Bill Would Bar Private Enterprise from Participating in Bond-funded Storage Projects

June 24, 2010

California congressmen Jared Huffman (D-San Rafael) and Dave Cogdill (R-Modesto) have sponsored legislation that would modify the $11.14 billion bond measure slated for voter approval in November pursuant to the 2009 omnibus water legislation (SB X7-2 [“SB 2”]). Assembly Bill 2775 (“AB 2775”) would amend the bond measure to delete a provision allowing nongovernmental entities to participate in water storage projects funded by bond proceeds.

In its current form, chapter 8 of the bond measure would provide $3 billion for surface and groundwater projects. Those funds could be provided to local joint powers authorities to design, acquire, and construct water storage projects. As written, SB 2 allows joint powers authorities to include governmental and nongovernmental partners that are not located within their respective hydrological regions to participate in financing the project. Critics charge that SB 2 would allow nongovernmental, non-local entities to profit from such projects.

AB 2775 would delete the provision authorizing joint powers authorities to include governmental and nongovernmental partners not located within their hydrologic regions in financing the surface storage projects. (See AB 2775, Amended June 17, 2010, http://info.sen.ca.gov/pub/09-10/bill/asm/ab_2751-2800/ab_2775_bill_20100617_amended_sen_v98.html.)

On June 22, 2010, AB 2775 was heard in the Senate Natural Resources and Water Committee. A two-thirds vote is required to enact AB 2775. As an urgency statute, the bill would take effect immediately and the changes made by AB 2775 would be included in the version of SB 2 submitted to voters at the November 2, 2010 general election.

Proponents of the $11 billion water bond measure hope passage of AB 2775 will increase voter support for the measure in this November's election.

If you have any questions or concerns, please contact the following from our office, or the attorney with whom you normally consult.

Eric Robinson or Rebecca Akroyd | 916.321.4500