Assembly Bill (AB) 850 Rate Reduction Bond Program
Designed to issue rate reduction bonds to finance publicly owned utility projects.
If you have any questions about the Rate Reduction Bond program, please contact Andrea Gonzalez or Deanna Hamelin at (916) 654-5610.
AB 850 Summary
The California Pollution Control Financing Authority (CPCFA) is responsible to review the issuance of certain rate reduction bonds for water utility projects, approved by joint powers authorities. Assembly Bill 850 (Nazarian, 2013) authorizes joint power authorities to issue rate reduction bonds to finance publicly owned water utility projects until December 31, 2020. The bonds are to be secured by utility project property and repaid through a separate utility project charge imposed on the utility customers’ bills.
While the bonds are issued by the local joint power authorities, AB 850 includes an additional state review process by CPCFA, including:
- The review of each issue of rate reduction bonds and making a determination whether the issue is qualified for issuance under the provisions of the statute (Government Code, section 6588.7(b)(2)(A)-(B)).
- A determination that each project is a qualified utility project, and that its financing is paid from the utility project property and the utility project charge.
- A determination that the rates of the publicly owned utility plus the utility project charge are lower than the rates if the project was financed with revenue bonds.