BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 7XXXXXXX| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 7XXXXXXX Author: Steinberg (D) Amended: 11/2/09 Vote: 21 SUBJECT : Water conservation SOURCE : Author DIGEST : This bill requires the state to achieve a 20 percent reduction in urban per capita water use by December 31, 2020, requires agricultural water management plans and efficient water management practices for agricultural water suppliers, and promotes expanded development of sustainable water supplies at the regional level. Senate Floor Amendments of 11/2/09 attempt to resolve two issues: (1) If and how failure to meet conservation targets could be used in waste and unreasonable use proceedings, and (2) the limits, if any, on an urban water agency's ability to adopt ordinances pursuant to a declaration of drought emergency. The amendments also clarify when the Department of Water Resources adopts a regulation affecting an urban retail water supplier which achieves a reduction in daily per capita use that is greater than 20 percent by December 31, 2020. ANALYSIS : CONTINUED SB 7XXXXXXX Page 2 Specifics of SB 7XXXXXXX 1. Establishes statewide urban water conservation target of 10 percent by 2015, and 20 percent by 2020. 2. Establishes processes for urban water suppliers to meet the conservation targets: A. Requires urban retail water suppliers, individually or on a regional basis, to develop an urban water use target by July 1, 2011. B. Provides four methodologies for urban water suppliers to choose from to set and achieve their water use target: (1) Twenty percent reduction in baseline daily per capita use. (2) A combination of efficiency standards for residential indoor use (55 gallons per capita daily), residential outdoor use (Model Water Efficient Landscape Ordinance), and commercial, industrial, and institutional (CII) use (10 percent reduction). (3) A five percent reduction in the Department of Water Resources (DWR) regional targets. (4) A method to be developed by DWR by December 31, 2010. C. Requires a minimum five percent reduction in base water use by 2020 for all urban water suppliers. D. Allows recycled water to count toward meeting urban supplier's water use target if recycled water offsets potable water demands. E. Allows urban suppliers to consider certain differences in their local conditions when determining compliance. F. Requires urban water suppliers to hold public SB 7XXXXXXX Page 3 hearings to allow for community input on the supplier's implementation plan for meeting their water use target, and requires the implementation to avoid placing a disproportionate burden on any customer sector. G. Conditions eligibility for water management grants and loans on an urban water supplier's compliance with meeting the requirements established by the bill. 3. Prohibits urban suppliers from requiring changes that reduce process water -- defined in the bill as water used in production of a product -- and allows urban water supplier to exclude process water from the development of the urban water target if substantial amount of its water deliveries are for industrial use. 4. Requires DWR review and reporting on urban water management plans and report to the Legislature by 2016 on progress in meeting the 20 percent statewide target, including recommendations on changes to the standards or targets in order to achieve the 20 percent target. 5. Creates a CII Task Force to develop best management practices, assess the potential for statewide water savings if the best management practices are implemented, and report to the Legislature. 6. Re-establishes agricultural water management planning program. A. Defines "agricultural water supplier" as one that delivers water to 10,000 or more of irrigated acres, excluding recycled water, but exempts suppliers serving less than 25,000 irrigated areas unless funding is provided to the supplier for those purposes. B. Requires development and implementation of agricultural water management plans, with specified components by 2012, with five-year updates. C. Requires DWR to review plans and report to the SB 7XXXXXXX Page 4 Legislature on status and effectiveness. D. Requires two "critical" efficient water management practices -- measurement and pricing -- and only if locally cost-effective for 14 additional practices. E. Conditions eligibility for water management grants and loans on an agricultural water suppliers' compliance with meeting the requirements for implementation of efficient water management practices. F. Establishes agricultural water supplier reporting requirements on agricultural efficient water management practices. 7. Requires DWR to promote implementation of regional water resource management practices through increased incentives/removal of barriers and specifies potential changes. 8. Requires DWR, in consultation with the State Water Resources Control Board, to develop or update statewide targets as to recycled water, brackish groundwater desalination, and urban stormwater runoff. 9. Takes effect only if SB 1, SB 5, and SB 7 of the 2009-10 Seventh Extraordinary Session of the Legislature are enacted and become effective. Background Under existing law, the California Water Plan is accepted as the master plan that guides the orderly and coordinated control, protection, conservation, development, management and efficient utilization of the water resources of the state. DWR is required to update the Water Plan on or before December 31, 2003, and every five years thereafter. The plan shall include a discussion of various strategies that may be pursued in order to meet the future water needs of the state. The Urban Water Management Planning Act requires urban water suppliers to prepare and submit Urban Water SB 7XXXXXXX Page 5 Management Plans to DWR every five years on or before December 31, in years ending in five and zero. Among other things, the plans are required to: 1. Describe the reliability of the water supply by water year type (average, single dry year, etc.). 2. Quantify, to the extent records are available, past, current, and projected water use, identifying the uses among water use sectors (residential, commercial, etc.). 3. Describe each water demand management measure currently being implemented, or scheduled for implementation. The Agricultural Water Management Planning Act required agricultural water suppliers that supply more than 50,000 acre-feet of water annually to develop agricultural water management plans by 1992. Among other things, and to the extent information was available, the reports were to address the following: 1. Current water conservation and reclamation practices being used. 2. Plans for changing current water conservation plans. 3. Conservation educational services being used. 4. Whether the supplier, through improved irrigation water management, has a significant opportunity to do one or both of the following: A. Save water by means of reduced evapotranspiration, evaporation, or reduction of flows to unusable water bodies that fail to serve further beneficial uses. B. Reduce the quantity of highly saline or toxic drainage water. Existing law makes the terms of, and eligibility for, a water management grant or loan made to an urban water supplier and awarded or administered by the department, state board, or California Bay-Delta Authority or its successor agency conditioned on the implementation of the SB 7XXXXXXX Page 6 water demand management measures identified in the Urban Water Management Planning Act. Under Federal law (Section 210 Public Law 97-293 of 1982) all Central Valley Project contractors are required to develop water conservation plans. In 1993, the Central Valley Project Improvement Act Section 3405(e) required the Bureau of Reclamation to develop criteria to determine the adequacy of the water conservation plans required by Section 210. The Bureau adopted the criteria in 1993, and the most recent update was done in 2005. On February 28, 2008, Governor Schwarzenegger sent a letter to Senators Perata, Steinberg, and Machado in response to their concerns that his Administration was unilaterally beginning work on a "peripheral canal." In that letter, the Governor identified administrative actions he was considering as part of a comprehensive solution in the Delta. Included in that letter was the following "key element:" A plan to achieve a 20 percent reduction in per capita water use statewide by 2020. Conservation is one of the key ways to provide water for Californians and protect and improve the Delta ecosystem. A number of efforts are already underway to expand conservation programs, but I plan to direct state agencies to develop this more aggressive plan and implement it to the extent permitted by current law. I would welcome legislation to incorporate this goal into statute. Comments Urban Water Conservation . This bill establishes a statewide target to reduce urban per capita water use by 20 percent by 2020. This target is consistent with the Governor's February 2008 proposal. The Delta Vision Strategic Plan also recommended legislation requiring "Urban water purveyors to implement measures to achieve a 20 percent reduction in urban per capita water use statewide throughout California by December 31, 2020." This bill requires urban retail water suppliers, individually or on a regional basis, to develop an urban water use target by December 31, 2010, requires each urban SB 7XXXXXXX Page 7 water supplier to meet their target by 2020, and to meet an interim target (half of their 2020 target) by 2015. Flexibility . This bill provides options for how water agencies can achieve higher levels of water conservation but requires those options to meet a per capita reduction in water use. This bill sets the "20 by 2020" target (and the interim 2015 target) for the entire state and then allows water agencies to choose one of four methods for determining their own water-use target for 2020. Water suppliers also can choose to join with a broader group of suppliers to meet the targets regionally. Finally, this bill provides urban water suppliers with the option of shifting more water use to recycled water to meet their targets. CII Water Management . This bill restricts urban water suppliers from imposing conservation requirements on process water. Other sections of the proposal address other CII concerns, including requiring urban water suppliers to avoid disproportionate impacts on any one sector and requiring an open transparent process for all water customers to review and provide input into the water supplier implementation plan. There are also no mandated conservation requirements or targets in the bill for CII. Agricultural Water Management . For agriculture, this bill relies on implementation of efficient water management practices (EWMPs) for water use, which have been developed, at least in part, by the Agricultural Water Management Council. This bill creates two EWMP categories: "critical" that all agricultural water suppliers (i.e. measurement and pricing structures) must implement and "additional" EWMPs that must be implemented if the measures are locally cost effective and technically feasible. The two mandatory EWMPs are already required of all federal water contractors (e.g. Westlands Water District and Friant Water Authority) since 1992 under the Central Valley Project Improvement Act. Agricultural Water Management Plans . This bill reauthorizes dormant provisions of the Water Code that required agricultural water suppliers to prepare agricultural water management plans. This bill places SB 7XXXXXXX Page 8 agricultural water suppliers on an equal footing with urban suppliers who have been required to prepare and submit water management plans for approximately 15 years. This bill defines agricultural water suppliers as those with 10,000 acres of irrigated land, but exempts from the bill's requirements any supplier serving less than 25,000 of irrigated land if the state does not provide funding for implementation. Sustainable Water Management . This bill requires DWR to develop incentives for sustainable water management and alternative water supplies such as brackish water desalination and stormwater recovery. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Unable to verify at time of writing) Unknown at this time. OPPOSITION : (Unable to verify at time of writing) Unknown at this time. DLW:mw 11/2/09 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****