BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           565 (Pavley)
          
          Hearing Date:  05/28/2009           Amended: 05/04/2009
                                          As proposed to be amended
          Consultant:  Brendan McCarthy   Policy Vote: EQ 5-2
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          BILL SUMMARY: SB 565 requires the State Water Board to develop  
          and implement a plan to ensure that 50 percent of the wastewater  
          currently discharged into the ocean is recycled. The bill  
          requires the State Water Board to impose fee on discharges of  
          wastewater into the ocean to pay for the costs of developing and  
          implementing the plan.  
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
           
          Plan development       Fully offset by fees             Special  
          *                      

          * Ocean Discharge Recycling Fund (new fund). 
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          STAFF COMMENTS: Suspense file. As proposed to be amended.
          
          SB 565 requires the State Water Board, in collaboration with  
          other state agencies and outside stakeholders, to develop a plan  
          to ensure that 50 percent of the wastewater currently discharged  
          into the ocean is recycled by 2030. The plan would identify any  
          regulatory, financial, engineering, or other impediment to  
          achieving the recycling goal. The plan would also include  
          specific actions to remove those impediments. The State Water  
          Board estimates the costs to develop the plan would be about $6  
          million over three years. While the bill requires that fees be  
          assessed to cover the costs of developing the plan, there may be  
          a gap between expenditures and the collection of fee revenues,  
          depending on how long it takes to adopt regulations to impose  
          the fee. The bill requires the State Water Board to adopt  
          measures to implement the plan. It is not clear what the scope  
          of implementation activities would be under the bill. 










          The bill requires the State Water Board to impose an annual fee  
          on discharges of wastewater into the ocean in an amount  
          sufficient to pay for the costs to develop the plan and adopt  
          any measures implementing the plan.

          In June 2003, a legislatively mandated taskforce on recycled  
          water estimated that it would cost about $400 million per year  
          to recycle about 1.5 million acre-feet of wastewater. The task  
          force indicated that it would require about $300 million in  
          financial assistance to achieve this level of recycling. It is  
          not clear whether wastewater dischargers would be able to  
          support fees sufficient to generate this level of revenue.

          As proposed to be amended by author, the bill would only require  
          the development of a plan. The amendments also specify that the  
          fee would also apply to dischargers into the San Francisco Bay  
          and other inland waters, but would not apply to dischargers with  
          a capacity less than 10 million gallons per day.