California Proposition 55, Drinking Water Bond Measure (1986)
| California Proposition 55 | |
|---|---|
 | |
| Election date November 4, 1986 | |
| Topic Bond issues and Water | |
Status Approved | |
| Type Bond issue | Origin State Legislature |
California Proposition 55 was on the ballot as a bond issue in California on November 4, 1986. It was approved.
A "yes" vote supported authorizing the state to issue $100 million in bonds to make loans and grants for local drinking water systems. |
A "no" vote opposed authorizing the state to issue $100 million in bonds to make loans and grants for local drinking water systems. |
Election results
|
California Proposition 55 |
||||
|---|---|---|---|---|
| Result | Votes | Percentage | ||
|
|
5,405,385 | 78.66% | ||
| No | 1,466,214 | 21.34% | ||
Overview
Loans
- The first priority for loans made with the funds from Proposition 55 was to "water suppliers whose facilities pose the most critical public health problems."
- The maximum loan to any water supplier was $5 million, although the legislature could raise this on an ad hoc basis.
- The interest rate on these loans was one-half of the interest rate that the state pays on the bonds.
Grants
All money available because of Proposition 55 could go to loans, but some could also go to grants in the following amounts:
- Up to $25 million of Proposition 55 money could be used for grants to public agencies that supply water in order to make up the difference between the cost of a project and the loan amount the agencies can repay.
- The maximum grant to any supplier was $400,000.
- Up to $3 million for short-term loans or grants to water suppliers to study and identify ways of improving their water systems.
- Up to $1 million could be used for grants to public agencies.
- Up to $5 million for administrative costs of the Department of Water Resources and Department of Health Services.
- About $3 million of those costs had to be repaid from fees charged to the loan recipients.
- Up to $1.5 million for legal expenses of the Attorney General.
Reduced rates
Some Proposition 55 money was available to reduce the interest rate on existing and new loans made from the 1984 Safe Drinking Water Bond Fund.
Text of measure
Ballot title
The ballot title for Proposition 55 was as follows:
| “ | California Safe Drinking Water Bond Law Of 1986 | ” |
Ballot summary
The ballot summary for this measure was:
| “ | This act provides for a bond issue of one hundred million dollars ($100,000,000) to provide funds for improvement of domestic water systems to meet minimum drinking water standards. | ” |
Full Text
The full text of this measure is available here.
Fiscal impact
The fiscal estimate provided by the California Legislative Analyst's Office said:[1]
| “ |
Paying Off the Bonds. For these types of bonds the state typically would make principal and interest payments over a period of up to 30 years from the state's General Fund. The average payment would be about $8.1 million each year if the bonds were sold at an interest rate of 7.5 percent. Net Costs. If all of the loans are repaid on time, the net state cost could average up to $5.5 million each year for 30 years, for a total of $165 million. This net cost would consist of (1) up to $28.5 million for grants, administrative, and legal costs, and (2) one-half of the interest cost on the new bonds and the 1984 bonds because loans would be provided at a reduced interest rate. Over the 30 years, the total interest subsidy would be $94.5 million for the new bonds, and $42 million for the 1984 bonds. Borrowing Costs for Other Bonds. By increasing the amount which the state borrows, this measure may cause the state and local governments to pay more under other bond programs. These costs cannot be estimated. State Revenues. Purchasers of these bonds are not required to pay state income tax on the interest they earn. Therefore, if California taxpayers buy these bonds instead of making other taxable investments, the state would collect less taxes. This loss cannot be estimated.[2] |
” |
Path to the ballot
A simple majority vote was needed in each chamber of the California State Legislature to refer the measure to the ballot for voter consideration.
See also
External links
Footnotes
- ↑ University of California, "Voter Guide," accessed August 26, 2021
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
 |
State of California Sacramento (capital) |
|---|---|
| Elections |
What's on my ballot? | Elections in 2025 | How to vote | How to run for office | Ballot measures |
| Government |
Who represents me? | U.S. President | U.S. Congress | Federal courts | State executives | State legislature | State and local courts | Counties | Cities | School districts | Public policy |
