Proposition 84

Proposition 84:
Water Quality, Safety and Supply.
Flood Control. Natural Resource Protection.
Park Improvements.

By

Ethan Quinn
J.D., University of the Pacific, McGeorge School of Law
to be conferred May, 2008
B.A., History, University of California, Davis, 2003

Copyright © 2006 by University of the Pacific McGeorge School of Law

Table of Contents

I. Executive Summary
II. The Law
III. The Effects of Proposition 84
IV. Drafting Issues
V. Constitutional Issues
VI. Fiscal and Policy Considerations
VII. Public Policy Debate
VIII. Conclusion

I. Executive Summary

Proposition 84 would fund water, flood control, natural resources, park and conservation projects by authorizing $5,388,000,000 in general obligation bonds. The bonds would be used to fund various projects aimed at (1) improving drinking and agricultural water quality and management; (2) preserving, restoring and increasing public access to rivers and beaches; (3) improving flood control, and (4) planning for overall statewide water use, conveyance, and flood control. These bonds will be paid off from the state general fund over a period of 30 years for an estimated total cost of $10.5 billion. If passed, Proposition 84 would represent the largest parks and water bond in the state’s history.

This proposition is an attempt to address California’s ongoing balancing act of providing water for a growing population, adequate flood protection, and wild and open space. The ballot measure’s goals are weighed against the state’s fiscal difficulties and the public’s fatigue with bond measures. Proposition 84 proposes that California take on debt to invest in parks and water projects.

Proposition 84 is the latest in a series of water related bond initiatives. In 2002 voters passed Proposition 50, authorizing $3.4 billion for several water related projects similar to those in Proposition 84. In 2000 and 2002 Propositions 13 and 40, respectively, were passed providing a combined $3 billion for conservation projects. The funds from the earlier bonds have largely been expended on the projects laid out in the measures.

Proposition 84 would create Division 43: The Safe Drinking Water, Water Quality and Supply, Flood Control, River and Costal Protection Bond Act of 2006. This act contains some drafting and possible constitutional issues, which do not appear to be fatal to the proposed law.

Proponents argue that Proposition 84 will provide healthier water, greater safety from floods, will preserve the environmental qualities of rivers and coastlines, and allow the water infrastructure to keep up with growth. Opponents argue that the state cannot afford the cost, that the Proposition does not provide enough accountability for the money, and that previous similar measures have proven ineffective. Proposition 84 enjoys a wide variety of supporters, including environmental groups, the California Chamber of Commerce and both major party nominees for governor. Opponents are led by the California Taxpayer Protection Committee and the California Board of Equalization.

II. The Law

A. Background

Today’s California of large cities and dense population would not have been possible in California’s natural state. Norris Hundley, The Great Thirst: Californians and Water: A History 2-3 ( University of California Press 2001). The terrain of the state would have been far too dry to sustain the millions that live here today. Id. The state’s existence is owed to the massive hydraulic works that draw water from sources both within and without the state. Id. Even with such measures, the state still suffers a routine overdraft of water, ranging from 1.6 million to 5.1 million acre-feet annually. Id. As such, water concerns have been a dominating political issue from the earliest days of the state’s settlement. Id. at 67.

During California’s growth in last part of the 19 th century through the post World War II era the state government began to take a more active role in water management moving away from more the laissez-faire and local control approach to water law taken in the past. Id. at 97-101. The Federal and State government began to fund major irrigation and damming projects. Id. at 115-120. Most of the projects completed remain invaluable to the existence of the large metropolises of California.

The impact that such projects have had on the pattern of growth in the state cannot be underestimated. Parts of the state that were previously uninhabitable because of flooding are home to cities like Sacramento. Id. at 79-80. While development in those areas has opened the state to growth, the flood risk remains a constant problem. Sacramento Flood History/Overview, http://www.safca.org/ADA/floodRisk/histOverview.html (accessed October 5th, 2006). Adding to those risks, many of the flood control measures implemented are showing signs of their age. Levees constructed by farmers decades ago remain the primary flood protection for densely populated residential communities. Sacramento Flood Threat, http://www.safca.org/ADA/floodRisk/floodThreat.html (Accessed October 5th, 2006).

There has been another price for the development, as increasing demand for water has led to a greater impact on the environment. Hundley, The Great Thirst: Californians and Water: A History at 373-398. By the mid-1980’s, 90% of California’s wetlands were gone, and pollution had fouled many of the state’s waterways. Id. at 398-400. The state passed legislation to address the problem, creating the State Water Resources Control Board to better manage and protect the quality of the state’s water supply. Id. at 402. Its creation led to many other agencies addressing the same problem. Eventually, in order to consolidate efforts between the various federal and state government agencies, CALFED was created. Id. at 407. CALFED’s operation costs were shared between the state and federal government. Id. at 412. In light of the large mandate CALFED has, it requires a considerable budget. Id.

The ongoing battle over water and the environmental impact of development has resulted in legislation and state initiatives to deal with the issue. As a result of the competing goals of development and the environment there has been a regular need for bonds funding water and environmental projects, as outlined in the next section. From those prior laws, approximately $1.4 billion remain available for new resource projects Analysis by the Legislative Analyst, http://www.ss.ca.gov/elections/vig_06/general_06/pdf/proposition_84/prop84_la.pdf#search=%22Proposition%2084%20legislature%22 (accessed September 14, 2006).

B. Recent Water Bond Propositions

In 1996, Proposition 204 provided for a bond issue of $995 million dollars. Legislative Analyst's Office, Proposition Number 204 Safe, Clean, Reliable Water Supply Act. Bond Act, http://www.lao.ca.gov/ballot/1996/prop204_11_1996.html (accessed September 16, 2006). This initiative was to ensure safe drinking water, increase water supplies, clean up pollution in rivers, streams, lakes, bays, and coastal areas, protect life and property from flooding, and protect fish and wildlife. Id.

In 2000, Proposition 12, the Safe Neighborhood Parks, Clean Water, Clean Air, and Coastal Protection Bond Act, passed with 63.3% of the votes. Legislative Analyst's Office, Proposition 12, http://www.lao.ca.gov/ballot/2000/12_03_2000.html (accessed September 16, 2006). The initiative provided $2.1 billion dollars in State bonds for the restoration of parks and recreational facilities, open space, farmland and water resources. Id.

In 2000, Proposition 13, the Safe Drinking Water, Clean Water, Watershed Protection, and Flood Protection Act, provided $1.9 billion in state bonds for safe drinking water, flood protection and water quality programs. Legislative Analyst's Office, Proposition 13, http://www.lao.ca.gov/ballot/2000/13_03_2000.html (accessed September 16, 2006).

In 2002, Proposition 40, the Clean Water, Clean Air, and Safe Neighborhood Parks and Coastal Protection Act of 2002, provided $ 2.6 billion in state bonds for state park and open space. Legislative Analyst's Office, Proposition 40, http://www.lao.ca.gov/ballot/2002/40_03_2002.htm (accessed September 16, 2006). Unlike previous bond measures, Proposition 40 assisted local agencies in funding conservation projects. Id.

Also in 2002, Proposition 50, The Water Quality, Supply and Safe Drinking Water Projects, Coastal Wetlands Purchase and Protection Bond Act was passed by the voters. Legislative Analyst’s Office, Proposition 50, http://www.lao.ca.gov/ballot/2002/40_03_2002.htm (accessed September 16, 2006). The act provided $3.5 billion for river restoration, water conservation projects, purchasing, protecting and restoring coastal wetlands, and increased security for water systems. Id.

C. Pending Water Related State Legislation

Currently, there are several bills relating to water projects at various stages of the legislative process, some of which are depending on the passage of Proposition 84 for their funding.

AB 135 (Laird): Levee Repair and Flood control systems is currently in the Assembly Appropriations committee. Bill Documents: Status, http://www.leginfo.ca.gov/pub/bill/asm/ab_0101-0150/ab_135_bill_20060327_status.html (accessed, September 13, 2006). This act would provide for $1 billion from the General Fund to the Department of Water Resources for levee evaluation, repair and flood control systems.

SB 153 (Chesbro) Parks and Recreation has recently been re-referred to the assembly appropriations committee. Bill Documents: Status, http://www.leginfo.ca.gov/pub/bill/sen/sb_0151-0200/sb_153_bill_20060919_status.html (accessed September 13, 2006). This measure provides that 60% of the $400 million marked for the state park system in Proposition 84 be distributed on the basis of population. Id.

III. The Effects of Proposition 84

Proposition 84 would add Division 43 to the Public Resources Code, commencing with section 75001. The Safe Drinking Water, Water Quality and Supply, Flood Control, River and Costal Protection Bond. Initiative Statute 1 (2006). Proposition 84 provides for the issuance of $5.4 billion in bonds to be spent on water and park related projects as laid out in table 1.

General Provisions

The text of the proposed statute in the third paragraph begins with “The people of the State of California find and declare that it is necessary and in the public interest to do all of the following…” Cal. Public Resources Code § 75003 (proposed). This section makes clear the legislative intent of this provision was the public interest. The language may have some significance when future legislatures are determining what is in the public interest when assessing reasonable use of water resources. Proposition 84: § 75003.

Safe Drinking Water and Water Quality Projects

This chapter provides funds to ensure safe drinking water, protection of water quality and the environment, and the improvement of water supply reliability by:

a. Providing alternative sources of water supplies. This would include such measures as connecting adjacent water systems and stockpiling bottled water for emergencies.

b. Grants to the Department of Health Services to improve small communities’ drinking water infrastructure, with priority given to communities with chemical and nitrate contamination and financially disadvantaged communities.

c. Grants to the Department of Health services to fund projects to prevent contamination of groundwater and drinking water supplies.

d. Grants for projects that assist local public agencies in meeting the long term water needs of the state including the delivery of safe drinking water and the protection of water quality and the environment.

e. Grants for projects to prevent discharges of pollutants into the Sacramento and San Joaquin rivers.

Id . at 2-4.

Flood Control

This chapter is intended to provide the funding needed to address short term flood control needs such as levee inspection and evaluation, floodplain mapping and improved effectiveness of emergency response, and funds for critical immediate flood control needs throughout the state. It is also intended to provide a framework to support long term strategies that will require the establishment of more effective levee maintenance programs, better floodplain management and more balanced allocation of liability and responsibility between the federal, state and local governments. Id .

Statewide Water Planning and Design

Funding shall be available to the Department of Water Resources for planning and feasibility studies related to the existing and potential future needs for California’s water supply, conveyance and flood control systems. The studies shall be designed to promote integrated, multi-benefit approaches that maximize the public benefits of the overall system including protection of the public from floods, water supply reliability, water quality, and fish, wildlife and habitat protection and restoration. Id .

Protection of Rivers, Lakes and Streams

Funding shall be available for the protection and restoration of rivers, lakes and streams, their watersheds and associated land, water, and other natural resources in accordance with the following schedule:

a. Bay-Delta fishery restorations
b. Colorado River restorations
c. Conservatories throughout the state
d. Providing matching funds for local water contamination prevention measures
e. Funds for implementing a court settlement to restore the populations of Salmon in the San Joaquin river Id .

Forest and Wildlife Conservation

Funds shall be available for the protection and conservation of forests and wildlife by:

• Protecting endangered species and ecosystems
• Agricultural and other land acquisition and preservation
• Training at the University of California for the preservation of Californian wildlife

Id. at 6-8.

Protection of Beaches, Bays and Coastal Waters

Funding shall be available for the protection of beaches, bays and coastal water and watersheds, including projects to prevent contamination and degradation of coastal waters and watersheds, projects to protect and restore the natural habitat values of coastal waters and lands, and projects and expenditures to promote access to and enjoyment of the coastal resources of the state. Id. at 8

Parks and Nature Education Facilities

The sum of five hundred million dollars ($500,000,000) shall be available to provide public access to the resources of the State of California, including its rivers, lakes and streams, its beaches, bays and coastal waters, to protect those resources for future generations, and to increase public understanding and knowledge of those resources.

Id . at 8.

Sustainable Communities and Climate Change Reduction

Funding shall be available for improving the sustainability and livability of

California ’s communities through investment in natural resources. The purposes of this chapter include reducing urban communities’ contribution to global warming and increasing their adaptability to climate change while improving the quality of life in those communities. Id. at 8.

Table 1

IV. Drafting Issues

Proposition 84’s incorporation of other laws creates a potential drafting problem. State law interprets incorporation of other laws according to whether the incorporation was specific or general. Palermo v. Stockton Theatres, Inc., 32 Cal. 2d 53, 58-59 (1948). Where a statute adopts part of another statute by specific reference, the provisions are incorporated in the form they exist at the time of the incorporation. Subsequent modification does not affect new law. Id. If the reference is a general one, amendments to the pre-existing provision are made part of the incorporating statute. Id.

Proposition 84 incorporates a number of other laws including the California Environmental Quality Act, the Clean Beaches Program, the General Obligation Bond Law, the Wildlife Conservation Law of 1947, and the Internal Revenue Code. Proposition 84. Most of these laws appear generally incorporated into the Act. Id. at 13. Thus, if they are later amended, the Act will be amended to conform to the changes. However, the incorporation of the Internal Revenue Code section 501(c)(3) definition of a qualified non-profit corporation appears specific. Public Resources Code § 75005(g) (proposed). This incorporated definition may remain fixed for purposes of the Act even if the Internal Revenue Code is later amended to change the definition. As a result, a conflict could arise between the definition of a qualified non-profit corporation under the Act and under the Internal Revenue Code. The conflict is likely to be resolved by the courts using the 501(c)(3) of the proposed § 75005(g) for the purposes of the proposed statute. It may result in a non-profit qualified under the Internal Revenue Code not being qualified for Proposition 84 projects.

V. Constitutional Issues

A. Federal Constitution

There do not appear to be any conflicts between Proposition 84 and the United States Constitution.

B. California Constitution and the Single Subject Rule

There has been no challenge to Proposition 84 under the California Constitution single-subject rule, but the disparate projects proposed may be argued to be unrelated. Under the single-subject rule, an initiative that covers more than one subject may not be submitted to the voters. Cal. Const. Art. II, § 8(d) (West 2002). There must be a reasonable relatedness to a common theme or purpose for the entire initiative. Legislature v. Eu, 54 Cal. 3d 492, 512 (1991). Additionally, the initiative language must not cause the voters confusion that prevents them from expressing their intent. Manduley v. Superior Court, 27 Cal. 4th 537, 581 (2002).

The most tenuous connection is perhaps between the nature education facilities and the flood control measures. The flood control measures have a public safety purpose and are aimed at maintaining and repairing state infrastructure. The educational facilities are designed to increase the population’s appreciation of California’s ecology. However, the California Supreme court has approached the Constitutional requirement with a liberal reading. Eu, 54 Cal.3d at 512. As long as all the parts of a ballot measure are reasonably germane to one another and to a common theme or purpose, they may be voted on as a single measure. The Court has allowed for purposes as broad as “ promoting the rights of actual and potential crime victims.” Manduley, 27 Cal.4 th at 581. What are not allowed are overly broad purposes, such as “general welfare” or “government.” Id. Because of the wide variety of projects funded by Proposition 84, it may be reaching the realm of “general welfare.”

However, it is unlikely that Proposition 84 will violate the single subject rule. In § 75002 the text appears to lay out the statute’s overall purpose as protecting the state’s drinking water and water resources. All measures in the Propositopn provide some benefit to the state’s water resources, even if the benefit is to merely create an appreciation in the population of the importance of the environment through parks and education facilities.

VII. Fiscal and Policy Considerations

Proposition 84 will sell $5.4 billion worth of bonds. With an average interest rate of 5 percent, it will cost the state about $10.5 billion to pay off the bonds. Payments will be made from the state’s general funds. Legislative Analyst Office, Proposition 84, http://www.lao.ca.gov/ballot/2006/84_11_2006.htm (accessed September 15, 2006).

The Legislative Analyst also indicates that the initiative will cost several million dollars a year in lost property tax revenue, as land acquired by governments and, to a limited extent, nonprofit organizations is exempt from the taxes. Id. These acquired lands may also cost governments in operational costs, though the amount is unknown as yet. Id.

VI. Public Policy Debate

A. Overview

The main question presented by the Proposition is whether Californians should invest significant resources in cleaning up California’s beaches and rivers, funding water conservation programs, and increasing state and local park funding, with an additional $1 billion for flood control.

The measure is facing an uphill fight to be approved, in spite of widespread support among the state’s political leaders, as recent polling placed Proposition 84 support at 40% versus 45% opposed. 59% of likely voters listed the combined costs of the bond measure as the primary reason for opposition. Paul Rogers, MediaNews, Parks, Water Bond Issue Finds Itself in a Crowd, http://www.contracostatimes.com/mld/cctimes/news/15702784.htm (accessed October 7th, 2006).

B. Arguments Against

While water is constantly in demand in California, and California’s water infrastructure is showing its age, critics of Proposition 84 claim that the Proposition does not do enough to deal with water supply problems. They point to the fact that it does not provide money for new reservoirs, only for studies for potential future improvements. Critics demand that money be spent on actual construction of new supply reservoirs, because of the yearly supply shortfall. Official Title and Summary, Proposition 84, http://www.ss.ca.gov/elections/vig_06/general_06/pdf/proposition_84/entire_prop84.pdf at 5.

Because of Proposition 1E, Disaster Preparedness and Flood PreventionBond, opponents argue that Proposition 84’s flood prevention measures are redundant and inadequate. Id. They argue that Proposition 1E’s money should be spent before additional funds are authorized for the same projects, and that it takes away money that could be better spent on other methods of flood control. Id.

The second major criticism, and the one that seems to have the most traction with voters, is that California can not afford to take on more debt. Id. Because debt repayment takes priority over all other spending, it is feared that taking on more bonds will continue to hamstring the state legislature when it attempts to balance the yearly budget. Id.

Additionally, because several parts of the bill are exempt from the California Administrative Procedures Act, opponents fear that there will not be enough accountability for where the money is spent. Opponents believe this lack of accountability, combined with the size of the bond, will result in higher taxes. Id.

Opponents bolster their arguments by pointing to recent audits by the State Department of Finances on how the state spent previous water bond funds. The Department of Finances audit was undertaken to ensure that the funds were being spent on what the law mandated. Some of the problems found included administrative errors in the Department of Water Resources that directed money meant for loan repayments back into the general fund, reducing the money available to fund projects. Additionally, some conservation groups awarded contracts spent bond money on unauthorized or questionable projects, and failed to fully document expenses. Mike Taugher, Contra Costa Times, http://www.contracostatimes.com/mld/cctimes/news/local/states/california/15721726.htm(accessed October 11, 2006).

C. Arguments For

Proponents counter that the infrastructure and environmental improvements are a needed investment, due to California’s high rate of growth. Id. It is seen as a smart preemptive strike to deal with growth, permitting California to grow by planning adequate water infrastructure, and increasing the quality of the water currently available. Official Title and Summary, Proposition 84, http://www.ss.ca.gov/elections/vig_06/general_06/pdf/proposition_84/entire_prop84.pdf at 5. Proponents also see it as an efficient investment. Tourism is an important industry to California, and keeping its parks and beaches clean for visitors will result in tourists’ continued spending. Id. It also ensures that the state keeps up its end of the bargain of the CALFED agreement, so that federal matching funds will continue to be provided. Id.

In addition, the Department of Water Resources has addressed the concerns raised in the recent audits. The funds deposited in the general fund are being returned, and additional personnel have been hired to address the administrative errors that have occurred. The state has also required groups that have misused resources to refund them. Administers argue that mistakes are made, and the fact that the auditors caught them shows that the accountability measures in place are adequate to prevent wasted resources. Mike Taugher, Contra Costa Times, http://www.contracostatimes.com/mld/cctimes/news/local/states/california/15721726.htm(accessed Oct. 11, 2006). They also argue that the there is accountability built into the law, allowing for yearly independent audits and a citizen’s oversight committee to ensure the money is not wasted. Id.

VIII. Conclusion

Proposition 84 provides for $5.4 billion worth of bonds for water projects, flood control, and park improvement around the state. Proponents argue that it is a needed investment in the state’s infrastructure and key to protecting the environment. Opponents argue that it is too expensive and does not have the right priorities for where the money is spent. In spite of the lack of organized opposition, voters’ skepticism of the state to spend bond money properly may lead Proposition 84 to defeat this November.