BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1 X7
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           Revised - As Amended RN0925376 
           
          SENATE THIRD READING
          SB 1 X7 (Simitian and Steinberg)
          As Amended  November 3, 2009
          Majority vote

           SENATE VOTE  :   29-5
            
           SUMMARY  :  Reforms state policies, programs and governance for  
          the Sacramento-San Joaquin Delta (Delta), and establishes  
          guidelines for developing a new Delta Plan.

          1)Expands the "basic goals" for the Delta and the DPC, to  
            include achieving the two coequal goals of providing a more  
            reliable water supply for California and protecting,  
            restoring, and enhancing the Delta ecosystem.  The coequal  
            goals shall be achieved in a manner that protects and enhances  
            the unique cultural, recreational, natural resources, and  
            agricultural values of the Delta as an evolving place.

          2)Adds Knightsen and Collinsville as "unincorporated towns" in  
            the Delta.

          3)Reconstitutes the Delta Protection Commission (DPC):
           
              a)   Reduces membership of the DPC from 23 to 15, including:

               i)     Five members from the five Delta county Boards of  
                 Supervisors;

               ii)    Three elected city council members, from south, west  
                 and north Delta;

               iii)   Three members representing reclamation (i.e., levee)  
                 districts in specified regions;

               iv)    Secretary of Food and Agriculture, or sole designee;

               v)     Executive Officer of State Lands Commission, or sole  
                 designee;

               vi)    Secretary of Natural Resources Agency, or sole  
                 designee; and,









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               vii)   Secretary of Business, Transportation and Housing,  
                 or sole designee.

             b)   Allows member appointments at the pleasure of the  
               appointing entity;

             c)   Designates DPC chair as a voting member of the Delta  
               Stewardship Council (Council); and,

             d)   Changes nature of DPC advisory committees, to have one  
               with broader representation. 

          4)Requires DPC to create a regional economic sustainability  
            plan, including creation of a Delta Investment Fund in the  
            State Treasury.

          5)Authorizes DPC to make recommendations to Council, including  
            specified issues, and requires Council to consider DPC  
            recommendations and determine, in Council discretion, if  
            recommendations are feasible and consistent with the  
            objectives of the Delta Plan.

          6)Requires the DPC, by July 2010, to prepare and submit to the  
            Legislature recommendations regarding the potential expansion  
            of or change to the Delta's primary zone.

          7)Requires DPC to report annually to the Governor and the  
            Legislature on specified issues.

          8)Creates a new Sacramento-San Joaquin Delta Conservancy  
            (Conservancy):
           
              a)   Authorizes Conservancy, as a primary state agency for  
               ecosystem restoration, to support efforts that advance  
               environmental protection and the economic well-being of  
               Delta residents, including specified activities;

             b)   Creates Conservancy board with 11 voting members of the  
               board, including the Secretary of the Natural Resources  
               Agency; Director of Finance; one member (or designee) of  
               each of board of supervisors for Contra Costa, Sacramento,  
               San Joaquin, Solano, and Yolo Counties; two public members,  
               appointed by the Governor; one public member appointed by  
               the Senate Committee on Rules; and, one public member  
               appointed by the Speaker;








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             c)   Designates nonvoting members of the board and nonvoting  
               liaison advisers who would serve in an advisory, nonvoting  
               capacity;

             d)   Establishes terms of board members, from "at the  
               pleasure" (for Governor and boards of supervisors) to four  
               years (for legislative appointments) with 2-term limit;

             e)   Requires voting members of the board to elect a  
               chairperson and vice chairperson, and other officers as  
               necessary, from among the voting members, but chairperson  
               must be from among county supervisor members; and,

             f)   Provides the Conservancy administrative powers,  
               including authority to hire staff, adopt rules and  
               procedures for conduct of the Conservancy's business,  
               establish advisory committees, and enter into contracts.

          9)Establishes and limits the Conservancy's powers and duties,  
            including:

             a)   Authorizes Conservancy, as a primary state agency for  
               ecosystem restoration, to support efforts that advance  
               environmental protection and the economic well-being of  
               Delta residents, including specified activities;

             b)   Limits the jurisdiction and activities of the  
               Conservancy to the Delta and Suisun Marsh except if the  
               board makes certain findings; 

             c)   Establishes the Sacramento-San Joaquin Delta Conservancy  
               Fund in the State Treasury, which may provide funding for  
               ecosystem restoration projects consistent with the  
               Conservancy's strategic plan or for "regional  
               sustainability" consistent with the DPC's "Regional  
               Sustainability and Land Use Plan;"

             d)   Authorizes Conservancy, subject to specified conditions,  
               to acquire, manage and transfer interests in property and  
               water rights, with a preference for conservation easements;

             e)   Authorizes the Conservancy to accept funding from a  
               broad range of sources, including creation and management  
               of endowments;








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             f)   Requires the Conservancy to develop a strategic plan  
               consistent with the Delta Plan, DPC's Regional  
               Sustainability and Land Use Plan, the Central Valley Flood  
               Protection Plan, the Suisun Marsh Preservation Act, and the  
               Habitat Management, Preservation and Restoration Plan for  
               the Suisun Marsh;

             g)   Authorizes the Conservancy to collaborate with other  
               organizations and impose certain conditions on any grants  
               it makes; and,

             h)   Prohibits the Conservancy from regulating land-use,  
               exercising power over water rights held by others, or  
               exercising the power of eminent domain.

          10)Repeals the California Bay-Delta Authority Act.

          11)Establishes new legal framework for Delta management, which:

             a)   Sets the coequal goals of "providing a more reliable  
               water supply for California and protecting, restoring, and  
               enhancing the Delta ecosystem" as the foundation for state  
               decisions as to Delta management;

             b)   Sets certain objectives as inherent in the coequal  
               goals;

             c)   Sets state policy of reducing reliance on the Delta to  
               meet future water supply needs through a statewide strategy  
               of investing in improved regional supplies and  
               conservation;

             d)   Requires the Delta Stewardship Council (Council)  
               land-use decisions to be guided by certain findings,  
               policies, and goals;

             e)   States certain "fundamental goals for managing land use  
               in the Delta;"

             f)   Describes the longstanding constitutional principle of  
               reasonable use and the public trust doctrine as the  
               foundation of state water management policy;

             g)   Preserves procedural and legal protections under water  








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               rights law, as specified, and maintains scope of State  
               Water Resources Control Board (SWRCB)/court jurisdiction;

             h)   Preserves specified statutes and legal doctrines as  
               unaffected by this new division in the Water Code,  
               including area-of-origin protections, water rights and  
               public trust doctrine;

             i)   Establishes the Council as the successor to the  
               California Bay-Delta Authority, and provides for the  
               Council to assume its responsibilities;

             j)   Defines certain terms, including but not limited to the  
               following key terms:

               i)     "Coequal goals" means "the two goals of providing a  
                 more reliable water supply for California and protecting,  
                 restoring, and enhancing the Delta ecosystem," but those  
                 goals are achieved in a manner to protect the Delta as an  
                 evolving place;

               ii)    "Council" means the Delta Stewardship Council, as  
                 established in Part 3;

               iii)   "Covered action" means Delta-related plan or program  
                 that meets certain conditions, including significant  
                 impact on achievement of the coequal goals.  Specifies  
                 exemptions and clarifies that the definition will not  
                 abrogate vested rights; and,

               iv)    "Restoration" means achieving a close approximation  
                 of the Delta's ecosystem's natural potential, given past  
                 physical changes and future impact of climate change.

          12)Requires the Council, the Department of Water Resource (DWR)  
            or the Department of Fish & Game (DFG) to take certain "early  
            actions," including:

             a)   Appointment of Delta Independent Science Board;

             b)   Development of strategy to engage federal government in  
               the Delta;

             c)   Development of DFG recommendations for in stream flow  
               needs in the Delta; and,








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             d)   Certain Delta near-term ecosystem restoration projects,  
               including the "Two-Gates Fish Protection Demonstration  
               Project." 

          13)Requires the State Water Resources Control Board (SWRCB) to  
            develop new "flow criteria," to facilitate planning in Delta  
            Plan and Bay Delta Conservation Plan, for the Delta ecosystem  
            necessary to protect public trust resources;

             a)   Specifies process and substance for development of flow  
               criteria;

             b)   Requires SWRCB approval of change in State Water Project  
               (SWP) and Central Valley Project (CVP) point of diversion,  
               as specified, to include "appropriate" flow criteria;

             c)   Requires SWRCB to enter agreement with SWP/CVP  
               contractors to pay costs;

             d)   Preserves SWRCB authority to review water rights and  
               impose terms and conditions on water right permits; and,

             e)   Requires SWRCB to submit flow criteria to Council, for  
               information purposes.

          14)Requires SWRCB to submit prioritized schedule and costs for  
            instream flow studies for the Delta and other high priority  
            streams, with completion by certain dates.

          15)Prohibits DWR from commencing construction of any new Delta  
            diversion, conveyance or other facility related a change in  
            the point of diversion, until:

             a)   SWRCB issues an order approving a change in the point of  
               diversion; and,

             b)   SWP/CVP contractors execute a contract to pay the costs  
               for environmental review, planning, design, construction,  
               and mitigation for the construction, operation, and  
               maintenance of any new Delta water conveyance facility,  
               including mitigation of property tax or assessments levied  
               by local agencies for land used in such construction.

          16)Creates the Council as an independent state agency;








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             a)   Establishes a seven-member Council, with four  
               appointments by the Governor, two by the Legislature, and  
               the chair of the Delta Protection Commission;

             b)   Specifies both initial and subsequent staggered terms  
               for Council members;

             c)   Provides for Council salaries, hiring of Council staff  
               and headquarters;

             d)   Requires members to "possess diverse expertise and  
               reflect a statewide perspective;" and,

             e)   Specifies Council administrative authorities (e.g.,  
               contracting) and hearing authority.

          17)Authorizes Council to review "covered [in-Delta] actions" by  
            state and local agencies for consistency with Delta Plan.

             a)   Requires state and local agencies that implement  
               "covered [in-Delta] actions" to submit certification of  
               project consistency with Delta Plan to Council;

             b)   Allows any person to appeal such certifications, within  
               30 days;

             c)   Requires Council to review certification and determine  
               consistency;

             d)   Requires covered actions deemed inconsistent to be  
               reviewed by proposing agency, which makes changes and  
               resubmits a certification if it decides to proceed; and,

             e)   Specifies process for Council review of agency  
               certifications.

          18)Creates the "Delta Watermaster" as enforcement officer for  
            SWRCB in the Delta.

             a)   Requires SWRCB to delegate certain enforcement - not  
               adjudicatory - authorities; and,

             b)   Limits Delta Watermaster authority to in-Delta  
               diversions and SWRCB orders and terms/conditions on water  








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               right permits that apply to conditions in the Delta.

          19)Creates the Delta Independent Science Board (Science Board)  
            and Delta Science Program.

          20)Requires Council to develop, adopt, and commence  
            implementation of the "Delta Plan" by January 1, 2012, with a  
            report to the Legislature by March 31, 2012;

             a)   Requires Council to consider strategies and actions set  
               forth in the Delta Vision Blue Ribbon Task Force Strategic  
               Plan (Strategic Plan);

             b)   Allows Council to identify actions that state or local  
               agencies may take to implement the sub-goals or strategies;

             c)   Requires Council to submit the Delta Plan to appropriate  
               federal authorities for federal approval, if it complies  
               with Coastal Zone Management Act;

             d)   Requires consultation and cooperation between the  
               Council and federal, state and local agencies in developing  
               the Delta Plan;

             e)   Requires Council to review the Delta Plan every five  
               years, allowing the Council to request state agency  
               recommendations for revisions;

             f)   Requires Council to develop the Delta Plan consistent  
               with federal statutes, including the Coastal Zone  
               Management Act, Clean Water Act and the Reclamation Act;  
               and,

             g)   Requires "performance measurements" to allow Council to  
               track Delta Plan progress.

          21)Requires the Delta Protection Commission (DPC) to develop  
            proposal to protect, enhance, and sustain the unique cultural,  
            historical, recreational, agricultural, and economic values of  
            the Delta as an evolving place, for consideration by the  
            Council as part of Delta Plan, including proposals for:

             a)   Federal/state designation of the Delta as a place of  
               special significance;









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             b)   Regional economic plan to increase investment in  
               agriculture, recreation, tourism and other resilient land  
               uses in the Delta, including administration of Delta  
               Investment Fund;

             c)   Expansion of state recreation areas in the Delta; and,

             d)   Market incentives and infrastructure to support Delta  
               agriculture.

          22)Requires the Delta Plan to further the coequal goals of Delta  
            ecosystem restoration and a reliable water supply;

             a)   Limits geographic scope of ecosystem restoration  
               projects to the Delta (defined separately as legal Delta  
               and Suisun Marsh), except for ecosystem projects outside  
               the Delta that contribute to achievement of coequal goals;  
               and,

             b)   Requires Delta Plan to promote specified characteristics  
               and include specified strategies for a healthy Delta  
               ecosystem.

          23)Requires the Delta Plan to promote a more reliable water  
            supply to:

             a)   Assist in meeting the needs of reasonable and beneficial  
               uses of water;

             b)   Sustain the economic vitality of the state; and, 

             c)   Improve water quality to protect human health and the  
               environment.

          24) Requires the Delta Plan to promote statewide water  
            conservation, water use efficiency, and sustainable use of  
            water, as well as improvements to water conveyance/storage and  
            operation of both to achieve the coequal goals.

          25)Requires the Delta Plan to attempt to reduce risks to people,  
            property, and state interests in the Delta by promoting  
            effective emergency preparedness, appropriate land uses, and  
            strategic levee investments;

             a)   Allows the Delta Plan to include actions outside the  








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               Delta that reduce flood risks, and local plans of flood  
               protection;

             b)   Requires Council to recommend priorities for state  
               investments in levee operation, maintenance, and  
               improvements in the Delta;

             c)   Allows Council, in consultation with the California  
               Department of Transportation, to address climate change  
               effects on state highways in the Delta in the Delta Plan;  
               and,

             d)   Allows Council, in consultation with the California  
               Energy Commission, to address the needs of Delta energy  
               development, storage and distribution in the Delta Plan.

          26)Requires the Delta Plan to comply with the following  
            requirements:

             a)   Be based on best available scientific information and  
               advice from the Science Board;

             b)   Includes quantified targets for achieving the objectives  
               of the Delta Plan;

             c)   Utilizes monitoring and analysis to determine progress  
               toward targets;

             d)   Describes methods to measure progress; and, 

             e)   Includes adaptive management strategy for ecosystem  
               restoration and water management.

          27)Requires DWR to prepare proposal to coordinate flood and  
            water supply operations of the State Water Project and Central  
            Valley Project, for Council consideration.

          28)Requires Council to consider including the Bay Delta  
            Conservation Plan (BDCP) under certain circumstances,  
            including:

             a)   Conditions BDCP incorporation into Delta Plan and state  
               funding for BDCP public benefits on compliance with the  
               Natural Community Conservation Planning (NCCP) Act and  
               California Environmental Quality Act (CEQA);








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             b)   Requires certain analyses as part of CEQA compliance:

               i)     Reasonable range of flow criteria, rates of  
                 diversion and other operational criteria required to  
                 satisfy NCCP Act;

               ii)    Reasonable range of Delta conveyance alternatives,  
                 and capacity/design options for a lined canal, an unlined  
                 canal, and pipelines;

               iii)   Potential effects of climate change on conveyance  
                 and habitat restoration activities;

               iv)    Potential effects on migratory fish and aquatic  
                 resources;

               v)     Potential effects on Sacramento River/San Joaquin  
                 River flood management;

               vi)    Resilience/recovery of conveyance alternatives in  
                 event of natural disaster; and,

               vii)   Potential effects of each conveyance alternative on  
                 Delta water quality;

             c)   Requires DWR to consult with Council and the Science  
               Board during development of BDCP;

             d)   Requires Council to have at least one public hearing and  
               incorporate BDCP into Delta Plan if DFG approves BDCP as  
               NCCP;

             e)   Requires annual report to Council on BDCP  
               implementation; 

             f)   Allows Council to make recommendations to BDCP  
               implementing agencies;

             g)   Requires BDCP to include a transparent, real-time  
               operational decision-making process in which fishery  
               agencies ensure applicable biological performance measures  
               are achieve in a timely manner; and,

             h)   Specifies that BDCP chapter does not amend or create any  








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               additional legal obligation or cause of action under NCCP  
               Act or CEQA.

          29)Allows Council to incorporate other completed Delta-related  
            plans into the Delta Plan.

          30)Makes legislative findings regarding the Delta and California  
            water.

          31)Conforms certain laws to provide for creation of the Council.

          32)Appropriates $28 million for the "Two-Gates Fish Protection  
            Demonstration Program."

          33)Makes bill contingent on enactment of SB 6 X7 (Steinberg) and  
            SB 7 X7 (Steinberg)

           EXISTING LAW  establishes the CALFED Bay-Delta Program and the  
          California Bay-Delta Authority to implement programs and  
          projects to improve conditions in the Delta.

           FISCAL EFFECT  :  Unknown

           COMMENTS  :  For several years, the Delta has suffered a crisis -  
          ecosystem, water supply, levee stability, water quality, policy,  
          program, and litigation.  In June 2004, a privately owned levee  
          failed and the state spent nearly $100 million to fix it and  
          save an island whose property value was far less.  In August  
          2005, the Department of Fish & Game (DFG) reported a trend  
          showing severe decline in the Delta fishery.  In 2006, the  
          Legislature reorganized Delta programs and funding under the  
          Resources Agency Secretary.  In 2007, a federal judge, acting  
          under the federal Endangered Species Act, declared illegal  
          certain federal biological opinions about near-extinct fish and  
          restricted water exports from the Delta, to the San Francisco  
          Bay Area, the San Joaquin Valley and Southern California.  The  
          Governor shortly thereafter called the Legislature into an  
          extraordinary session on water.  

           Delta Vision  :  Through this enduring Delta crisis, the  
          Legislature and the Governor initiated, in 2006, a process to  
          develop a new long-term vision for the Delta.  SB 1574 (Kuehl)  
          of 2006 requires a cabinet committee to present recommendations  
                                      for a Delta vision.  The Governor created a Delta Vision  
          Blue-Ribbon Task Force to advise the Cabinet Committee.  The  








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          Task Force produced an October 2008 Strategic Plan, which the  
          Cabinet Committee largely adopted and submitted the  
          recommendations to the Legislature on January 3, 2009.  This  
          year, the Legislature held numerous hearings on Delta Vision and  
          a set of five bills.  In August, policy committees in both  
          houses held hearings on the topics in these bills, and  
          considered "pre-print" versions.  A Conference Committee on  
          these bills heard several issues arising out of these bills and  
          substantially amended the pre-prints.

           Delta Protection Commission (DPC)  :  The DPC Delta Conservancy  
          parts of this bill originated in a series of this year's bills  
          by Senator Lois Wolk, who withdrew as an author of SB 458 this  
          summer.  Senator Wolk has authored several bills in recent years  
          to reform DPC, giving DPC additional authority and balancing  
          state and local representation on the Commission.  The most  
          significant recent change required, instead of allowed, local  
          agencies to change a land-use decision to conform to a DPC  
          appellate decision.  DPC exercised this new authority in its  
          2007-08 review of the so-called "Sugar Mill" decision for a  
          property in Clarksburg.

          This bill reshapes DPC, to make it a stronger and clearer voice  
          for the interests of those who live and work in the Delta.  More  
          than two-thirds of the membership comes from the Delta.  The DPC  
          chair, representing a county board of supervisors, sits on the  
          Delta Stewardship Council, which adopts DPC recommendations  
          under certain circumstances.  It has responsibility for  
          developing a Delta economic sustainability plan and the Delta  
          Investment Fund.  DPC also will study and recommend whether to  
          change the boundaries of the Primary Zone.  It retains its  
          existing authority to consider appeals of Primary Zone land-use  
          decisions.  In the context of other new Delta governance, such  
          as the Delta Stewardship Council, DPC will now contribute the  
          local Delta voice to the broader State deliberations on Delta  
          issues.

           Delta Conservancy  :  In the last decade, several bills have been  
          introduced to create a Delta conservancy.  This conservancy  
          proposal was developed in close cooperation with the in-Delta  
          stakeholders, particularly the five Delta Counties.  The board's  
          makeup reflects the Delta Counties' request, that each board of  
          supervisors have one representative, of the 11 members, just  
          under a majority.  This conservancy has the dual role of  
          ecosystem restoration and economic development, which will  








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          require a delicate balance in expending its resources and  
          reflects in-Delta interests in ensuring that the Delta economy  
          will be sustainable as the Delta changes.

          This bill creates the Delta Conservancy as a "state agency to  
          work in collaboration and cooperation with local governments and  
          interested parties."  The Legislature created most state  
          conservancies with the primary purpose of conserving, restoring  
          or enhancing natural resources. Delta Vision recommends creation  
          of a conservancy "for implementing and coordinating Delta  
          ecosystem enhancement and related revitalization projects."   
          This bill makes the conservancy "a primary state agency" for  
          ecosystem restoration, but does not set ecosystem restoration as  
          the conservancy's primary mission. 

           Legal Framework for the Delta  :  Since statehood, California has  
          asked much of the Delta.  Conflicting demands have led to crisis  
          and conflict - between and among agencies, stakeholders and  
          natural resources.  The Delta Vision process spent more than 18  
          months, investigating the Delta, engaging agencies and  
          stakeholders, and thinking carefully about the Delta's  
          challenges and prospects for change.  The Task Force's first  
          recommendation was to change the fundamental legal framework for  
          the state to make decisions as to its activities in the Delta -  
          encapsulated in two "coequal goals" of "restoring the Delta  
          ecosystem and creating a more reliable water supply for  
          California."  This bill sets a new legal and governance  
          framework for the Delta's future, explicitly stating for the  
          first time how the state should approach resolving the inherent  
          conflicts in managing Delta resources.  This framework includes  
          legislative findings, policies and definitions, which provides  
          the foundation for new governance in the Delta.  This framework,  
          however, does not counteract long-standing legal principles,  
          such as the public trust and reasonable use, because those and  
          other legal protections are preserved in the framework's  
          "savings clauses" (as discussed below).

           Scope of "Delta"  :  This bill defines the "Delta" to include both  
          the legally defined Delta as well as the Suisun Marsh.  While  
          both currently have separate legal protections in the Public  
          Resources Code, they, in fact, operate as a single system,  
          particularly for ecosystem purposes.  The bill preserves Suisun  
          Marsh's statutory protection, but brings public agency  
          activities under the auspices of the Delta Council and the Delta  
          Plan, in order to ensure that the two areas act as the natural  








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          estuary system they comprise.  While conflicts between competing  
          purposes may arise, this bill establishes a framework for  
          resolving those conflicts in state policy.

          Given this broader definition of the Delta, SB 1 X7 nevertheless  
          limits the scope of most of its program and the Delta Plan to  
          this Delta (including Suisun Marsh).  The bill narrows the focus  
          of the ecosystem restoration to the Delta, allowing ecosystem  
          projects outside the Delta only if the Council finds the project  
          contributes to the achievement of the coequal goals.  The Delta  
          Conservancy is similarly limited in its focus.  Some criticized  
          the CALFED Bay-Delta Program for the breadth of both its  
          "problem area" (the Central Valley) and its even broader  
          "solution area" (including Southern California and San Francisco  
          Bay Area that rely on exports from the Delta Watershed).  That  
          criticism suggested that the breadth of the CALFED program led  
          to CALFED losing its focus on fixing the Delta.  This bill will  
          restore the spotlight to the legal Delta and Suisun Marsh, as an  
          estuary system.

           Protection for Existing Law  :  When the August pre-print versions  
          of the Delta bills came out, some questioned whether the Delta  
          bills would change existing legal protections for water  
          rights/quality and the environment.  This bill includes several  
          "savings" sections that protect certain statutes, water rights  
          and other legal protections from any implied changes by this  
          bill.  These sections have been expanded to ensure the continued  
          effectiveness of various water law principles that protect other  
          water right holders, particularly upstream in the Delta  
          watershed.  Those principles preserve procedural and substantive  
          legal protections that include, but are not limited to: "area of  
          origin" protections, the "no injury" rule for all "legal users  
          of water," and the domestic-use preference.  These sections also  
          maintain SWRCB jurisdiction and preserve regulatory authority  
          generally, in order to clarify that the new Delta Stewardship  
          Council is NOT a super-regulatory agency that trumps other  
          regulatory agencies, such as SWRCB and DFG.  These sections were  
          written, and should be interpreted, to broadly protect legal  
          rights of all.

           Early Actions  :  This bill identifies a series of actions that  
          existing and new agencies need to take as soon as possible -  
          before the Council completes its new Delta Plan.  Some actions  
          are administrative.  Others are substantive projects for the  
          Delta ecosystem and/or water supply reliability.  The early  








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          actions part communicates the urgency of responding to the Delta  
          crisis, without waiting for the completion of the new Delta  
          plan.

           Flow Criteria  :  One key "early action" is the SWRCB developing  
          "flow criteria," which is a new legal concept.  The bill  
          requires SWRCB to adopt such flow criteria within nine months,  
          pursuant to a specified "informational proceeding" under  
          existing SWRCB regulations.  Those regulations provide an  
          opportunity for all interested persons to submit comments and  
          evidence, as part of the proceeding.  SWRCB staff indicated  
          that, in order to accomplish the 9-month deadline, they would  
          use this established process.

          Such "flow criteria" are neither federal water quality  
          "criteria," nor state "flow objectives."  In 1994, the United  
          States Supreme Court held that the federal Clean Water Act may  
          not provide explicitly for setting flow standards, but states  
          may do so consistent with certain provisions in that federal  
          statute.  PUD No. 1 of Jefferson County v. Washington Dep't of  
          Ecology, 511 U.S. 700 (1994).  This bill's "flow criteria"  
          reflect a landmark concept of the state exercising its public  
          trust authority to ask - FIRST - what the Delta needs, before  
          completing plans for fundamental change to the nature of the  
          Delta, as envisioned by the Bay Delta Conservation Plan.

          Water Code Section 85086(c)(1) specifies that the flow criteria  
          for the Delta ecosystem developed under that subdivision shall  
          not be considered "predecisional" in a subsequent SWRCB  
          proceeding.  In this context, the word "predecisional" means  
          that the flow criteria do not predetermine how any issue will be  
          decided in any later proceeding before SWRCB.  Nor will the flow  
          criteria, at the conclusion of the nine-month process, establish  
          any obligations on other parties outside the Bay Delta  
          Conservation Plan process as described in paragraph (c)(2) and  
          below.  

          Transforming these criteria into "flow objectives," which is the  
          term used in the state Porter-Cologne Water Quality Control Act,  
          would require further proceedings, pursuant to existing law.  In  
          a landmark decision on Delta water quality issues, United States  
          v. State Water Resources Control Board, 182 Cal.App.3d 82  
          (1986), the state court established a two-step process required  
          to set water quality objectives and then - subsequently and  
          separately - allocate responsibility for those objectives among  








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          water right holders.  These flow criteria will not constitute  
          even the first step in that process.  While state and local  
          agencies may use the flow criteria for other purposes in the  
          Delta and the SWRCB may use the "flow criteria" as the  
          foundation for developing new water quality "objectives" in a  
          new Delta Water Quality Control Plan, SWRCB will need a complete  
          record, as required by existing law, from a subsequent  
          proceeding to adopt them as "flow objectives."

          The flow criteria do not require a particular outcome in such  
          further proceedings.  Their development does not have the effect  
          of a regulatory standard or precedential decision, and they do  
          not affect the legal burden of proof in the later SWRCB  
          proceeding.  Also, because the development of the flow criteria  
          does not amount to a determination as to how any issues will be  
          decided in a later proceeding, a board or staff member is not be  
          required to avoid participation in the development of the  
          criteria in order to avoid the appearance of prejudging issues  
          that may be presented in the later proceeding.
           
          The flow criteria adopted under Water Code Section 85086(c)(2)  
          may differ from the flow criteria developed under Water Code  
          Section 85086(c)(1), and their legal effect is very different.   
          Paragraph (c)(2) specifies that certain water right change  
          orders, involving specified changes in the points of diversion  
          for the Central Valley Project or the State Water Project, must  
          include "appropriate" Delta flow criteria.  While the analysis  
          used in developing flow criteria under paragraph (c)(1) will be  
          considered in setting flow criteria under paragraph (c)(2),  
          neither the analysis nor the criteria themselves predetermine  
          the outcome of the later proceeding to determine what criteria  
          are "appropriate" for inclusion in the water right change order.  
           In addition, while the flow criteria developed under paragraph  
          (c)(1) do not have regulatory effect - they serve instead as  
          recommendations for consideration in the Delta Plan and the Bay  
          Delta Conservation Plan - the flow criteria set under paragraph  
          (c)(2) are included in the water right change order, and have  
          the effect of terms and conditions of that order.

          This requirement for flow criteria should also be read in the  
          context of the savings clauses in Water Code Sections 85031-32,  
          which ensure protection for all water rights holders as the Bay  
          Delta Conservation Plan and the Delta Plan develop.  Several  
          upstream parties have raised concerns about these flow criteria,  
          suggesting that they will be held responsible for complying with  








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          these flow criteria.  The combination of the focus on use of  
          flow criteria early in Delta planning efforts, specified process  
          for developing flow criteria, and the savings clauses ensure  
          consistent legal protection for upstream water users without  
          rewriting water law to focus protections on specific concerns.
           
           Council Membership  :  The foundation of this bill's change in  
          Delta governance is the new Delta Stewardship Council, which  
          this bill creates with seven members.  Council members would be  
          required to possess diverse expertise and reflect a statewide  
          perspective.  However, this bill would also designate the chair  
          of the Delta Protection Commission as a voting member of the  
          Council ex officio.  The bill now specifies that the Governor's  
          appointments have either four or six-year terms, with subsequent  
          four-year terms, to allow some staggering of terms over the  
          long-term.  The legislative appointments have four-year initial  
          and subsequent terms.

          Delta Vision suggested the Council should have no slots set  
          aside for persons with specific characteristics, all appointed  
          by the governor.  Others suggest that there must be slots for  
          persons with specific characteristics, such as representation or  
          expertise.  This bill appears to be a hybrid of the two  
          approaches.  It requires members "with diverse expertise and a  
          statewide perspective," appointed by several different entities  
          and one regional representative from the Delta, but no other  
          specified slots.  This approach relies on the Senate  
          confirmation process to ensure the Governor's appointments  
          fairly balance different interests and reflect different  
          expertise.  This bill provides the Senate and Assembly an  
          additional method to ensure balance, at least from the Senate  
          and Assembly's perspectives, by allowing each to appoint a  
          member.

           Science Program  :  This bill establishes a "Delta Independent  
          Science Board" and science program, using the CALFED Bay-Delta  
          Program science program as its model.  The CALFED science  
          program has received broad acclaim for success as an effective  
          independent science program, while CALFED now receives intense  
          criticism for its alleged failure to address the Delta's crises.  
           The science program in this bill therefore adopts and succeeds  
          the CALFED science program.

           Delta Watermaster  :  This bill includes a provision that requires  
          SWRCB to appoint a Delta Watermaster.  This version, however, is  








                                                                  SB 1 X7
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          much narrower than the proposal in the August pre-print version,  
          which had broader authority.  The Watermaster in this bill acts  
          by delegation of authority from the SWRCB.  It is SWRCB's  
          enforcement - not adjudicatory - officer, with specified  
          delegated authorities.  The Watermaster's jurisdiction is  
          limited to diversions in the Delta and conditions on permits  
          that relate to conditions in the Delta.

           Federal Government Participation  :  In order to encourage federal  
          government participation under the state's leadership, this bill  
          requires the Delta Plan to be developed consistent with certain  
          statutes that allow for certain state discretion over federal  
          activities.  These statutes include the Coastal Zone Management  
          Act (CZMA), the Reclamation Act of 1902 (which governs the  
          Bureau of Reclamation's Central Valley Project), and the Clean  
          Water Act.  If the Council decides to adopt the Delta Plan  
          pursuant to the CZMA, then the bill requires submission to the  
          Secretary of Commerce for approval, so the state may exercise  
          certain authority over federal agency actions.  It is widely  
          anticipated that California may need Congress to enact laws to  
          protect the Delta consistent with the state's plan - perhaps a  
          "Delta Zone Management Act."  This bill allows for that  
          eventuality, by providing for submission of the Delta Plan to  
          whatever federal official a subsequent federal statute  
          identifies.

           Delta Plan/Balancing Coequal Goals  :  This bill includes  
          substantial detail as to the nature of the Delta Plan, focusing  
          on balancing the two coequal goals of ecosystem restoration and  
          water supply reliability.  It specifies certain elements,  
          strategies for incorporation into the Delta Plan.  It also  
          includes several standards for completion of the plan, such as  
          use of best available science.  All these requirements still  
          connect back to the fundamental "co-equal goals."

           Levees/Flood Protection  :  The bill requires the Delta Plan to  
          reduce risks to people, property and state interests in the  
          Delta with emergency preparedness, appropriate land uses and  
          strategic levee investments.  The Delta Plan will include  
          recommendations for priorities for state investments in levees.   
          These recommendations, in combination with the Council's  
          authority to ensure that state agencies act consistently with  
          the Delta Plan, will ensure that levee spending by DWR and the  
          Central Valley Flood Protection Board (CVFPB) reflects these  
          priorities.  The Legislature generally does not appropriate  








                                                                  SB 1 X7
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          funding to specific Delta levee projects, and has not succeeded  
          in imposing priorities on state levee spending in the Delta.   
          Instead, the State Budget leaves the discretion to DWR and the  
          CVFPB to determine how to spend state money on both levees in  
          the State Plan of Flood Control and non-project levees.  These  
          priorities will affect both the Delta levee subvention program  
          (non-project levees) and the special projects program (levees  
          with a State interest).

           Consistency Review  :  One of the cornerstones of the fundamental  
          change that this bill portends is the development and  
          enforcement of a unified state plan for the Delta.  The bill  
          ensures consistency with the state's Delta Plan by requiring  
          state and local agencies that propose to implement "covered  
          actions" to submit consistency certifications and subjecting  
          those certifications to appeal to the council.  The Council  
          reviews the certification and issues raised by an appellant and  
          determines whether the project is consistent with the Delta  
          Plan, with specific findings.  If not, then the proponent must  
          determine whether to proceed with the project, but must amend  
          and submit a new certification if it decides to proceed with the  
          project.

          The Council's role in developing and enforcing consistency with  
          the Delta Plan will provide a critical component of crafting a  
          coherent and sustainable long-term state policy for the Delta.   
          As the Delta Vision Task Force noted, more than 200 federal,  
          state and local agencies have authority in the Delta.  State  
          policy often has made competing demands on Delta resources,  
          leading to the current crisis.  State agencies often have  
          reached gridlock, allowing the Delta to collapse as they dispute  
          how to proceed.  While the CALFED Bay-Delta Program had the  
          noble goal of coordinating state and federal policy in the  
          Delta, the Bay-Delta Authority lacked the authority to resolve  
          conflicts among agencies and set a unified direction.  When the  
          Delta ecosystem crisis arose, CALFED agencies degenerated into  
          interagency conflict and could not respond adequately to the  
          mounting evidence of crisis, even to complete the Legislature's  
          requirement to develop a short-term response to stabilize the  
          Delta ecosystem.  The Council can provide some coherence to how  
          the State manages important water and environmental resources in  
          the Delta.

           Covered Actions  :  The threshold for certification of consistency  
          and Council review requires the action to fall within the scope  








                                                                  SB 1 X7
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          of "covered actions."  Determining whether a particular project  
          is a "covered action" requires review of both the definition's  
          four factors as well as the exemptions in that definition.  The  
          first, and possibly the most central, factor for that  
          determination is that the project "will occur, in whole or in  
          part, within the boundaries of the Delta or Suisun Marsh."   
          Actions that outside the legal boundaries of the Delta  
          (including Suisun Marsh), such as upstream diversions, will not  
          be covered actions and, therefore, not subject to certification  
          or the Council's consistency review.  The existing diversions by  
          the San Francisco Public Utilities Commission from the upper  
          reaches of the Tuolumne River, for example, do not constitute  
          "covered actions."

          If the project "occurs" in the Delta, it still may not be a  
          "covered action" because an exemption may apply.  The first  
          exemption applies to "regulatory actions," in order to clarify  
          that the Council does not have authority to countermand a  
          regulatory determination, such as a water right or water quality  
          order or a determination under the California Endangered Species  
          Act.  This exemption reaffirms, combined with the savings  
          clauses, the overall intent of the bill that the Council does  
                                                                  not become a super-regulator that can trump regulatory decisions  
          of other agencies.  Recent changes have added several new  
          exemptions that:

          1)Exempt regional transportation plans.

          2)"Grandfather" certain existing activities in the Delta, or  
            activities that have completed the CEQA process by the time  
            the Council adopts the Delta Plan.

          3)Allow continued "routine maintenance and operation" of Delta  
            facilities.

          4)Support sustainable land-use planning under state law.

           Bay Delta Conservation Plan  :  This bill requires Council  
          consideration of the BDCP for incorporation into the larger  
          Delta Plan, but conditions state funding and incorporation of  
          BDCP on DFG's approval as a Natural Community Conservation Plan  
          (NCCP) and completion of robust investigation and analysis  
          pursuant to CEQA.  While some agencies have asserted that BDCP  
          would be an NCCP, the December 2006 planning agreement  
          specifically provided that the signatories were not committed to  








                                                                  SB 1 X7
                                                                  Page  22

          achieving the higher ecosystem recovery standard for an NCCP.   
          This bill sets the higher NCCP standard ("the gold standard") as  
          the threshold for state funding of the public benefits of BDCP  
          activities, while relying on existing law.  The specified issues  
          that will be analyzed under CEQA add credibility to the outcome  
          of BDCP, but also rely on the context of existing CEQA law to  
          ensure an impact on the ultimate BDCP decisions.

           Delta Conveyance  :  This bill does NOT authorize "the Peripheral  
          Canal."  There has been a debate about DWR's legal authority to  
          construct a new Delta water conveyance system, and this bill  
          does not address that issue.  Instead, it specifies certain  
          requirements for BDCP in considering options for changing Delta  
          water conveyance for the State Water Project (SWP) and federal  
          Central Valley Project (CVP).  First, BDCP must analyze certain  
          factors in the CEQA process.  Second, BDCP must meet "the gold  
          standard" of achieving approval as an NCCP, if it wants state  
          funding and incorporation into the long-term Delta Plan.  NCCP  
          requirements include both public process and adaptive management  
          of BDCP projects and programs, which may include new Delta water  
          conveyance.  Third, BDCP must include a "transparent, real-time  
          operational decision-making process" that includes fishery  
          agencies.  Fourth, construction of any new conveyance facility  
          may not start until SWRCB issues the necessary water rights  
          change permits and the water project contractors have agreed to  
          pay the costs of environmental review, planning, design,  
          construction and mitigation of the conveyance facility.

          These requirements ensure that any decision as to a new  
          conveyance system for Delta water will consider all the  
          necessary factors, and CEQA requirements will ensure that  
          environmental impacts will be resolved.  Construction does not  
          start until cost and permitting issues are resolved.  The  
          requirements appear to balance the competing interests in  
          "setting a clear path" to new Delta water conveyance, ensuring  
          restoration of the Delta ecosystem, and providing comprehensive  
          analysis of alternatives that address issues unique to the  
          Delta.

           Delta Finance  :  SB 1 X7 states legislative intent to rely on  
          past water bond funding for the costs of developing the new  
          Delta Plan required by this bill.  Previous proposals to charge  
          fees to fund Delta programs have been deleted.  The bill does  
          require, however, that water users pay the costs of building any  
          new conveyance facility, as well as the costs of any necessary  








                                                                  SB 1 X7
                                                                  Page  23

          mitigation for such facilities.  

           Two-Gates Project  :  This bill promotes implementation of the  
          Federal Government's proposed "Two-Gates Fish Protection  
          Demonstration Program."  This project would experiment with  
          certain flow gates in the Delta to see if it improves conditions  
          for certain at-risk fish species.  The bill identifies this  
          project as an "early action" and appropriates $28 million, from  
          bond funding, as the State's contribution to the experiment.

           Recent Changes  :  Since the Assembly Water, Parks and Wildlife  
          (WP&W) Committee considered the Delta governance and planning  
          provisions, as part of SB 68 (the regular session version of  
          this bill), on September 11, this portion of the 2009  
          Delta/Water legislative package has changed in limited ways, to  
          address certain concerns.

           Governor's Council Appointments:  This bill restructures the  
            original proposal for staggering the Governor's initial  
            appointments to the Council.  Instead of staggering the  
            Governor's first appointments by one to four years, two  
            initial gubernatorial appointees will have four-year terms and  
            two will have six-year terms.  After those initial  
            appointments both gubernatorial and legislative appointees to  
            the Council will have four-year terms.  

           Delta Water Quality:  This bill amended SB 68's original  
            findings and state policies to incorporate water quality  
            concerns for human health and the environment.

           Savings Clauses:  This bill expanded the provisions that  
            preserve legal protections in existing law, to assure that  
            water rights are respected and water right holders receive the  
            procedural and substantive protections of existing law.

           "Covered Actions" Exemptions/Grandfather Clause:  The  
            definition of "covered actions" sets the scope of what agency  
            actions may be appealed to the Council as inconsistent with  
            the Delta Plan.  This bill includes exemptions to the  
            definition for:  1) regulatory actions; 2) regional  
            transportation plans; 3) local plans or projects that comply  
            with Government Code provisions for sustainable communities;  
            4) routine maintenance and operation of federal, state and  
            local government facilities in the Delta; 5) local agency  
            projects that are either "fully permitted" or have completed  








                                                                  SB 1 X7
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            the CEQA process by September 30, 2009; and 6) certain  
            projects in the Delta's secondary zone finalized before  
            adoption of the Delta Plan.
          
           Flow Criteria:  This bill - like SB 68 - requires SWRCB to  
            exercise its public trust authority to develop new "flow  
            criteria" to inform planning decisions for the Delta Plan.   
            Recent changes have added some additional specificity as to  
            the purpose of these flow criteria and the process for SWRCB  
            to develop them.  Specifically, the new language accomplishes  
            two things:  1) focuses this effort on informing planning  
            decisions for the Delta Plan and the Bay Delta Conservation  
            Plan; and, 2) specifies the procedure for SWRCB to develop the  
            flow criteria, relying on an "informational proceeding," not a  
            regulatory proceeding.  Savings clauses also were expanded to  
            ensure protection for water rights.

           Watermaster Authority:  This bill specifies the scope of the  
            Delta Watermaster's authority as applying to diversions in the  
            Delta and board orders that apply to conditions in the Delta.   
            This further specification is consistent with the original  
            definition of the "Delta Watermaster."  It ensures that the  
            Watermaster has authority over both in-Delta water diversions  
            and water project operations outside the Delta where SWRCB has  
            conditioned the water right permits based on conditions in the  
            Delta.  The CVP permits for New Melones Reservoir, for  
            example, are conditioned on compliance with certain Delta  
            water quality requirements, leading to reservoir releases to  
            dilute salinity in the San Joaquin River.


           Analysis Prepared by  :    Alf W. Brandt / W., P. & W. / (916)  
          319-2096 



                                                                FN: 0003494