetings, and provide outreach to disadvantaged communities to promote access and participation in public meetings to provide input on the guidelines.
DWR can make advance payments to local agencies for projects that improve flood protection and restore habitat, as specified. The amount of funds advanced at any one time cannot be more than 25% of the total amount authorized, with certain exceptions. For advance payments, DWR must:
- Prioritize projects and recipients serving disadvantaged, low-income, and under-resourced communities, as specified.
- Stipulate an advance payment structure and request process within the grant agreement of contract.
- Adopt requirements regarding the use of the advance payment to ensure proper use of funds.
SB 638 caps administrative costs for a grant program at 5% of the funds allocated, and allows up to 10% of each program’s funds to be used for planning and monitoring, with certain exceptions for disadvantaged communities. The measure requires DOF to provide for an independent audit of Act expenditures, and requires certain additional transparency and accountability provisions. The bill prohibits the use of its funds to pay certain costs associated with Delta conveyance facilities.
The bill also incorporates standard provisions in GO bond law, either explicitly or by reference, with some modifications. The measure creates the California Disaster Preparedness and Flood Prevention Finance Committee and is comprised of the Director of Finance, the Treasurer, and the Controller. SB 638 charges the committee with determining whether it is necessary or desirable to issue bonds, and if so, the amount of bonds to be issued and sold.
The bill defines many of its terms, includes an urgency clause, and also states legislative findings and declarations supporting its purposes.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill. According to the author, “California passes water and resources bonds with some regularity, and they all generally contain a small percentage for flood protection projects. However, the amounts set aside for flood protection projects don’t come close to covering the costs required to safeguard our state. Nor have the funds ended up where they are needed most. Poor communities and communities of color, who already face an uphill funding battle due to historic disinvestments, have not received an equitable share of past flood protection dollars. They sit at the back of the line because their communities often lack the financial resources to front the initial costs of planning and design that are necessary for a local flood project to attract state and federal funding. Proactive investments in communities and flood protection projects are more cost-effective than paying to fix the damage caused by a flood. We need swift and bold investments that prioritize California’s most vulnerable communities and populations now, and SB 638 provides those bold investments.
2. Sixteen tons. Setting the right amount of state GO debt is difficult; both the State Treasurer and the Legislative Analyst’s Office (LAO) state that there is no correct level. Instead, experts suggest that states should look at three criteria: affordability, comparability, and optimality.[1]
California currently has $67.9 billion of GO and $8.1 billion of lease revenue debt outstanding, which is affordable. The Governor’s 2021 Five-Year Infrastructure Plan estimates that the Debt Service Ratio, or the ratio between debt service and general fund revenues, as 2.68% in 2021-22, 2.84% in 2022-23, and between 2.67% and 2.7% for the next three fiscal years. Annual expenditures on debt service have grown from $2.9 billion in 2000-01 to $5.8 billion in 2025-26. Additionally, all but 1.4% in outstanding debt is paid at a fixed rate of interest. While debt service is currently a small part of the State’s Budget, every dollar spent on debt service reduces the funding that is available for other priorities.
California’s comparability to other states is less favorable, but has improved significantly in recent years. The State Treasurer’s 2022 Debt Affordability Report (DAR), issued last October, contains the following information:
Debt Ratios Of 10 Most Populous States, Ranked By Ratio Of Debt To Personal Income | ||||
State | Moody’s/ S&P/ | Debt to personal income(b) | Debt per capita(b) | Debt as a % |
Texas | Aaa/AAA/AAA | 1.1% | $682 | 1% |
North Carolina | Aaa/AAA/AAA | 1.2% | $686 | 1.1% |
Florida | Aaa/AA/AAA | 1.2% | $756 | 1.3% |
Michigan | Aa1/AA/AA+ | 1.5% | $833 | 1.5% |
Georgia | Aaa/AAA/AAA | 2% | $1,087 | 1.7% |
Pennsylvania | Aa3/A+/AA+ | 2.5% | $1,616 | 2.5% |
Ohio | Aa1/AA+/AA- | 3% | $1,718 | 2.7% |
California Illinois | Aa2/AA-/AA Baa1BBB+-/BBB+ | 3.2% 4.4% | $2,458 $2,958 | 2.9% 4% |
New York | Aa1/AA+/AA+ | 5.1% | $3,871 | 4.1% |
Moody’s Median All States | 2.1% | $1,179 | 2.1% | |
Median For The 10 Most Populous States | 2.25% | $1,352 | 2.1% | |
(a) Moody’s, Standard & Poor’s, and Fitch Ratings as of August, 2022 (b) Figures as reported by Moody’s in its 2022 State Debt Medians Report based on 2021 fiscal data, except for California, which reflect fiscal 2020. (c) State GDP numbers have a one-year lag. | ||||
Determining optimality, or whether government is investing in the quantity and quality of public capital desired by residents, and financing the appropriate share with debt, is more difficult. LAO recommends that the Legislature consider the Governor’s annual Five-Year Infrastructure Plan as a starting point to developing a coordinated approach to infrastructure funding, and establish a committee to focus on statewide infrastructure.
3. The good news. Ratings issued from the three major credit rating agencies often inform investors and the public regarding the state’s creditworthiness, and assess any investment risk from investing in California GO bonds. Rating agencies Fitch, Standard and Poor’s, and Moody’s have praised California’s deep and diverse economy, recent balanced and on-time budgets, reduced budget deficits, and improved reserves and liquidity. However, the agencies also state that California faces challenges: a highly volatile revenue system, constitutionally-imposed governance restrictions, high housing costs that threaten economic growth, and minimal prefunding of retiree health care benefits, among others. Once considered an outlier, the “credit spread” between California bonds and other states as measured by the benchmark 30-year Municipal Market Data Index has tightened significantly in the last ten years; credit spreads represent the difference in yield between two bonds of similar maturity but different credit quality. The DAR notes that California’s credit spread has declined from a high of more than 150 basis points at the end of 2009 to as narrow as four basis points in September 2018, and was 24 points in June 2022.
4. The bad news. California has a distinct problem: of the $156.4 billion in GO bonds that voters have authorized, around $27 billion hasn’t been issued yet. Among others, the state hasn’t issued more than $5.2 billion from the Stem Cell Research Bond approved in 2020, $5 billion from the 2014 water bond, and $4.6 billion to fund high speed rail. According to the Treasurer, the state has issued an average of $7.9 billion of GO bonds annually. The Treasurer expects similar issuance amounts in future years. While the state has made great progress reducing the amount of authorized, unissued bonds in recent years, many bond-funded projects have not yet received required approvals. Market appetite and debt service payments limit the amount of GO bonds the state can sell. As a result, projects with voter-approved bond authority, as well as any new GO bond-funded projects, may have to wait to receive the necessary cash.
5. Rates. In March 2020, in response to the COVID-19 pandemic, the Federal Open Markets Committee cut the federal funds rate twice, setting the range between zero and 0.25%. One year later, in response to rising inflation, the Committee began a series of rate increases, with a current range of 4.75% to 5%. Changes in the federal funds rates has broad effects on the economy, including for states when issuing GO bonds; higher interest rates mean that borrowers pay more when borrowing the same amount of debt, all else equal. The conflict in Ukraine, the lingering impacts from the COVID-19 pandemic, and other trends have caused market fluctuations in interest rates for governments issuing tax-exempt debt. According to the DAR, until October 2021, tax-exempt rates lagged and remained low through the end of December; however, starting in January 2022, tax-exempt interest rates began to rise sharply, snapped back briefly in May and early June, but those gains reversed very quickly. Data from the state’s last four bond sales demonstrates these fluctuations:
- Bond sales between March 2020 and 2021 generally had all-in interest costs just above 2%, and yields between 0.06% and 2.58% depending on duration.
- The March 2022 sale of $2.3 billion in bonds had an all-in true interest cost of 3.09%, and yields ranging from .94% to 3.29%.
- The September 2022 sale of $2.3 billion in bonds had an all-in true interest cost of 3.93%, and yields ranging from 2.34% to 4.3%.
- The April 2023 sale of $2.6 billion in bonds had an all-in true interest cost of 3.63%, and yields ranging between 2.21% to 3.98%.
Given recent fluctuations in interest rates, it’s unclear what the true cost to the state’s General Fund will be when currently authorized, or any newly approved, bonds are sold. For example, a $6 billion bond with a 30 year maturity issued at a 2% interest rate would have a total debt service of $8.03 billion, or $268 million per year. The same bond issued at a 4% interest rate has a total debt service of $10.4 billion, or $347 million per year assuming the same inflation rate and yield.
6. Future attractions. In addition to SB 638’s proposed $6 billion for flood control, three other Senate Bills seek to place authorizations for GO bonds before voters:
- SB 28 (Glazer) proposes $15.5 for preschool, K-12, CSU, and UC facilities. The Committee on Education approved the bill by a vote of 7 to 0 on March 22, and it will be heard by the Governance & Finance Committee at its April 19th hearing.
- SB 834 (Portantino) proposes $25 billion for home ownership and construction. The measure is set for hearing in the Committee on Housing at its April 18th hearing. If approved, the Governance & Finance Committee will consider the measure at its April 26th hearing.
- SB 867 (Allen) proposes $4.1 billion for drought, wildfire, and other climate resilience projects. The measure is set for hearing in the Governance and Finance Committee for April 26th.
7. Incoming! The Committee on Natural Resources approved SB 638 by a vote of 9 to 0 on March 28th. The Governance and Finance Committee is hearing the bill as the committee of second reference.
Support and Opposition
(4/14/23)
Support:
Bay Area Council
California Central Valley Flood Control Association
Elsinore Valley Municipal Water District
Irvine Ranch Water District
Knights Landing Ridge Drainage District
Little Egbert Joint Powers Agency
Quad-c, Ltd., Landowner
Reclamation District 1000
Reclamation District 150
Reclamation District 2033
Reclamation District 2037
Reclamation District 349
Reclamation District 900
Reclamation District 999
Reclamation District No. 108
Reclamation District No. 548
Reclamation District No. 784
River Partners
Sacramento Metropolitan Chamber of Commerce
Sacramento River West Side Levee District
San Joaquin Area Flood Control Agency
Solano County Water Agency
Sutter Butte Flood Control Agency
Valley Ag Water Coalition
Opposition: None submitted
-- END --
Robert Wassmer and Ronald Fisher “Debt Burdens of California State and Local Governments: Past, Present and Future.” As requested and supported by the California Debt and Investment Advisory Commission. July 2011. ↑
SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
Senator Dave Min, Chair
2023 - 2024 Regular
Bill No: SB Hearing Date: March 28, 2023
Author: | Eggman | ||
Version: | March 20, 2023 Amended | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Katharine Moore | ||
Subject: Climate Resiliency and Flood Protection Bond Act of 2024
BACKGROUND AND EXISTING LAW
- According to July 2022 polling by the Public Policy Institute of California, Californians are most likely to name water supply and drought, followed by wildfires and climate change, as the most important environmental issues the state faces. In the same poll, overwhelming majorities raise concerns about water supply and protecting the condition of the state’s oceans and beaches.
- The fiscal year 2021/2022 (FY 2021/22) and FY 2022/23 budget packages included $27 billion, according to the Legislative Analyst’s Office (LAO), for numerous activities related to mitigating and addressing climate change, as well as protecting and restoring natural resources and the environment. Additional agreements for future budget years would have provided funding on the order of $40.2 billion over five years. The source of most of this funding was the state’s General Fund, and represented a significant increase of General Fund monies dedicated to natural resources and climate compared to previous budgets.
- The state’s fiscal outlook has declined since the FY 2022/23 budget passed. Given the projected decline in revenues to the State’s General Fund, the Governor’s January 2023 budget proposed $5.5 billion in “General Fund solutions” – both cuts and funding delays – from these programs. Proposed spending reductions vary between different programs. Coastal resilience program funding is reduced by almost half. Water and drought resilience-related reductions were on the order of a few percent, although another 4% or so was delayed. In addition, the Governor proposed new $139 million in one-time General Fund monies for flood management programs in January.
- The LAO notes that significant needs to address climate change, natural resources, and the environment remain. When presenting the January 2023 budget, Governor Newsom noted that a resources bond could help address some of the funding needs in these areas.
- California voters have approved seven resources-related bonds since 2000 (Propositions 12 (2000), 40 (2002), 50 (2002), 84 (2006), 1E (2006), 1 (2014), and 68 (2018)). Bonds can be placed on the ballot by citizen’s initiative and by the Legislature. Bonds are often used to finance capital outlay projects to help spread the cost over the years the proposed projects provide services. State voters have approved general obligation bonds for a variety of purposes including, for example, education, housing, high-speed rail, correctional facilities, and veterans.
- In June 2018 California voters approved Proposition 68, the California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access for All Act of 2018, which authorized the issuance of general obligation bonds totaling $4.1 billion to finance drought, water, parks, climate, coastal protection, and outdoor access for all programs. This was the most recently-approved resources-related bond approved by state voters.
- The most recent statewide bond primarily dedicated to flood management was passed in November 2006. California voters approved Proposition 1E, the Disaster Preparedness and Flood Prevention Bond Act of 2006, which authorized the issuance of general obligation bonds totaling approximately $4.1 billion for various flood management programs. These included the State Central Valley Flood Control System and Delta Levees ($3 billion), flood control subventions ($500 million), stormwater flood management ($300 million), and statewide flood protection corridors and bypasses ($290 million).
- In December 2022, the Central Valley Flood Protection Board approved the Central Valley Flood Protection Plan’s 2022 update (2022 update). The 2022 update notes that “despite our great strides in reduced flood risk since the first Central Valley Flood Protection Plan was adopted in 2012, climate change is accelerating this risk faster than we have been able to address it.” The 2022 update includes strategies implementing nature-based solutions to reduce climate risk, where possible, and infrastructure improvements to reduce flood risk and the social and economic costs of flooding. The 2022 update outlines an investment in flood management estimated to cost $25 billion to $30 billion over the next 30 years in order to help avoid the up to $1 trillion “astronomical cost” of catastrophic flooding in the Central Valley.
- The 2022 update acknowledges that “socially vulnerable populations face disproportionate flood risk because of a variety of social, economic, and political factors, and that flood events exacerbate existing racial and social inequities.”
- Recent research on the potential for a megastorm to occur in the state using the latest science and modeling tools suggests that climate change is rapidly increasing the risk of a California megaflood. The researchers recommend that the state’s water and flood management policies and infrastructure will have to be “substantially revamped” to adapt to both increasing water scarcity, and the sharply increasing risk of large flood events and increasing precipitation intensity when rains occur.
- Existing law authorizes, pursuant to Section One of Article XVI of the California Constitution and the State General Obligation Bond Law, the issuance of general obligation bonds.
- Existing law further authorizes the Legislature to place general obligation bonds on the ballot for specific purposes with a two-thirds vote of the Assembly and Senate.
PROPOSED LAW
This bill would enact the Climate Resiliency and Flood Protection Bond Act of 2024 (Act) which, if approved by voters on the November 5, 2024 statewide election ballot, would authorize $6 billion in general obligation bonds for flood protection and climate resiliency projects, as provided. The bond act is organized as follows:
Chapter 1. General Provisions
Chapter 2. Climate Resiliency and Flood Protection
Chapter 3. Fiscal Provisions
Chapter 1: General Provisions
- Makes extensive legislative findings and declarations justifying the need for the Act, and defines various terms.
- Requires the California Department of Water Resources (DWR) to develop project solicitation and evaluation guidelines with public input, as provided, and requires DWR to include outreach to disadvantaged communities to promote access and participation in public meetings to provide input to the guidelines.
- Authorizes DWR to provide advance payments to local agencies for projects that improve flood protection and restore habitat, as specified. The amount of funds advanced at any one time cannot be more than 25% of the total amount authorized, with certain exceptions.
- Requires DWR to prioritize projects and recipients serving disadvantaged, low-income, and under-resourced communities, as specified.
- Limits administrative costs for a grant program to 5% of the funds allocated.
- Authorizes up to 10% of each program’s funds to be used for planning and monitoring, with certain exceptions for disadvantaged communities, as provided.
- Requires the California Department of Finance to provide for an independent audit of Act expenditures, and requires certain additional transparency and accountability provisions.
- Prohibits Act funds from being used to pay certain costs associated with Delta conveyance facilities.
Chapter 2: Climate Resiliency and Flood Protection
- Establishes bond amounts totaling $6 billion for various programs to be available, subject to legislative appropriation, as follows:
$2.5B • To DWR for the State Central Valley Flood Control System (State Plan of Flood Control) for the evaluation, repair, rehabilitation, reconstruction, expansion, or replacement of levees, weirs, bypasses and facilities, including implementing actions consistent with the 2022 update, flood emergency response projects, restoring bypass design capacity, and participation in a Habitat Conservation Plan or Natural Community Conservation Plan, among others.
• $300M to be available for the repair, rehabilitation, reconstruction, replacement, or improvement of levees that protect nonurbanized areas and undeveloped areas, as provided.
• $500M to be available for the repair, rehabilitation, reconstruction, replacement, or improvement of levees on the San Joaquin River and its tributaries.
• Require DWR to collaborate with local agencies to obtain the maximum matching funds to fund disaster preparedness and flood prevention projects, and to prioritize project selection and design to achieve the maximum public benefits, as provided.
$500M • To DWR for projects in the Delta to increase flood protection and climate resiliency, including for local assistance for the delta levee maintenance subventions, special flood protection projects, and flood emergency response projects.
• Special flood protection projects shall have the principal purpose of the preservation, protection, rehabilitation and improvement of existing levees to improve protection against the threat of earthquake and sea level rise, as provided, and may include other project purposes such as the protection of drinking water quality and preventing salt water intrusion, among others.
$1B • To DWR for the payment of the state’s share of nonfederal costs, and related costs of flood protection and climate resiliency projects under various existing laws, as provided, and for projects that are not part of the State Plan of Flood Control.
$1B • To DWR for flood management projects that are components of multiple benefit flood management system improvements that reduce risks to public safety; provide greater resiliency from the effects of climate change, extreme weather events, and sea level rise; and provide improvement to aquatic and wildlife habitat, as provided.
- Eligible projects include natural infrastructure projects to reduce flood intensity and slow watershed runoff; multiple benefit flood management projects that reduce the impacts of climate change on infrastructure and provide ecosystem, wildlife, or groundwater recharge benefits; and the construction of new levees for the establishment of a flood protection corridor, among others.
- $100M for multiple benefit flood management projects in urban coastal watersheds.
$1B • To DWR to provide state funding to local agencies for replacement, repairs, rehabilitation, improvements, and other dam safety projects at existing dams and associated facilities. This includes dam safety projects at existing dams designated as “high hazard” or “extremely high hazard” by DWR, as provided. Dam safety improvement projects are required to provide public benefits, including the protection of public safety, water supply enhancement, and protection of water quality, among others.
- Projects are required to be selected on a competitive basis including whether the project is cost effective and provides public benefits, among other requirements.
=========
$6B total
Chapter 9. Fiscal Provisions
- Establishes how the bonds are to be issued and the funds managed, including, among other requirements:
- All of the provisions of the State General Obligation Bond Law would apply to this Act and the associated bond, except:
- The expenditure of bond funds would not be limited to the costs of construction of acquisition of capital assets, as defined in the State General Obligation Bond Law.
- The use of bond funds to make grants or loans would not be limited to funding the cost of construction or acquisition of capital assets.
- Funds authorized by this Act could be used for grants and loans to nonprofit organizations to repay financing related to projects that are consistent with the purpose of the relevant provisions of this Act.
ARGUMENTS IN SUPPORT
According to the author, “California passes water and resources bonds with some regularity, and they all generally contain a small percentage for flood protection projects. However, the amounts set aside for flood protection projects don’t come close to covering the costs required to safeguard our state. Nor have the funds ended up where they are needed most.”
“Poor communities and communities of color, who already face an uphill funding battle due to historic disinvestments, have not received an equitable share of past flood protection dollars. They sit at the back of the line because their communities often lack the financial resources to front the initial costs of planning and design that are necessary for a local flood project to attract state and federal funding.”
“Proactive investments in communities and flood protection projects are more cost-effective than paying to fix the damage caused by a flood. We need swift and bold investments that prioritize California’s most vulnerable communities and populations now, and SB 638 provides those bold investments.”
ARGUMENTS IN OPPOSITION
None received
COMMENTS
This bill is double-referred. This bill is double-referred to the Senate Governance and Finance Committee. Elements of the bill, such as the provisions of Chapter 9, in the jurisdiction of the Senate Governance and Finance Committee will be discussed before that Committee and are included here for completeness and context only.
This bill is a work-in-progress. The current language in the bill is primarily a flood protection and management bond with certain additional provisions related to dams. Climate resiliency is provided principally through the lens of flood management. The Committee may wish to direct the author to consider the following as the bill moves forward:
- Broader approach to climate resiliency and natural resources. In view of the overwhelming need for resources funding, the author should give consideration to providing an appropriate balance of priorities to improve climate resiliency across a broader range of projects to optimize the benefits of the bond statewide while still providing for specific flood management priorities. Further, consideration should be taken to ensure that the requirements for various programs do not inadvertently undermine existing state policy.
- Alignment with existing state plans. Existing state plans identify numerous priority activities for funding to provide climate resiliency related to natural resources including flood management. In addition to the 2022 update, these include the California Water Resilience Portfolio, the California Water Plan and its updates, and implementation of the Sustainable Groundwater Management Act, as well as the Safeguarding California, Pathways to 30x30: Accelerating Conservation of California’s Nature, and the Extreme Heat Action Plan, among others. Many of the priority activities identified in these plans are appropriate for bond financing, and some are incorporated in the bill’s language.
- The dam language. Recent amendments to the bill added the $1B provision related to dams. The bill’s language appears to include many elements of the recently-proposed budget trailer bill language for a Dam Safety and Climate Resilience Local Assistance Program now pending before the Legislature. This trailer bill language and the bill’s language include provisions that makes water supply a public benefit and thus eligible for taxpayer funding. This is a substantive change from existing policy including the negotiated balance in Proposition 1 which required appropriate public benefits from public funding, and upends the principle of “beneficiary pays” for private benefits. The bill’s language should be reviewed to ensure that private benefits are not subsidized by the state’s taxpayers. In addition, the author may wish to consider whether dam safety projects at “extremely high hazard” dams should be prioritized over those at “high hazard” dams; whether the condition of the dam (i.e. “fair” or “poor”) or other additional criteria should be a consideration in funding dam safety projects; and revise the current language to more fully realize the author’s stated goals.
- Ensuring equity. The bill’s language prioritizes disadvantaged, low-income, and under-resourced communities for bond funding, and includes outreach and other provisions, such as possible waivers of certain requirements, to help ensure equity. As the bill moves forward, the author should consider whether additional provisions, such as capacity building, further explicit direction to DWR, and technical assistance, may help to further realize this goal.
- Technical amendments. There is language in the current version of the bill where minor changes may help to more fully realize the author’s goals. Committee staff will provide a mark-up to the author’s staff.
The Committee may wish to direct Committee staff to continue working with the author’s office as the bill moves forward. The Committee may further wish to re-hear the bill when its language is more fully realized.
Overwhelming need. The Winter 2022/23 atmospheric river storms are already estimated to have caused billions of dollars in cumulative damages, including from flooding in Tulare Lake and Pajaro. Advance preparation is cost effective - according to the LAO in a recent publication, the Federal Emergency Management Agency reports that $1 spent in various types of pre-disaster mitigation activities avoids public and private losses of $6 total.
Amendment requests. In taking “support, if amended” positions, the Association of California Water Agencies asks for additional provisions related to urban flood risk and coastal flood risk protection, and the California Municipal Utilities Association seeks to ensure that all areas of the state are eligible for funding
Existing resources bonds are mostly expended or encumbered. There is approximately $281 million remaining of the $4.1 billion authorized under Proposition 68 in 2018. Similarly there is approximately $40 million remaining of the $7.545 billion authorized under Proposition 1 in 2014.
Recent related legislation
SB 867 (Allen, 2023) would enact the Drought and Water Resilience, Wildfire and Forest Resilience, Coastal Resilience, Extreme Heat Mitigation, Biodiversity and Nature-Based Climate Solutions, Climate Smart Agriculture, and Park Creation and Outdoor Access Bond Act of 2023, authorizing general obligation bonds of an unknown amount for various natural resources-related purposes with voter approval. (This bill is pending before this Committee.)
AB 1567 (E. Garcia, 2023) would enact the Safe Drinking Water, Wildfire Prevention, Drought Preparation, Flood Protection, Extreme Heat Mitigation, and Workforce Development Bond Act of 2023, authorizing $15.1 billion in general obligation bonds for safe drinking water, wildfire prevention, drought preparation, flood protection, extreme heat mitigation, and workforce development programs. (This bill is pending before the Assembly Water Parks and Wildlife Committee.)
SB 45 (Portantino, 2021) would have enacted the Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2022, authorizing $5.51 billion in general obligation bonds for wildfire prevention, safe drinking water, drought preparation, flood protection, and related topics with voter approval. (This bill was amended into a different topic area and subsequently chaptered.)
SB 45 (Allen, 2019) would have enacted the Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020, authorizing $5.51 billion in general obligation bonds for wildfire prevention, safe drinking water, drought preparation, and flood protection, as provided. (This bill was held at the Assembly Desk.)
SB 5 (De León, Chapter 852, Statutes of 2017) enacted the California Drought, Water, Parks, Climate, Coastal Protection, and Outdoor Access for All Act of 2018, authorizing $4.1 billion in general obligation bonds for drought, water, parks, climate, coastal protection, and outdoor access for all projects, as provided. (This bill became Proposition 68 and was passed by voters in June 2018.)
AB 1471 (Rendon, Atkins, and Gomez, Chapter 188, Statutes of 2014) enacted the Water Quality, Supply, and Infrastructure Improvement Act of 2014, which authorized $7.545 billion in general obligation bond funding for water-related projects and programs with voter approval. (This bill became Proposition 1 and was passed by voters in November 2014.)
AB 140 (Nunez/Perata, Chapter 33, Statutes of 2006) enacted the Disaster Preparedness and Flood Prevention Bond Act of 2006, which authorized approximately $4.1 billion in general obligation bond funding for various flood management programs with voter approval. (This bill became Proposition 1E and was passed by voters in November 2006.)
SUGGESTED AMENDMENTS: none
SUPPORT
California Central Valley Flood Control Association (sponsor)
Association of California Water Agencies (if amended)
California Municipal Utilities Association (if amended)
Knights Landing Ridge Drainage District
Quad-C, Ltd.
Reclamation District No. 108
Reclamation District No. 150
Reclamation District No. 349
Reclamation District No. 548
Reclamation District No. 784
Reclamation District No. 900
Reclamation District No. 999
Reclamation District No. 1000
Reclamation District No. 2033
Reclamation District No. 2037
River Partners
Sacramento River Westside Levee District
Solano County Water Agency
Sutter Butte Flood Control Agency
Yuba Water Agency
OPPOSITION
None Received
-- END --
Discussed in Hearing
10MIN
Senate Floor
10MIN
Senate Standing Committee on Governance and Finance
15MIN
