Amended in Senate August 26, 2013

Amended in Assembly May 21, 2013

Amended in Assembly April 23, 2013

Amended in Assembly April 1, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1331

Introduced by Committee on Water, Parks and Wildlife (Assembly Members Rendon (Chair), Blumenfield, Bocanegra, Fong, Frazier, Gatto, Gomez, Gray, and Yamada)

February 22, 2013

An act begin delete relating to water resources end delete begin insert to repeal and add Division 26.7 (commencing with Section 79700) of the Water Code, and to repeal Section 2 of Chapter 3 of the Seventh Extraordinary Session of the Statutes of 2009, relating to a climate change response for clean and safe drinking water program, by providing the funds necessary therefor through an election for the issuance and sale of bonds of the State of California and for the handling and disposition of those funds end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 1331, as amended, Committee on Water, Parks and Wildlife. begin delete Water resources: assessments of public funding. end delete begin insert Climate Change Response for Clean and Safe Drinking Water end insert begin insert Act of 2014. end insert

begin insert

(1) Existing law, the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, if approved by the voters, would authorize the issuance of bonds in the amount of $11,140,000,000 pursuant to the State General Obligation Bond Law to finance a safe drinking water and water supply reliability program. Existing law provides for the submission of the bond act to the voters at the November 4, 2014, statewide general election.

end insert begin insert

This bill would repeal these provisions.

end insert begin insert

(2) Under existing law, various measures have been approved by the voters to provide funds for water supply and protection facilities and programs.

end insert begin insert

This bill would enact the Climate Change Response for Clean and Safe Drinking Water Act of 2014, which, if adopted by the voters, would authorize the issuance of bonds in the amount of $6,500,000,000 pursuant to the State General Obligation Bond Law to finance a climate change response for clean and safe drinking water program.

end insert begin insert

This bill would provide for the submission of the bond act to the voters at the November 4, 2014, statewide general election.

end insert begin delete

(1) Existing law establishes the Department of Water Resources in the Natural Resources Agency, and, among other things, empowers the department to conduct investigations of all or any portion of any stream, stream system, lake, or other body of water.

end delete begin delete

This bill would require the Department of Water Resources to provide an analysis to the Legislature by July 1, 2014, that assesses currently available public funding and estimates the additional level of public investment needed to ensure California meets priority needs related to infrastructure, integrated water management, water supply reliability, water recycling, flood management, and watershed and aquatic ecosystem conservation and protection.

end delete begin delete

(2) Existing law establishes various state water policies, including the policy that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.

end delete begin delete

The bill would require the State Water Resources Control Board and the Division of Drinking Water and Environmental Management of the State Department of Public Health to provide an analysis to the Legislature by July 1, 2014, that assess currently available public funding and estimates the additional level of public investment needed to ensure that all Californians have access to safe drinking water and prioritize the projects necessary to achieve this goal.

end delete begin delete

(3) Existing law establishes various policies of the state relative to the Sacramento-San Joaquin Delta.

end delete begin delete

This bill would express findings and declarations including, among other things, that the November 2014 ballot currently includes a bond measure for $11.14 billion to fund projects related to water, and that it is in the public interest to pass a general obligation bond that includes, but is not limited to, grants and loans to state and local agencies to help meet prescribed critical funding needs. The bill would require the Delta Stewardship Council to provide an analysis to the Legislature by July 1, 2014, that assesses currently available public funding and estimates the additional level of public investment needed to implement the Delta Plan.

end delete

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Division 26.7 (commencing with Section 79700)
of the end insert begin insert Water Code end insert begin insert , as added by Section 1 of Chapter 3 of the
Seventh Extraordinary Session of the Statutes of 2009, is repealed. end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Division 26.7 (commencing with Section 79700) is
added to the end insert begin insert Water Code end insert begin insert , to read: end insert

begin insert

 

Division  begin insert 26.7. end insert   The Climate Change Response for
Clean and Safe Drinking Water Act of 2014.

 

Chapter   begin insert 1. end insert Short Title

 

begin insert 79700. end insert   

This division shall be known, and may be cited, as the
Clean and Safe Drinking Water and Climate Change Response
Act of 2014.

 

Chapter   begin insert 2. end insert Definitions

 

begin insert 79701. end insert   

The people of California find and declare all of the
following:

(a) Safeguarding supplies of clean and safe drinking water to
California’s homes, businesses, and farms is an essential
responsibility of government, and critical to protecting the quality
of life for Californians.

(b) Every Californian should have access to clean, safe, and
reliable drinking water, consistent with the human right to water
and Section 106.3. Providing adequate supplies of clean, safe, and
reliable drinking water is vital to keeping California’s economy
growing and strong.

(c) Climate change has impaired California’s capacity to ensure
clean, safe, and reliable drinking water, as droughts have become
more frequent and more severe, and ecosystems have become
stressed. Higher temperatures mean less snow pack, which is the
state’s largest water reservoir. Scientists project a loss of at least
25 percent of the snow pack in the Sierra Nevada Mountains by
2050.

(d) California’s water infrastructure continues to age and
deteriorate. More than 50 years ago, Californians approved the
construction of the State Water Project. In the decades that
followed, California’s water leaders developed the most
sophisticated system of state, federal, regional, and local water
infrastructure anywhere in the world. In recent decades, however,
that water infrastructure and the water environment on which it
depends have deteriorated.

(e) In the years since the voters approved the state water project,
California’s population has continued to grow, from less than 16
million in 1960 to more than 37 million in 2010. A growing
population and a growing economy have put greater stress on
California’s natural resources, including water. Contamination
of groundwater aquifers from a vibrant economy has threatened
vital drinking water supplies.

(f) As California and its water infrastructure have grown,
increasing demands on California’s limited water supplies and
deteriorating aquatic ecosystems have led to intense conflict,
further threatening the reliability of clean and safe drinking water.

begin insert 79702. end insert   

The people of California find and declare all of the
following:

(a) A sustainable water future can provide the means for
California to maintain vibrant communities, globally competitive
agriculture, and heathy ecosystems, which are all a part of the
quality of life that attracts so many to live in California.

(b) Responding to climate change, ensuring clean and safe
drinking water, and preparing for California’s continued growth
will require a diversified portfolio of strategies and investments
to address the many water challenges facing California.

(c) Improving water quality offers one of the most immediate
steps to ensuring a clean and safe drinking water supply. California
needs water quality improvements at all parts of the hydrologic
cycle, from source water in the watersheds where the state’s
drinking water supplies originate to wastewater treatment to
improve surface water quality for those who live downstream.

(d) Addressing the challenges to the sustainability of the Delta,
the heart of the California water system, will help resolve some
of the conflicts that impede progress in improving the statewide
water system.

(e) Enhancing regional water self-reliance offers a key strategy
for addressing climate change and improving water supply
reliability. It helps the Delta and it helps local communities to
address their own water challenges. Water conservation and water
recycling form one part of the regional water self-reliance strategy
and are commonsense methods to make more efficient use of
existing water supplies.

 

Chapter   begin insert 3. end insert Definitions

 

begin insert 79703. end insert   

Unless the context otherwise requires, the definitions
set forth in this section govern the construction of this division, as
follows:

(a) “CALFED Bay-Delta Program” means the program
described in the Record of Decision dated August 28, 2000.

(b) “Commission” means the California Water Commission.

(c) “Committee” means the Climate Change Response for Clean
and Safe Drinking Water Finance Committee created by Section
79802.

(d) “Delta” means the Sacramento-San Joaquin Delta, as
defined in Section 85058.

(e) “Delta conveyance facilities” means facilities that convey
water directly from the Sacramento River to the State Water Project
or the federal Central Valley Project pumping facilities in the
south Delta.

(f) “Delta counties” means the Counties of Solano, Yolo,
Sacramento, Contra Costa, and San Joaquin.

(g) “Department” means the Department of Water Resources.

(h) “Director” means the Director of Water Resources.

(i) “Disadvantaged community” has the meaning set forth in
subdivision (a) of Section 79505.5.

(j) “Economically distressed area” means a municipality with
a population of 20,000 persons or less, a rural county, or a
reasonably isolated and divisible segment of a larger municipality
where the segment of the population is 20,000 persons or less,
with an annual median household income that is less than 85
percent of the statewide median household income, and with one
or more of the following conditions as determined by the
department:

(1) Financial hardship.

(2) Unemployment rate at least 2 percent higher than the
statewide average.

(3) Low population density.

(k) “Fund” means the Climate Change Response for Clean and
Safe Drinking Water Fund of 2014 created by Section 79717.

(l) “Integrated regional water management plan” has the
meaning set forth in Section 10534.

(m) “Nonprofit organization” means an organization qualified
to do business in California and qualified under Section 501(c)(3)
of Title 26 of the United States Code.

(n) “Public agency” means a state agency or department,
district, joint powers authority, city, county, city and county, or
other political subdivision of the state.

(o) “Rainwater” has the meaning set forth in subdivision (c) of
Section 10573.

(p) “State General Obligation Bond Law” means the State
General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code).

(q) “Stormwater” has the meaning set forth in subdivision (e)
of Section 10573.

 

Chapter   begin insert 4. end insert General Provisions

 

begin insert 79705. end insert   

An amount that equals not more than 5 percent of the
funds allocated for a grant program pursuant to this division may
be used to pay the administrative costs of that program.

begin insert 79706. end insert   

Up to 10 percent of funds allocated for each program
funded by this division may be expended for planning and
monitoring necessary for the successful design, selection, and
implementation of the projects authorized under that program.
This section shall not otherwise restrict funds ordinarily used by
an agency for “preliminary plans,” “working drawings,” and
“construction” as defined in the annual Budget Act for a capital
outlay project or grant project. Water quality monitoring shall be
integrated into the surface water ambient monitoring program
administered by the State Water Resources Control Board.
Watershed monitoring shall be integrated into the statewide
watershed program administered by the Department of
Conservation.

begin insert 79707. end insert   

Chapter 3.5 (commencing with Section 11340) of Part
1 of Division 3 of Title 2 of the Government Code does not apply
to the development or implementation of programs or projects
authorized or funded under this division other than Chapter 9
(commencing with Section 79760).

begin insert 79708. end insert   

(a) Prior to disbursing grants or loans pursuant to this
division, each state agency that receives an appropriation from
the funding made available by this division to administer a
competitive grant or loan program under this division shall develop
and adopt project solicitation and evaluation guidelines. The
guidelines shall include monitoring and reporting requirements
and may include a limitation on the dollar amount of grants or
loans to be awarded.

(b) Prior to disbursing grants or loans, the state agency shall
conduct three public meetings to consider public comments prior
to finalizing the guidelines. The state agency shall publish the draft
solicitation and evaluation guidelines on its Internet Web site at
least 30 days before the public meetings. One meeting shall be
conducted at a location in northern California, one meeting shall
be conducted at a location in the central valley of California, and
one meeting shall be conducted at a location in southern
California. Upon adoption, the state agency shall transmit copies
of the guidelines to the fiscal committees and the appropriate policy
committees of the Legislature.

begin insert 79709. end insert   

It is the intent of the people that:

(a) The investment of public funds pursuant to this division will
result in public benefits.

(b) Beneficiaries pay for the benefits they receive from projects
funded pursuant to this division.

(c) Any relevant statute enacted before voters approve this bond
shall be considered in the appropriation and expenditure of the
funding authorized by this division.

(d) In the appropriation and expenditure of funding authorized
by this division, priority shall be given to projects that leverage
private, federal, or local funding or produce the greatest public
benefit.

(e) A funded project advances the purposes of the chapter from
which the project received funding.

(f) In making decisions regarding water resources, state and
local water agencies use the best available science to inform those
decisions.

(g) Special consideration will be given to projects that employ
new or innovative technology or practices, including decision
support tools that demonstrate the multiple benefits of integrating
multiple jurisdictions, including, but not limited to, water supply,
flood control, land use, and sanitation.

begin insert 79710. end insert   

(a) The California State Auditor shall annually conduct
a programmatic review and an audit of expenditures from the fund.

(b) Notwithstanding Section 10231.5 of the Government Code,
the California State Auditor shall report its findings annually on
or before March 1 to the Governor and the Legislature, and shall
make the findings available to the public.

begin insert 79711. end insert   

Funds provided by this division shall not be expended
to support or pay for the costs of environmental mitigation
measures or compliance obligations of any party except as part
of the environmental mitigation costs of projects financed by this
division. Funds provided by this division may be used for
environmental enhancements or other public benefits.

begin insert 79712. end insert   

Funds provided by this division shall not be expended
to pay the costs of the design, construction, operation, or
maintenance of Delta conveyance facilities. Those costs shall be
the responsibility of the water agencies that benefit from the design,
construction, operation, or maintenance of those facilities.

begin insert 79713. end insert   

(a) This division does not diminish, impair, or
otherwise affect in any manner whatsoever any area of origin,
watershed of origin, county of origin, or any other water rights
protections, including, but not limited to, rights to water
appropriated prior to December 19, 1914, provided under the law.
This division does not limit or affect the application of Article 1.7
(commencing with Section 1215) of Chapter 1 of Part 2 of Division
2, Sections 10505, 10505.5, 11128, 11460, 11461, 11462, and
11463, and Sections 12200 to 12220, inclusive.

(b) For the purposes of this division, an area that utilizes water
that has been diverted and conveyed from the Sacramento River
hydrologic region, for use outside the Sacramento River hydrologic
region or the Delta, shall not be deemed to be immediately adjacent
thereto or capable of being conveniently supplied with water
therefrom by virtue or on account of the diversion and conveyance
of that water through facilities that may be constructed for that
purpose after January 1, 2014.

(c) Nothing in this division supersedes, limits, or otherwise
modifies the applicability of Chapter 10 (commencing with Section
1700) of Part 2 of Division 2, including petitions related to any
new conveyance constructed or operated in accordance with
Chapter 2 (commencing with Section 85320) of Part 4 of Division
35.

(d) Unless otherwise expressly provided, nothing in this division
supersedes, reduces, or otherwise affects existing legal protections,
both procedural and substantive, relating to the state board’s
regulation of diversion and use of water, including, but not limited
to, water right priorities, the protection provided to municipal
interests by Sections 106 and 106.5, and changes in water rights.
Nothing in this division expands or otherwise alters the state
board’s existing authority to regulate the diversion and use of
water or the courts’ existing concurrent jurisdiction over California
water rights.

(e) Nothing in this division shall be construed to affect any
contract related to water in any way connected to the Delta.

(f) Nothing in this division shall be construed to affect the
California Wild and Scenic Rivers Act (Chapter 1.4 (commencing
with Section 5093.50) of Division 5 of the Public Resources Code)
and funds authorized pursuant to this division shall not be available
for any project that could have an adverse effect on the free flowing
condition of a wild and scenic river.

begin insert 79714. end insert   

Eligible applicants under this division are public
agencies, nonprofit organizations, public utilities, and mutual
water companies. To be eligible for funding under this division, a
project proposed by a public utility that is regulated by the Public
Utilities Commission or a mutual water company shall have a
clear and definite public purpose and shall benefit the customers
of the water system.

begin insert 79715. end insert   

The Legislature may enact legislation necessary to
implement programs funded by this division.

begin insert 79716. end insert   

Unless otherwise specified, any state agency may be
eligible for appropriations from the funding made available by
this division.

begin insert 79717. end insert   

The proceeds of bonds issued and sold pursuant to this
division shall be deposited in the Climate Change Response for
Clean and Safe Drinking Water Fund of 2014, which is hereby
created in the State Treasury.

 

Chapter   begin insert 5. end insert Water Quality and Clean and Safe Drinking
Water

 

begin insert 79720. end insert   

The sum of one billion dollars ($1,000,000,000) shall
be available, upon appropriation by the Legislature from the fund,
for expenditures, grants, and loans for projects that improve water
quality or help provide clean and safe drinking water to all
Californians.

begin insert 79721. end insert   

The projects eligible for funding pursuant to this chapter
shall help improve water quality for all beneficial uses. The
purposes of this chapter are to:

(a) Reduce contaminants in drinking water supplies regardless
of the source of the water or the contamination, including the
assessment and prioritization of the risk to the safety of drinking
water supplies.

(b) Address the critical and immediate needs of disadvantaged,
rural, or small communities that suffer from contaminated drinking
water supplies, including, but not limited to, projects that address
a public health emergency.

(c) Leverage other private, federal, state, and local drinking
water quality and wastewater treatment funds.

(d) Reduce contaminants in discharges to, and improve the
quality of, surface water streams.

(e) Improve water quality of surface water streams, including
stormwater quality.

(f) Prevent further contamination of drinking water supplies.

(g) Provide disadvantaged communities with public drinking
water infrastructure that provides clean and safe drinking water
supplies that the community can sustain over the long term.

(h) Ensure access to clean and safe drinking water for
California’s communities.

begin insert 79722. end insert   

(a) A project that receives funding under this chapter
shall be selected by a competitive grant or loan process with added
consideration for those projects that leverage private, federal, or
local funding. Special consideration shall also be given to a project
focused on groundwater clean up.

(b) An agency administering grants or loans for the purposes
of this chapter shall assess the capacity of a community to pay for
the operation and maintenance of the facility to be funded.

begin insert 79723. end insert   

An applicant for a project to clean up a groundwater
aquifer shall demonstrate that a public agency has authority to
manage the water resources in that aquifer in order to be eligible
for funding pursuant to this chapter. This section does not apply
to projects that install treatment facilities at the wellhead, customer
connection, or the tap.

begin insert 79724. end insert   

The contaminants that may be addressed with funding
pursuant to this chapter may include, but shall not be limited to,
nitrates, perchlorate, MTBE (methyl tertiary butyl ether), arsenic,
salinity, hexavalent chromium, mercury, PCE (perchloroethylene),
TCE (trichloroethylene), DCE (dichloroethene), DCA
(dichloroethane), and carbon tetrachloride.

begin insert 79725. end insert   

(a) Of the funds authorized in Section 79720, up to
one hundred million dollars ($100,000,000) shall be available for
deposit in the State Water Pollution Control Revolving Fund Small
Community Grant Fund created pursuant to Section 13477.6 for
grants for wastewater treatment projects. Priority shall be given
to projects that serve disadvantaged communities and severely
disadvantaged communities, and to projects that address public
health hazards. Special consideration shall be given to small
communities with limited financial resources. Projects shall
include, but not be limited to, projects that identify, plan, design,
and implement regional mechanisms to consolidate wastewater
systems or provide affordable treatment technologies.

(b) Of the funds authorized in Section 79720, up to two hundred
fifty million dollars ($250,000,000) shall be available to support
projects that address the management of stormwater quality.

begin insert 79726. end insert   

For the purposes of awarding funding under this
chapter, a local cost share of not less than 50 percent of the total
costs of the project shall be required. The cost-sharing requirement
may be waived or reduced for projects that directly benefit a
disadvantaged community or an economically distressed area.

 

Chapter   begin insert 6. end insert Protecting Rivers, Lakes, Streams, and
Watersheds

 

begin insert 79730. end insert   

The sum of one billion five hundred million dollars
($1,500,000,000) shall be available, upon appropriation by the
Legislature from the fund, in accordance with this chapter, for
expenditures and grants for ecosystem and watershed protection
and restoration projects, including, but not limited to, for all of
the following watersheds:

(a) The San Joaquin River watershed.

(b) The Kern River and Tulare Basin watersheds.

(c) The Salton Sea and Colorado River watersheds.

(d) The Los Angeles River watershed.

(e) The San Gabriel River watershed.

(f) The Santa Ana River watershed.

(g) The Klamath River watershed, including the Trinity, Scott,
and Shasta Rivers and watersheds.

(h) The North Coast watersheds.

(i) The San Francisco Bay watersheds.

(j) The Central Coast watersheds.

(k) The South Coast watersheds.

(l) The Lake Tahoe Basin watershed.

(m) The Sacramento River watershed, including the Yolo Bypass.

(n) The San Diego County coastal watersheds.

(o) The Ventura River watershed.

(p) The Sierra Nevada Mountain watersheds.

(q) The Mojave River watershed.

(r) The Owens River watershed.

(s) The Santa Monica Bay watershed.

(t) The watersheds of Marin County.

(u) The watersheds of Orange County.

begin insert 79731. end insert   

In protecting and restoring California rivers, lakes,
streams, and watersheds, the purposes of this chapter are to:

(a) Protect and increase the economic benefits arising from
healthy watersheds, fishery resources, and instream flow.

(b) Help watershed ecosystems adapt to climate change.

(c) Restore river parkways throughout the state, including, but
not limited to, projects in the Urban Streams Restoration Program
established pursuant to Section 7048.

(d) Protect and restore aquatic, wetland, and migratory bird
ecosystems, including fish and wildlife corridors.

(e) Fulfill the obligations of the State of California in complying
with the terms of multi-party settlement agreements related to
water resources.

(f) Remove barriers to fish passage.

(g) Collaborate with federal agencies in the protection of fish
native to California.

(h) Implement fuel treatment projects to reduce wildfire risks,
protect watersheds tributary to water storage facilities, and
promote watershed health.

(i) Protect and restore watershed health to improve watershed
storage capacity, forest health, protection of life and property,
and greenhouse gas reduction.

begin insert 79732. end insert   

For restoration and ecosystem protection projects under
this chapter, the services of the California Conservation Corps or
community conservation corps shall be used whenever feasible.

begin insert 79733. end insert   

(a) Of the funds authorized in Section 79730, five
hundred million dollars ($500,000,000) shall be available to fulfill
the obligations of the State of California in complying with the
terms of any of the following:

(1) The February 18, 2010, Klamath Basin Restoration
Agreement.

(2) The Qualification Settlement Agreement, as defined in
subdivision (a) of Section 1 of Chapter 617 of the Statues of 2002.

(3) The San Joaquin River Restoration Settlement, as described
in Part I of Subtitle A of Title X of Public Law 111-11.

(b) Of the funds authorized in Section 79730, two hundred fifty
million dollars ($250,000,000) shall be available to the Natural
Resources Agency to support projects of a state conservancy as
provided in the conservancy’s strategic plan.

begin insert 79734. end insert   

For the purposes of this chapter, the terms “protection”
and “restoration” have the meanings set forth in Section 75005
of the Public Resources Code.

 

Chapter   begin insert 7. end insert Climate Change Preparedness for Regional
Water Security

 

begin insert 79740. end insert   

The sum of one billion five hundred million dollars
($1,500,000,000) shall be available, upon appropriation by the
Legislature from the fund, for expenditures and competitive grants
and loans to eligible projects that are included in, and implement
an adopted integrated regional water management plan consistent
with Part 2.2 (commencing with Section 10530) of Division 6.

begin insert 79741. end insert   

In order to improve regional water self-reliance security
and adapt to the effects on water supply arising out of climate
change, the purposes of this chapter are to:

(a) Help water infrastructure systems adapt to climate change.

(b) Incentivize water agencies throughout each watershed to
collaborate in managing the region’s water resources and setting
regional priorities for water infrastructure.

(c) Improve regional water self-reliance, including projects that
reduce reliance on the Delta in meeting California’s future water
supply needs, consistent with Section 85021.

(d) Fund the increment of project costs related to the project’s
public benefits.

begin insert 79742. end insert   

(a) In selecting among proposed projects in a
watershed, the scope of the adopted integrated regional water
management plan may be considered by the administering state
agency, with priority going to projects in plans that cover a greater
portion of the watershed. If a plan covers substantially all of the
watershed, then the plan’s project priorities shall be given
deference.

(b) An urban water supplier that does not prepare, adopt, and
submit its urban water management plan in accordance with the
Urban Water Management Planning Act (Part 2.6 (commencing
with Section 10610) of Division 6) is ineligible to receive funds
made available pursuant to this chapter until the urban water
management plan is prepared and submitted in accordance with
the requirements of that act.

(c) An agricultural water supplier that does not prepare, adopt,
and submit its agricultural water management plan in accordance
with the Agricultural Water Management Planning Act (Part 2.8
(commencing with Section 10800) of Division 6) is ineligible to
receive funds made available pursuant to this chapter until the
agricultural water management plan is prepared and submitted
in accordance with the requirements of that act.

(d) For the purposes of awarding funding under this chapter,
a local cost share of not less than 50 percent of the total costs of
the project shall be required. The cost sharing requirement may
be waived or reduced for projects that directly benefit a
disadvantaged community or an economically distressed area.

(e) Not less than 10 percent of the funds authorized by this
chapter shall be allocated to projects that directly benefit
disadvantaged communities.

(f) For the purposes of awarding a grant under this chapter,
the applicant shall demonstrate that the integrated regional water
management plan the applicant’s project implements addresses
the risks in the region to water supply and water infrastructure
arising from climate change.

begin insert 79743. end insert   

Subject to the determination of regional priorities by
the regional water management group, eligible projects may
include, but are not limited to, projects that promote any of the
following:

(a) Water re-use and recycling.

(b) Water-use efficiency and water conservation.

(c) Local and regional surface and underground water storage.

(d) Regional water conveyance facilities that improve
integration of separate water systems.

(e) Watershed protection, restoration, and management projects.

(f) Stormwater resource management, including but not limited
to the following:

(1) Projects to reduce, manage, treat, or capture rainwater or
stormwater.

(2) Projects that provide multiple benefits such as water quality,
water supply, flood control, or open space.

(3) Decision support tools that evaluate the benefits and costs
of multi-benefit stormwater projects.

(4) Projects to implement a stormwater resource plan developed
in accordance with Part 2.3 (commencing with Section 10560) of
Division 6.

(g) Conjunctive use of surface and groundwater storage
facilities.

(h) Water desalination projects that incorporate renewable
energy generation and reduce Delta exports.

begin insert 79744. end insert   

(a) Of the funds authorized in Section 79740, one
billion dollars ($1,000,000,000) shall be allocated to the
hydrologic regions as identified in the California Water Plan in
accordance with this section. For the South Coast hydrologic
region, the department shall establish three funding areas that
reflect the watersheds of San Diego County (designated as the San
Diego subregion), the Santa Ana River watershed and southern
Orange County (designated as the Santa Ana subregion), and the
Los Angeles and Ventura County watersheds (designated as the
Los Angeles subregion), and shall allocate funds to those areas
in accordance with this subdivision. The North and South Lahontan
hydrologic regions shall be treated as one area for the purpose of
allocating funds. For purposes of this subdivision, the Sacramento
River hydrologic region does not include the Delta. For purposes
of this subdivision, the Mountain Counties Overlay is not eligible
for funds from the Sacramento River hydrologic region or the San
Joaquin River hydrologic region. Multiple integrated regional
water management plans may be recognized in each of the areas
allocated funding.

(b) Funds made available by this chapter shall be allocated as
follows:

(1) North Coast: $45,000,000.

(2) San Francisco Bay: $132,000,000.

(3) Central Coast: $58,000,000.

(4) Los Angeles subregion: $198,000,000.

(5) Santa Ana subregion: $128,000,000.

(6) San Diego subregion: $87,000,000.

(7) Sacramento River: $76,000,000.

(8) San Joaquin River: $64,000,000.

(9) Tulare/Kern: $70,000,000.

(10) North/South Lahontan: $51,000,000.

(11) Colorado River Basin: $47,000,000.

(12) Mountain Counties Overlay: $44,000,000.

begin insert 79745. end insert   

(a) Of the funds authorized by 79740 up to two hundred
fifty million dollars ($250,000,000) may be used for direct
expenditures, grants, and loans for water conservation and water
use efficiency plans, projects, and programs, including either of
the following:

(1) Urban water conservation plans, projects, and programs,
including regional projects and programs, implemented to achieve
urban water use targets developed pursuant to Section 10608.20.
Priority for funding shall be given to programs that do any of the
following:

(A) Assist water suppliers and regions to implement conservation
programs and measures that are not locally cost-effective.

(B) Support water supplier and regional efforts to implement
programs targeted to enhance water use efficiency for commercial,
industrial, and institutional water users.

(C) Assist water suppliers and regions with programs and
measures targeted toward realizing the conservation benefits of
implementation of the provisions of the state landscape model
ordinance.

(2) Agricultural water management plans or agricultural water
use efficiency projects and programs developed pursuant to Part
2.8 (commencing with Section 10800) of Division 6.

(b) Section 1011 applies to all conservation measures that an
agricultural water supplier or an urban water supplier implements
with funding under this chapter. This subdivision does not limit
the application of Section 1011 to any other measures or projects
implemented by a water supplier.

begin insert 79746. end insert   

Of the funds authorized by 79740, the sum of five
hundred million dollars ($500,000,000) shall be available, upon
appropriation by the Legislature from the fund, for grants and
loans for water recycling and advanced treatment technology
projects, including all of the following:

(a) Water recycling projects.

(b) Contaminant and salt removal projects, including, but not
limited to, groundwater and seawater desalination.

(c) Dedicated distribution infrastructure for recycled water and
commercial and industrial end-user retrofit projects to allow use
of recycled water.

(d) Pilot projects for new salt and contaminant removal
technology.

(e) Groundwater recharge infrastructure related to recycled
water.

(f) Technical assistance and grant writing assistance for
disadvantaged communities.

(g) For projects funded pursuant to this section, at least a 50
percent local cost share shall be required. That cost share may be
suspended or reduced for disadvantaged communities and
economically distressed areas.

(h) Projects funded pursuant to this section shall be selected
on a competitive basis, considering all of the following criteria:

(1) Water supply reliability improvement.

(2) Water quality and ecosystem benefits related to decreased
reliance on diversions from the Delta or instream flows.

(3) Public health benefits from improved drinking water quality.

(4) Cost effectiveness.

(5) Energy efficiency and greenhouse gas emission impacts.

begin insert 79747. end insert   

In order to receive funding authorized by this chapter
to address groundwater quality or supply in an aquifer, the
applicant shall demonstrate that a public agency has authority to
manage the water resources in that aquifer.

 

Chapter   begin insert 8. end insert Delta Sustainability

 

begin insert 79750. end insert   

(a) The sum of one billion ($1,000,000,000) shall be
available, upon appropriation by the Legislature from the fund,
for grants and direct expenditures to improve the sustainability of
the Delta.

(b) This chapter provides state funding for public benefits
associated with projects needed to assist in the Delta’s
sustainability as a vital resource for fish, wildlife, water quality,
water supply, agriculture, and recreation.

begin insert 79751. end insert   

In order to promote the sustainability and resiliency
of the Delta, the purposes of this chapter are to:

(a) Protect, restore, and enhance the Delta ecosystem.

(b) Maintain and improve existing Delta levees.

(c) Promote the sustainability of the Delta.

begin insert 79752. end insert   

The funds authorized in Section 79750 shall not be used
to pay the costs of exercising eminent domain.

begin insert 79753. end insert   

Any project funded by this chapter shall include a
partner from one of the five Delta counties.

begin insert 79754. end insert   

Funding authorized by this chapter for the purpose of
subdivision (a) of Section 79751 may include, but is not limited
to, the following:

(a) Projects to protect and restore native fish and wildlife
dependent on the Delta ecosystem, including improvement of
aquatic or terrestrial habitat or the removal or reduction of
undesirable invasive species.

(b) Projects to reduce greenhouse gas emissions from exposed
Delta soils.

(c) Scientific studies and assessments that support the projects
authorized under this section.

begin insert 79755. end insert   

Funding authorized by this chapter for the purpose of
subdivision (b) of Section 79751 shall reduce the risk of levee
failure and flood in the Delta and may be expended for any of the
following:

(a) Local assistance under the Delta levee maintenance
subventions program under Part 9 (commencing with Section
12980) of Division 6, as that part may be amended.

(b) Special flood protection projects under Chapter 2
(commencing with Section 12310) of Part 4.8 of Division 6, as
that chapter may be amended.

(c) Levee improvement projects that increase the resiliency of
levees within the Delta to withstand earthquake, flooding, or sea
level rise.

(d) Emergency response and repair projects.

 

Chapter   begin insert 9. end insert Water Storage for Climate Change

 

begin insert 79760. end insert   

(a) Notwithstanding Section 162, the commission may
make the determinations, findings, and recommendations required
of it by this chapter independent of the views of the director. All
final actions by the commission in implementing this chapter shall
be taken by a majority of the members of the commission at a
public meeting noticed and held pursuant to the Bagley-Keene
Open Meeting Act (Article 9 (commencing with Section 11120) of
Chapter 1 of Part 1 of Division 3 of Title 2 of the Government
Code).

(b) Notwithstanding Section 13340 of the Government Code,
the sum of one billion five hundred million dollars ($1,500,000,000)
is hereby continuously appropriated from the fund, without regard
to fiscal years, to the commission for public benefits associated
with water storage projects that improve the operation of the state
water system, are cost effective, and provide a net improvement
in ecosystem and water quality conditions, in accordance with this
chapter. Funds authorized for, or made available to, the
commission pursuant to this chapter shall be available and
expended only for the purposes provided in this chapter, and shall
not be subject to appropriation or transfer by the Legislature or
the Governor for any other purpose.

(c) Projects shall be selected by the commission through a
competitive public process that ranks potential projects based on
the expected return for public investment as measured by the
magnitude of the public benefits provided, pursuant to criteria
established under this chapter.

(d) Any project constructed with funds provided by this chapter
shall be subject to Section 11590.

begin insert 79761. end insert   

In order to expand the state’s water storage capacity
to address the impacts of climate change on the snow pack in the
Sierra Nevada Mountains and water storage resources, the
purposes of this chapter are to:

(a) Construct new surface water storage projects.

(b) Restore and expand groundwater aquifer storage capacity.

(c) Restore water storage capacity of existing surface water
storage reservoirs.

begin insert 79762. end insert   

Projects for which the public benefits are eligible for
funding under this chapter consist of only the following:

(a) Surface storage projects identified in the CALFED Bay-Delta
Program, except for projects prohibited by Chapter 1.4
(commencing with Section 5093.50) of Division 5 of the Public
Resources Code.

(b) Groundwater storage projects and groundwater
contamination prevention or remediation projects that provide
water storage benefits.

(c) Conjunctive use and reservoir reoperation projects.

(d) Local and regional surface storage projects that improve
the operation of water systems in the state and provide public
benefits.

(e) Projects that remove sediment, improve dam stability in
seismic events or otherwise restore water storage capacity in
existing water storage reservoirs.

begin insert 79763. end insert   

A project shall not be funded pursuant to this chapter
unless it provides measurable improvements to the Delta ecosystem
or to the tributaries to the Delta.

begin insert 79764. end insert   

(a) Funds allocated pursuant to this chapter may be
expended solely for the following public benefits associated with
water storage projects:

(1) Ecosystem improvements, including changing the timing of
water diversions, improvement in flow conditions, temperature,
or other benefits that contribute to restoration of aquatic
ecosystems and native fish and wildlife, including those ecosystems
and fish and wildlife in the Delta.

(2) Water quality improvements in the Delta, or in other river
systems, that provide significant public trust resources, or that
clean up and restore groundwater resources.

(3) Flood control benefits, including, but not limited to,
increases in flood reservation space in existing reservoirs by
exchange for existing or increased water storage capacity in
response to the effects of changing hydrology and decreasing snow
pack on California’s water and flood management system.

(4) Emergency response, including, but not limited to, securing
emergency water supplies and flows for dilution and salinity
repulsion following a natural disaster or act of terrorism.

(5) Recreational purposes, including, but not limited to, those
recreational pursuits generally associated with the outdoors.

(b) Funds shall not be expended pursuant to this chapter for
the costs of environmental mitigation measures or compliance
obligations except for those associated with providing public
benefits as described in subdivision (a).

begin insert 79765. end insert   

In consultation with the Department of Fish and Game,
the State Water Resources Control Board, and the department,
the commission shall develop and adopt, by regulation, methods
for quantification and management of public benefits described
in Section 79764 by December 15, 2014. The regulations shall
include the priorities and relative environmental value of ecosystem
benefits as provided by the Department of Fish and Game and the
priorities and relative environmental value of water quality benefits
as provided by the State Water Resources Control Board.

begin insert 79766. end insert   

(a) Except as provided in subdivision (c), no funds
allocated pursuant to this chapter may be allocated for a project
before December 15, 2014, and until the commission approves the
project based on the commission’s determination that all of the
following have occurred:

(1) The commission has adopted the regulations specified in
Section 79765 and specifically quantified and made public the cost
of the public benefits associated with the project.

(2) The department has entered into a contract with each party
that will derive benefits, other than public benefits, as defined in
Section 79764, from the project that ensures the party will pay its
share of the total costs of the project. The benefits available to a
party shall be consistent with that party’s share of total project
costs.

(3) The department has entered into a contract with each public
agency identified in Section 79765 that administers the public
benefits, after that agency makes a finding that the public benefits
of the project for which that agency is responsible meet all the
requirements of this chapter, to ensure that the public contribution
of funds pursuant to this chapter achieves the public benefits
identified for the project.

(4) The commission has held a public hearing for the purposes
of providing an opportunity for the public to review and comment
on the information required to be prepared pursuant to this
subdivision.

(5) All of the following additional conditions are met:

(A) Feasibility studies have been completed.

(B) The commission has found and determined that the project
is feasible, is consistent with all applicable laws and regulations,
and will advance the long-term objectives of restoring ecological
health and improving water management for beneficial uses of the
Delta.

(C) All environmental documentation associated with the project
has been completed, and all other federal, state, and local
approvals, certifications, and agreements required to be completed
have been obtained.

(b) The commission shall submit to the Legislature its findings
for each of the criteria identified in subdivision (a) for a project
funded pursuant to this chapter.

(c) Notwithstanding subdivision (a), funds may be made
available under this chapter for the completion of environmental
documentation and permitting of a project.

begin insert 79767. end insert   

(a) The public benefit cost share of a project funded
pursuant to this chapter, other than a project described in
subdivision (c) of Section 79762, may not exceed 50 percent of the
total costs of any project funded under this chapter.

(b) No project may be funded unless it provides ecosystem
improvements as described in paragraph (1) of subdivision (a) of
Section 79764 that are at least 50 percent of total public benefits
of the project funded under this chapter.

(c) In order to receive funding authorized by this chapter to
improve groundwater storage in an aquifer, the applicant shall
demonstrate that a public agency has authority to manage the
water resources in that aquifer.

begin insert 79768. end insert   

(a) A project is not eligible for funding under this
chapter unless, by January 1, 2018, all of the following conditions
are met:

(1) All feasibility studies are complete and draft environmental
documentation is available for public review.

(2) The commission makes a finding that the project is feasible,
and will advance the long-term objectives of restoring ecological
health and improving water management for beneficial uses of the
Delta.

(3) The director receives commitments for not less than 75
percent of the nonpublic benefit cost share of the project.

(b) If compliance with subdivision (a) is delayed by litigation
or failure to promulgate regulations, the date in subdivision (a)
shall be extended by the commission for a time period that is equal
to the time period of the delay, and funding under this chapter that
has been dedicated to the project shall be encumbered until the
time at which the litigation is completed or the regulations have
been promulgated.

 

Chapter   begin insert 10. end insert Fiscal Provisions

 

begin insert 79800. end insert   

(a) Bonds in the total amount of six billion five hundred
million dollars ($6,500,000,000), or so much thereof as is
necessary, not including the amount of any refunding bonds issued
in accordance with Section 79812, or so much thereof as is
necessary, may be issued and sold to provide a fund to be used for
carrying out the purposes expressed in this division and to
reimburse the General Obligation Bond Expense Revolving Fund
pursuant to Section 16724.5 of the Government Code. The bonds,
when sold, shall be and constitute a valid and binding obligation
of the State of California, and the full faith and credit of the State
of California is hereby pledged for the punctual payment of both
principal of, and interest on, the bonds as the principal and interest
become due and payable.

(b) The Treasurer shall sell the bonds authorized by the
committee pursuant to this section. The bonds shall be sold upon
the terms and conditions specified in a resolution to be adopted
by the committee pursuant to Section 16731 of the Government
Code.

begin insert 79801. end insert   

The bonds authorized by this division shall be prepared,
executed, issued, sold, paid, and redeemed as provided in the State
General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code), and all of the provisions of that law apply to the bonds and
to this division and are hereby incorporated in this division as
though set forth in full in this division, except Section 16727 of the
Government Code shall not apply to the extent that it is inconsistent
with any other provision of this division.

begin insert 79802. end insert   

(a) Solely for the purpose of authorizing the issuance
and sale pursuant to the State General Obligation Bond Law
(Chapter 4 (commencing with Section 16720) of Part 3 of Division
4 of Title 2 of the Government Code) of the bonds authorized by
this division, the Climate Change Response for Clean and Safe
Drinking Water Finance Committee is hereby created. For
purposes of this division, the Climate Change Response for Clean
and Safe Drinking Water Finance Committee is “the committee”
as that term is used in the State General Obligation Bond Law.

(b) The committee consists of the Director of Finance, the
Treasurer, the Controller, the Director of Water Resources, and
the Secretary of the Natural Resources Agency. Notwithstanding
any other provision of law, any member may designate a deputy
to act as that member in his or her place for all purposes, as though
the member were personally present.

(c) The Treasurer shall serve as chairperson of the committee.

(d) A majority of the committee may act for the committee.

begin insert 79803. end insert   

The committee shall determine whether or not it is
necessary or desirable to issue bonds authorized pursuant to this
division in order to carry out the actions specified in this division
and, if so, the amount of bonds to be issued and sold. Successive
issues of bonds may be authorized and sold to carry out those
actions progressively, and it is not necessary that all of the bonds
authorized to be issued be sold at any one time.

begin insert 79804. end insert   

For purposes of the State General Obligation Bond
Law, “board,” as defined in Section 16722 of the Government
Code, means the Department of Water Resources.

begin insert 79805. end insert   

There shall be collected each year and in the same
manner and at the same time as other state revenue is collected,
in addition to the ordinary revenues of the state, a sum in an
amount required to pay the principal of, and interest on, the bonds
each year. It is the duty of all officers charged by law with any
duty in regard to the collection of the revenue to do and perform
each and every act that is necessary to collect that additional sum.

begin insert 79806. end insert   

Notwithstanding Section 13340 of the Government
Code, there is hereby appropriated from the General Fund in the
State Treasury, for the purposes of this division, an amount that
will equal the total of the following:

(a) The sum annually necessary to pay the principal of, and
interest on, bonds issued and sold pursuant to this division, as the
principal and interest become due and payable.

(b) The sum that is necessary to carry out the provisions of
Section 79809, appropriated without regard to fiscal years.

begin insert 79807. end insert   

The board may request the Pooled Money Investment
Board to make a loan from the Pooled Money Investment Account
in accordance with Section 16312 of the Government Code for the
purpose of carrying out this division. The amount of the request
shall not exceed the amount of the unsold bonds that the committee
has, by resolution, authorized to be sold for the purpose of carrying
out this division. The board shall execute those documents required
by the Pooled Money Investment Board to obtain and repay the
loan. Any amounts loaned shall be deposited in the fund to be
allocated in accordance with this division.

begin insert 79808. end insert   

Notwithstanding any other provision of this division,
or of the State General Obligation Bond Law, if the Treasurer
sells bonds that include a bond counsel opinion to the effect that
the interest on the bonds is excluded from gross income for federal
tax purposes under designated conditions, the Treasurer may
maintain separate accounts for the bond proceeds invested and
for the investment earnings on those proceeds, and may use or
direct the use of those proceeds or earnings to pay any rebate,
penalty, or other payment required under federal law or take any
other action with respect to the investment and use of those bond
proceeds, as may be required or desirable under federal law in
order to maintain the tax-exempt status of those bonds and to
obtain any other advantage under federal law on behalf of the
funds of this state.

begin insert 79809. end insert   

For the purposes of carrying out this division, the
Director of Finance may authorize the withdrawal from the
General Fund of an amount or amounts not to exceed the amount
of the unsold bonds that have been authorized by the committee
to be sold for the purpose of carrying out this division. Any
amounts withdrawn shall be deposited in the fund. Any money
made available under this section shall be returned to the General
Fund, with interest at the rate earned by the money in the Pooled
Money Investment Account, from proceeds received from the sale
of bonds for the purpose of carrying out this division.

begin insert 79810. end insert   

All money deposited in the fund that is derived from
premiums and accrued interest on bonds sold pursuant to this
division shall be reserved in the fund and shall be available for
transfer to the General Fund as a credit to expenditures for bond
interest.

begin insert 79811. end insert   

Pursuant to Chapter 4 (commencing with Section
16720) of Part 3 of Division 4 of Title 2 of the Government Code,
the cost of bond issuance shall be paid out of the bond proceeds.
These costs shall be shared proportionately by each program
funded through this division.

begin insert 79812. end insert   

The bonds issued and sold pursuant to this division
may be refunded in accordance with Article 6 (commencing with
Section 16780) of Chapter 4 of Part 3 of Division 4 of Title 2 of
the Government Code, which is a part of the State General
Obligation Bond Law. Approval by the electors of the state for the
issuance of the bonds under this division shall include approval
of the issuance of any bonds issued to refund any bonds originally
issued under this division or any previously issued refunding bonds.

begin insert 79813. end insert   

The proceeds from the sale of bonds authorized by this
division are not “proceeds of taxes” as that term is used in Article
XIII B of the California Constitution, and the disbursement of these
proceeds is not subject to the limitations imposed by that article.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 2 of Chapter 3 of the Seventh Extraordinary
Session of the Statutes of 2009, as amended by Section 1 of Chapter
74 of the Statutes of 2012, is repealed. end insert

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

Section 2 of this act shall be submitted to the voters at
the November 4, 2014, statewide general election in accordance
with provisions of the Government Code and the Elections Code
governing the submission of a statewide measure to the voters.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 2 of this act shall take effect upon the approval
by the voters of the end insert begin insert Climate Change Response end insert begin insert for Clean and Safe
Drinking Water Act of 2014, as set forth in that section at the
November 4, 2014, statewide general election. end insert

begin delete

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) A bond measure for $11.14 billion to fund projects related
to water supply reliability, water quality, Sacramento-San Joaquin
Delta sustainability, watershed conservation and protection, and
water recycling is currently set for the November 4, 2014, statewide
general election.

(b) The freshwater resources of California are limited and if the
state is to remain economically competitive and environmentally
rich, public investment is needed to modernize water infrastructure,
integrated water management, advance water resource protection,
and improve flood management.

(c) Many Californians lack access to clean, safe, and affordable
drinking water. In some communities, economic conditions prevent
the community from generating sufficient funding to correct water
system deficiencies or source water quality.

(d) The watersheds and aquatic ecosystems of California are
unique and irreplaceable environmental and economic resources,
including the Sacramento-San Joaquin Delta, the largest estuary
on the West Coast. Investments in the state’s watersheds can
provide regional and statewide benefits for cities, farms, industries,
and wildlife, including protecting water quality and sustainability,
improving flood control, and providing habitat and recreation.

(e) It is in the public interest to pass a general obligation bond
that includes, but is not limited to, grants and loans to state and
local agencies to help meet critical funding needs related to
improving water infrastructure, integrating water management,
protecting water resources, addressing flood management,
advancing water reuse, ensuring safe drinking water, and restoring
and protecting watersheds and aquatic ecosystems, including the
Sacramento-San Joaquin Delta.

(f) In order to evaluate and prioritize the amount of state funding
necessary to meet essential water-related public priorities, the
Legislature requires additional information.

SEC. 2.  

(a) The Natural Resources Agency shall provide an
analysis to the Legislature by July 1, 2014, that assesses currently
available public funding and estimates the additional level of public
investment needed to ensure California meets priority needs related
to infrastructure, integrated water management, water supply
reliability, water recycling, flood management, and watershed and
aquatic ecosystem conservation and protection.

(b) The State Water Resources Control Board and the Division
of Drinking Water and Environmental Management of the State
Department of Public Health shall provide an analysis to the
Legislature by July 1, 2014, that assesses currently available public
funding and estimates the additional level of public investment
needed to ensure that all Californians have access to safe drinking
water and prioritize the projects necessary to achieve this goal.

(c) The Delta Stewardship Council shall provide an analysis to
the Legislature by July 1, 2014, that assesses currently available
public funding and estimates the additional level of public
investment needed to implement the Delta Plan.

(d) The requirements for submitting reports under this section
are inoperative on July 1, 2018, pursuant to Section 10231.5 of
the Government Code, and the reports shall be submitted in
compliance with Section 9795 of the Government Code.

end delete