BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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          |SENATE RULES COMMITTEE            |                       AB 1739|
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                                    THIRD READING


          Bill No:  AB 1739
          Author:   Dickinson (D), et al.
          Amended:  8/7/14 in Senate
          Vote:     21

           
           SENATE NATURAL RESOURCES AND WATER COMMITTEE  :  7-1, 6/24/14
          AYES:  Pavley, Evans, Hueso, Jackson, Lara, Monning, Wolk
          NOES:  Cannella
          NO VOTE RECORDED:  Fuller

           SENATE APPROPRIATIONS COMMITTEE  :  5-0, 8/14/14
          AYES:  De León, Hill, Lara, Padilla, Steinberg
          NO VOTE RECORDED:  Walters, Gaines

           ASSEMBLY FLOOR  :  48-24, 5/28/14 - See last page for vote


           SUBJECT  :    Groundwater management

           SOURCE  :     Author


           DIGEST  :    This bill enacts the Sustainable Groundwater  
          Management Act, which establishes procedures and guidelines for  
          the management of groundwater in California.

           ANALYSIS  :    Existing law allows certain existing local agencies  
          to develop groundwater management plans (Water Code Section  
          10750 et seq.), which are commonly referred to as AB 3030  
          (Costa, Chapter 947, Statutes of 1997) plans.  These plans must  
          be developed with public hearings and only if less than half of  
          the landowners in the proposed district do not protest the  
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          development of the plan.  

          This bill:

          1. Creates the Sustainable Groundwater Management Act, which  
             requires that all high- or medium-priority groundwater basins  
             be managed under a groundwater sustainability plan (GSP) or  
             coordinated GSP, except if the basin is a specified  
             adjudicated area.  The GSPs will be developed by Groundwater  
             Sustainability Agencies (GSAs), which can be a local agency  
             or combination of local agencies that jointly elect to be a  
             GSA through a joint powers agreement or a memorandum of  
             agreement. 

          2. Requires the Department of Water Resources (DWR) to review  
             the GSP after adoption and then at least every five years  
             thereafter for compliance and achievement of sustainability  
             goals.  If no adequate plan is developed or if the GSP is not  
             being properly implemented, DWR and the State Water Resources  
             Control Board (SWRCB) will be authorized to designate a basin  
             as a probationary basin.  Such a designation will trigger a  
             process by which a GSA will first be given an opportunity to  
             remedy the deficiency.  If this does not occur, the SWRCB  
             will be authorized to develop an interim plan for the  
             probationary basin, which will remain in effect until any  
             deficiencies are resolved.

          3. Requires a planning agency to refer to either an adopted GSP  
             or an interim plan adopted by the SWRCB before a general plan  
             is substantially amended.  A GSA will also be required to  
             provide planning agencies with specific information.

          4. Specifies the following responsibilities for the GSAs, DWR,  
             and SWRCB:

             A.    GSAs will be:

                         Required to notify DWR of its creation and  
                   intent to undertake sustainable groundwater management  
                   by January 1, 2017.


                         Required to consider the interests of all  
                   beneficial uses and users of groundwater.

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                         Required to maintain a list of persons  
                   interested in receiving notices regarding plan  
                   preparation, meeting announcements, availability of  
                   draft plans, and other relevant documents.


                         Authorized to conduct various investigations for  
                   the purpose of managing the groundwater basin.  This  
                   bill establishes civil penalties that may be imposed by  
                   the GSA for extractions in excess of authorized  
                   amounts.


                         Authorized to require metering of groundwater  
                   extractions and to control groundwater extractions.


                         Required to develop a GSP, if the basin is a  
                   high or medium priority basin that includes specified  
                   information and aims to achieve a sustainability goal  
                   in the basin within 20 years of the implementation of  
                   the plan.  Extensions may be granted in two five-year  
                   increments beyond the 20-year sustainability timeframe  
                   upon showing of good cause, as determined by DWR.  The  
                   GSA must submit the GSP to DWR for review after  
                   adoption.  The GSP must be adopted by January 1, 2020.


                         Required to report annually to DWR specified  
                   information after the GSP is adopted, including, among  
                   other things, the groundwater basin elevation,  
                   aggregated extraction in the past year, and surface  
                   water used for groundwater recharge.


                         Allowed to submit an alternative GSP if that  
                   alternative meets specified requirements.


                         Required to periodically evaluate its GSP.



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                         Required to hold a public hearing before  
                   adopting or amending a GSP.

                         Allowed to impose a fee on groundwater  
                   extraction or other regulated activity to fund the  
                   costs associated with the GSP.  This bill establishes a  
                   procedure to allow for fee collection by the GSA.


             B.    The DWR will be:


                       Required to consider modifying groundwater basin  
                  boundaries upon request of a local agency.  DWR may  
                  require the local agency to provide the information  
                  necessary to justify changing the basin boundaries.  The  
                  California Water Commission (Commission) will be  
                  required to hear and comment on any draft boundary  
                  revisions.


                       Required to categorize each groundwater basin as a  
                  high, medium, low, or very low priority by January 1,  
                  2017.  DWR will be required to reassess the  
                  categorizations with every update of the California  
                  Water Plan (Bulletin 118).  This bill establishes the  
                  criteria that will inform the categorization.


                       Required to develop best management practices  
                  (BMPs) for the sustainable management of groundwater by  
                  January 1, 2017.  The BMPs must be developed with at  
                  least three public meetings throughout the state and one  
                  at a public meeting of the Commission.


                       Required to provide technical assistance to  
                  groundwater extractors to promote water conservation. 


                       Allowed to provide technical assistance to a GSA  
                  upon request.



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                       Required to periodically review GSPs, at least  
                  every five years, for compliance with required elements  
                  and whether the GSP is likely to achieve the  
                  sustainability goal for the basin.  The first review  
                  must occur within two years of its submission by a GSA.  
                  DWR may recommend correction actions to address any  
                  deficiencies it identifies.


                       DWR will be required to develop, in consultation  
                  with the SWRCB, guidelines for evaluating GSPs and  
                  implementations of GSPs.  The development of the  
                  guidelines will be exempt from the Administrative  
                  Procedures Act, but will need to be accomplished in a  
                  public process.


                       Required to post on its Internet Web site adopted  
                  GSPs and provide 60 days for the public to submit  
                  comments to DWR regarding the plan. 

                       Authorized to determine, in consultation with the  
                  SWRCB, that a GSP is inadequate or is being  
                  insufficiently implemented.


             C.    The SWRCB will be:


                       Authorized to use the Water Rights Fund to fund  
                  its costs associated with the SWRCB's oversight and  
                  enforcement responsibilities in groundwater.


                       Required to adopt a schedule of fees to recover  
                  costs associated with its oversight and enforcement  
                  responsibilities.  The fees will be required to be set  
                  in an amount sufficient to cover all costs incurred and  
                  expended from the Water Rights Fund, though the costs  
                  will be able to be recovered over a period of years  
                  rather than immediately in the year in which the costs  
                  were incurred. 



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                       Allowed to designate a basin as a probationary  
                  basin if certain conditions are met, such as DWR has  
                  determined that no GSA is formed by January 1, 2017, or  
                  no adequate GSP or alternative has been developed by  
                  January 1, 2020, and the SWRCB finds that the basin is  
                  in a state of long-term overdraft. 


                       Allowed to develop an interim plan for a  
                  probationary basin if a GSA has failed to remedy the  
                  deficiency with their GSP or implementation of their  
                  GSP.  The interim plan will be required to be developed  
                  with a public hearing and will be required to contain  
                  specified information.


                       Allowed to rescind the interim plan if it, in  
                  consultation with DWR, determines that the GSP or  
                  alternative has been made adequate. 

                       Be allowed to issue a cease and desist order for  
                  violations of any interim plan it develops.

           Background 
           
          California is the last state without an enforceable set of  
          statewide groundwater management standards.  While some of  
          California's groundwater basins are sustainably managed, many  
          are not.

          A number of different entities may manage some aspect of  
          groundwater in California.  These include:

            Special Districts  .  Many types of special districts have some  
            groundwater related authorities under the water code and other  
            statutes.  Such districts include county water districts,  
            municipal utility districts, community service districts, and  
            water replenishment districts.


            Special Act Districts  .  The Legislature has created a number  
            of special districts whose specific purpose is to manage one  
            groundwater basin or another.  These include agencies such as  
            the Orange County Water District and Fox Canyon Groundwater  

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            Management Agency.


            Court Appointed Watermasters  .  In an adjudication, the court  
            determines who has rights to pump from the groundwater basin,  
            how much they can pump, etc.  The court also typically  
            appoints someone to be the "Watermaster" whose job is to  
            ensure that the basin is managed in accordance with the  
            court's decree.

            Cities and Counties .  The courts have held that cities and  
            counties, under their general police powers, have the  
            authority to enact ordinances regarding groundwater.  More  
            than 20 counties have done so, generally addressing issues  
            such as banning transfers of groundwater out of the county.   
            Counties also issue drilling permits for water wells.

          The powers to manage groundwater vary.  In most special act  
          districts, the authorizing act allows the agency to require  
          groundwater users to report their extractions to the agency, who  
          can then levy fees for groundwater management or water supply  
          replenishment.  Some acts also provide the special district the  
          authority to limit exports and extractions.

          For most non-special act districts, the authority to manage  
          groundwater derives from what is commonly referred to as AB 3030  
          (Water Code Section 10750 et seq.).  AB 3030 allows, but does  
          not require, certain defined existing local agencies to develop  
          groundwater management plans in defined groundwater basins and  
          subbasins.

          An AB 3030 plan can be developed only after a public hearing and  
          adoption of a resolution of intention to adopt a groundwater  
          management plan.  If landowners representing more than 50% of  
          the assessed value of lands within the proposed district do not  
          protest the plan, the plan can be adopted within 35 days.  If  
          landowners representing a majority of the assessed value in the  
          proposed district oppose the plan, cannot be adopted and no new  
          plan may be attempted for one year.

          AB 3030 plans cannot be adopted in adjudicated basins or in  
          basins where groundwater is managed under other sections of the  
          Water Code without the permission of the court or the other  
          agency.

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          Once the plan is adopted, rules and regulations must be adopted  
          to implement the program called for in the plan.  Many plans  
          that have been adopted are relatively simple and in some cases  
          are a means of defining boundaries.

          There are 149 adopted AB 3030 plans.

          If a local agency wishes to receive state funds administered by  
          DWR for groundwater projects or for other projects that directly  
          affect groundwater levels or quality, the local agency must have  
          an AB 3030 plan or equivalent groundwater management plan meets  
          specific requirements.  These requirements are sometimes known  
          as "SB 1938 [Machado, Chapter 603, Statutes of 2002]  
          requirements."  

          This January, the Governor released his final California Water  
          Action Plan (CWAP).  Among the many initiatives in the CWAP is a  
          call to improve sustainable groundwater management:

             Groundwater is a critical buffer to the impacts of  
             prolonged dry periods and climate change on our water  
             system.  The administration will work with the Legislature  
             to ensure that local and regional agencies have the  
             incentives, tools, authority and guidance to develop and  
             enforce local and regional management plans that protect  
             groundwater elevations, quality, and surface  
             water-groundwater interactions.  The administration will  
             take steps, including sponsoring legislation, if necessary,  
             to define local and regional responsibilities and to give  
             local and regional agencies the authority to manage  
             groundwater sustainably and ensure no groundwater basin is  
             in danger of being permanently damaged by over drafting.   
             When a basin is at risk of permanent damage, and local and  
             regional entities have not made sufficient progress to  
             correct the problem, the state should protect the basin and  
             its users until an adequate local program is in place.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes


          According to the Senate Appropriations Committee:


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           No additional state costs for fiscal year (FY) 2014-15 through  
            FY 2018-19 to the DWR for initial activities. 


           Annual costs $3.5 to $4 million from the General Fund  
            beginning in FY 2017-18 to DWR to review plans and to provide  
            ongoing technical support.


           Annual costs of $260,000 to $390,000 from the Water Rights  
            Funds (special) for FY 2014-15 through FY 2016-17 to the SWRCB  
            for initial activities.


           Annual costs of $325,000 to $600,000 from the General Fund  
            beginning in FY 2017-18 to the SWRCB for review of GSPs.

           Unknown annual costs, estimated to be approximately $1.5 M,  
            from the Water Rights Fund (special) to the SWRCB for  
            enforcement actions beginning in FY 2017-18.  These costs  
            would be at least partially offset by fees.

           SUPPORT  :   (Verified  8/16/14)

          Agua Caliente Band of Cahuilla Indians
          Association of California Water Agencies 
          California Groundwater Council 
          California Tribal Business Alliance
          California Trout  
          California Water Foundation 
          California Waterfowl Association
          Center for Biological Diversity 
          Clean Water Action 
          Community Alliance with Family Farmers
          Community Water Center 
          Groundwater Resources Association of California 
          Inland Empire Utilities Agency
          Irvine Ranch Water District 
          Klamath Forest Alliance 
          Klamath Riverkeeper 
          Leadership Council for Justice and Accountability 
          Orange County Water District 
          Pala Band of Mission Indians

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          Paskenta Band of Nomlaki Indians
          Planning and Conservation League 
          Sierra Club California 
          The Nature Conservancy 
          Trout Unlimited 
          Union of Concerned Scientists
          United States Department of Defense, Regional Environmental 
          Upper San Gabriel Valley Municipal Water District  
          Viejas Band of Kumeyaay Indians

           OPPOSITION  :    (Verified  8/16/14)

          African American Farmers of California
          Agricultural Council of California
          Allied Grape Growers
          Almond Hullers & Processors Association
          Association of California Egg Farmers
          Blue Diamond Growers
          California Agricultural Aircraft Association
          California Ammonia Company
          California Association of Nurseries and Garden Centers
          California Bean Shippers Association
          California Blueberry Association
          California Canning Peach Association
          California Cattlemen's Association
          California Chamber of Commerce
          California Citrus Mutual
          California Cotton Ginners Association
          California Cotton Growers Association
          California Dairies, Inc.
          California Farm Bureau Federation
          California Fresh Fruit Association
          California Grain & Feed
          California Groundwater Association
          California League of Food Processors
          California Pear Growers Association
          California Seed Association
          California State Association of Counties 
          California State Floral Association
          California Tomato Growers Association
          California Warehouse Association
          California Women for Agriculture
          Campos Brothers Farms
          Coachella Valley Water Agency

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          Dairy Farmers of America-Western Area
          Del Monte Foods
          Desert Water Agency
          Family Business Association
          Family Winemakers
          Fruit Growers Supply Company
          Grower-Shipper Association of Central California
          Grower-Shipper Association of Santa Barbara and San Luis Obispo  
          Counties
          Kern County
          Land O' Lakes
          Nisei Farmers League
          Pacific Coast Producers
          Raisin Bargaining Association
          Rural County Representatives of California 
          Stockton East Water District
          San Joaquin County
          Sun-Maid Growers of California
          Sunsweet Growers Inc.
          Western Agricultural Processors Association
          Western Growers Association
          Western Plant Health Association
          Zone 7 Water Agency

           ARGUMENTS IN SUPPORT  :    According to the California Water  
          Foundation (CWF), "AB 1739 addresses one of California's most  
          pressing water management issues - the need for improved and  
          sustainable groundwater management.  The current drought and its  
          immediate impacts to the state's groundwater resources compel us  
          to search for solutions now so we are better prepared for  
          further droughts.  Improved groundwater management will protect  
          critical water supplies and provide ecosystem and economic  
          benefits to the mid- and long-term.

          "A new statewide policy for sustainable groundwater management  
          is urgently needed, and AB 1739 is an important piece of this  
          discussion.  Numerous stakeholders have been involved and are  
          continuing to toward together on this legislation and ? SB 1168  
          [Pavley].  CWF is working with both authors to help ensure that  
          these bills provide the right provisions to empower local  
          groundwater management agencies with new tools and authorities,  
          and to create an appropriate state 'backstop' that will allow  
          the state to intervene, only when needed, to ensure groundwater  
          management goals are met."

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           ARGUMENTS IN OPPOSITION  :    According to the California Farm  
          Bureau Federation, "We are concerned the current process is  
          rushed to meet arbitrary deadlines without adequate time to  
          address such a complex issue.  This measure will have huge  
          long-term economic impacts on farms, the State and local  
          economies and county tax roles, with a very real potential to  
          devalue land and impact farms and businesses viability and in  
          turn impact jobs.  We believe groundwater must be managed  
          locally/regionally and that overlying property rights are  
          protected to avoid a taking.  Without addressing these issues  
          with stakeholder input, this measure will certainly create a  
          significant fiscal impact to the state when many are forced to  
          defend their overlying property rights through adjudication.
                                                  
          "Overall, Farm Bureau believes we do not have a groundwater  
          problem solely from a lack of regulation, but from a failure to  
          update our water capture and delivery system to today's  
          conditions.  Any legislation that creates a new groundwater  
          management regime must be coupled with real, substantive actions  
          to increase surface water supplies and restore water supply  
          reliability.  The complexities of groundwater, groundwater  
          management and interactions with surface water are too great to  
          rush to judgment and to an isolated solution.  We are not  
          suggesting the status quo, nor are we suggesting do nothing, but  
          we do recommend a carefully thought through process to develop  
          appropriate protections of our groundwater resources for future  
          generations.  For these reasons we are actively engaged with  
          others to develop a path forward, but we must oppose AB 1739."


           ASSEMBLY FLOOR  :  48-24, 5/28/14
          AYES:  Alejo, Ammiano, Bloom, Bocanegra, Bonilla, Bonta,  
            Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,  
            Chesbro, Cooley, Daly, Dickinson, Fong, Garcia, Gatto, Gomez,  
            Gonzalez, Gordon, Roger Hernández, Jones-Sawyer, Levine,  
            Lowenthal, Medina, Mullin, Muratsuchi, Nazarian, Pan, Perea,  
            John A. Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber,  
            Wieckowski, Williams, Yamada, Atkins
          NOES:  Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Fox,  
            Beth Gaines, Gorell, Grove, Hagman, Harkey, Jones, Linder,  
            Logue, Maienschein, Mansoor, Melendez, Nestande, Olsen,  
            Patterson, Wagner, Waldron, Wilk

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          NO VOTE RECORDED:  Achadjian, Dababneh, Eggman, Frazier, Gray,  
            Hall, Holden, Vacancy


          RM:d  8/17/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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