BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 1739
          Author:   Dickinson (D), et al.
          Amended:  8/22/14 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 provides specific authority to a  
          groundwater sustainability agency (GSA), as defined in SB 1168  
          (Pavley, 2014), to impose certain fees.   This bill authorizes  
          the Department of Water Resources (DWR) or a GSA to provide  
          technical assistance to entities that extract or use groundwater  
          to promote water conservation and protect groundwater resources.  


           Senate Floor Amendments  of 8/22/14 clarify the relation between  
          cities/counties and groundwater agencies with respect to land  
                                                                CONTINUED





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          use planning, consideration of groundwater plans in local  
          planning, and consideration of local general plans in  
          groundwater planning.

           Senate Floor Amendments  of 8/18/14 (1) refine provisions of the  
          bill regarding state evaluation and intervention regarding  
          groundwater sustainability plans, (2) delete those parts of the  
          bill that will be solely in SB 1168 (which has similar  
          amendments), and (3) make chaptering of the bill contingent on  
          enactment of SB 1168.

           ANALYSIS  :    Existing law:

          1.Authorizes local agencies to adopt and implement a groundwater  
            management plan. Requires a groundwater management plan to  
            contain specified components and requires a local agency  
            seeking state funds administered by DWR for groundwater  
            projects or groundwater quality projects to do certain things,  
            including, but not limited to, preparing and implementing a  
            groundwater management plan that includes basin management  
            objectives for the groundwater basin.

          2.Establishes the Water Rights Fund (Fund), which consists of  
            various fees and penalties.  The monies in the Fund are  
            available, upon appropriation by the Legislature, for, among  
            other things, the administration of the State Water Resource  
            Control Board's (Board) water rights program.

          3.Requires, with certain exceptions, each person who diverts  
            water after December 31, 1965, to file with the Board a  
            prescribed statement of diversion and use. 

          4.Subjects a person to civil liability if that person fails to  
            file, as required, a diversion and use statement for a  
            diversion or use that occurs after January 1, 2009, tampers  
            with any measuring device, or makes a material misstatement in  
            connection with the filing of a diversion or use statement. 

          5.Provides that a person who violates a cease and desist order  
            of the Board may be liable in an amount not to exceed $1,000  
            for each day in which the violation occurs.  Revenue generated  
            from these penalties is deposited in the Fund.

          6.Authorizes the Board or the DWR to adopt emergency regulations  







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            providing for the filing of reports of water diversion or use  
            that are required to be filed.

          7.Requires the legislative body of each county and city to adopt  
            a comprehensive, long-term general plan for the physical  
            development of the county or city with specified elements,  
            including, among others, land use and conservation elements. 

          8.Requires a city or county, upon the adoption or revision of  
            its general plan, on or after January 1, 1996, to utilize as a  
            source document any urban water management plan submitted to  
            the city or county by a water agency.

          9.Requires a public water system to provide a planning agency  
            with certain information upon receiving notification of a  
            city's or a county's proposed action to adopt or substantially  
            amend a general plan.

          This bill:

           1. Provides specific authority to a GSA, as defined in SB 1168  
             (Pavley, of 2014), to impose certain fees. 

           2. Authorizes the DWR or a GSA to provide technical assistance  
             to entities that extract or use groundwater to promote water  
             conservation and protect groundwater resources. 

           3. Requires the DWR to prepare and publish a report by December  
             31, 2016, on its Internet Web site that presents the  
             department's best estimate, based on available information,  
             of water available for replenishment of groundwater in the  
             state.

           4. Requires the DWR, by January 1, 2017, to publish on its  
             Internet Web site best management practices for the  
             sustainable management of groundwater, and requires the DWR  
             to prepare and release a report by December 31, 2016, on the  
             DWR's best estimate of water available for replenishment of  
             groundwater in the state. 

           5. Requires a GSA to submit a groundwater sustainability plan  
             to the DWR for review upon adoption.  Requires the DWR to  
             periodically review groundwater sustainability plans, and by  
             June 1, 2016, and requires the DWR to adopt regulations for  







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             evaluating groundwater sustainability plans adopt regulations  
             for evaluating groundwater sustainability plans, the  
             implementation of groundwater sustainability plans, and  
             coordination agreements.  These regulations adopted shall  
             identify appropriate methodologies and assumptions for  
             baseline conditions concerning hydrology, water demand,  
             regulatory restrictions that affect the availability of  
             surface water, and unreliability of, or reductions in,  
             surface water deliveries to the agency or water users in the  
             basin, and the impact of those conditions on achieving  
             sustainability and shall include the historic average  
             reliability and deliveries of surface water to the agency or  
             water users in the basin..

           6. Requires the DWR to adopt the regulations, including any  
             amendments thereto, as emergency regulations in accordance  
             with the Administrative Procedure Act.  The adoption of these  
             regulations is an emergency and shall be considered by the  
             Office of Administrative Law as necessary for the immediate  
             preservation of the public peace, health and safety, or  
             general welfare.

           7. Authorizes a local agency to submit to the DWR for  
             evaluation and assessment an alternative that the local  
             agency believes satisfies the objectives of these provisions.  


           8. Requires the DWR to review any of the above-described  
             submissions at least every five years after initial  
             submission to the DWR. 

           9. Authorizes the DWR to conduct inspections to obtain an  
             inspection warrant. 

           10.Authorizes the Board to designate a basin as a probationary  
             basin, if the Board makes a certain determination. 

           11.Authorizes the Board to develop an interim plan for a  
             probationary basin if the Board, in consultation with the  
             DWR, determines that a local agency has not remedied a  
             deficiency that resulted in designating the basin as a  
             probationary basin within a certain timeframe.

           12.Authorizes the Board to adopt an interim plan for a  







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             probationary basin after notice and a public hearing and  
             requires state entities to comply with an interim plan. 

           13.Authorizes the Board to rescind all or a portion of an  
             interim plan if the Board determines at the request of  
             specified petitioners that a groundwater sustainability plan  
             or adjudication action is adequate to eliminate the condition  
             of long-term overdraft or condition where groundwater  
             extractions result in significant depletions of  
             interconnected surface waters. 

           14.Provides that the Board has authority to stay its  
             proceedings relating to an interim plan or to rescind or  
             amend an interim plan based on the progress made by a  
             groundwater sustainability agency or in an adjudication  
             action.

           15.Provides that the money in the Fund is available for  
             expenditure, upon appropriation by the Legislature, for the  
             purpose of Board enforcement.  Requires the Board to adopt a  
             schedule of fees in an amount sufficient to recover all costs  
             incurred and expended from the Fund by the Board.

           16.Authorizes the Board to issue a cease and desist order in  
             response to a violation or threatened violation of any  
             decision or order of the Board or any extraction restriction,  
             limitation, order, or regulation adopted or issued.

           17.Establishes groundwater reporting requirements for a person  
             extracting groundwater in an area within a basin that is not  
             within the management area of a groundwater sustainability  
             agency or a probationary basin.  Requires the reports to be  
             submitted to the Board or in certain areas, to an entity  
             designated as a local agency by the Board, as specified.   
             Requires each report to be accompanied by a specified fee. 

           18.Authorizes the Board or the DWR to adopt emergency  
             regulations providing for the filing of reports of water  
             extraction.
           
            19.Requires, prior to the adoption or any substantial amendment  
             of a general plan, the planning agency to review and consider  
             a groundwater sustainability plan, groundwater management  
             plan, groundwater management court order, judgment, or  







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             decree, adjudication of water rights, or a certain order or  
             interim plan by the Board. 

           20.Requires the planning agency to refer a proposed action to  
             adopt or substantially amend a general plan to any  
             groundwater sustainability agency that has adopted a  
             groundwater sustainability plan or local agency that  
             otherwise manages groundwater and to the Board if it has  
             adopted an interim plan that includes territory within the  
             planning area.

           21.Requires a groundwater sustainability agency or an entity  
             that submits an alternative to provide the planning agency  
             with certain information as is appropriate and relevant,  
             including a report on the anticipated effect of the proposed  
             action on implementation of a groundwater sustainability  
             plan.

           22.Provides that the provisions against superseding the land  
             use authority of cities and counties applies to that  
             authority within the overlying basin, including the city or  
             county general plan, and requires a groundwater  
             sustainability plan to take into account the most recent  
             planning assumptions stated in local general plans overlying  
             the basin.

           23.Requires, after January 31, 2020, the DWR, in consultation  
             with the Board, to determine that a groundwater  
             sustainability plan is inadequate or that the groundwater  
             sustainability program is not being implemented in a manner  
             that will likely achieve the sustainability goal.

           24.Provides that the basin, after January 31, 2022, be managed  
             under a groundwater sustainability plan or coordinated  
             groundwater sustainability plans if none of the following  
             have occurred:

             A.    A groundwater sustainability agency has adopted a  
                groundwater sustainability plan for the entire basin.

             B.    A collection of local agencies has adopted  
                groundwater sustainability plans that collectively  
                serve as a groundwater sustainability plan for the  
                entire basin.







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             C.    The DWR has approved an alternative, as specified. 

           25.Provides that the basin be managed, as specified, after  
             January 31, 2022, if both of the following have occurred:

             A.    The DWR, in consultation with the Board, determines  
                that a groundwater sustainability plan is inadequate or  
                that the groundwater sustainability plan is not being  
                implemented in a manner that will likely achieve the  
                sustainability goal.

             B.    The Board determines that the basin is in a  
                condition of long-term overdraft or in a condition  
                where groundwater extractions result in significant  
                depletions of interconnected surface waters.

           26.Revises the definition of "undesirable result," and  
             specifies that certain authority granted to a groundwater  
             sustainability agency to control groundwater extractions  
             shall be consistent with applicable elements of a city or  
             county general plan, except as specified.

           27.Provides that this bill is contingent on the enactment of SB  
             1168 (Pavley).

           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  







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            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  
            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  







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          basins where groundwater is managed under other sections of the  
          Water Code without the permission of the court or the other  
          agency.

          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








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          According to the Senate Appropriations Committee:


           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  8/25/14)

          Agua Caliente Band of Cahuilla Indians
          Association of California Water Agencies
          Barona Bank of Mission Indians
          Bay Area Council
          California Council of Geoscience Organizations
          California Groundwater Coalition
          California Groundwater Council 
          California Tribal Business Alliance
          California Trout
          California Water Foundation 
          California Waterfowl Association
          City of Los Angeles, Mayor's Office
          Community Alliance with Family Farmers
          East Bay Municipal Utility District
          EMAX Laboratories, Inc.
          Groundwater Resources Association of California







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          Horizon Environmental, Inc.
          Inland Empire Utilities Agency
          Inyo County
          Irvine Ranch Water District 
          Los Angeles Area Chamber of Commerce
          Los Angeles City Council
          Luhdorff & Scalmanini Consulting Engineers
          Mayor of Los Angeles
          Montclair Environmental Management, Inc.
          Orange County Water District
          Pala Band of Mission Indians
          Parker Groundwater
          Paskenta Band of Nomlaki Indians
          PRO Water Equity
          Quinn Environmental Strategies, Inc.
          Raymond Basin Management Board
          San Francisco Bay Regional Water Quality Control Board
          San Francisco Public Utilities Commission
          San Gabriel Valley Water Association
          Santa Clara Valley Water District
          Sierra Club California 
          Sullivan International Group, Inc.
          The Source Group, Inc.
          Todd Groundwater
          Trout Unlimited
          United States Department of Defense, Regional Environmental 
          Upper San Gabriel Valley Municipal Water District  
          Viejas Band of Kumeyaay Indians
          WILDCOAST

           OPPOSITION  :    (Verified  8/25/14)

          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







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          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 Floral Association
          California Tomato Growers Association
          California Warehouse Association
          California Women for Agriculture
          Campos Brothers Farms
          Dairy Farmers of America-Western Area
          Del Monte Foods
          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
          Northern California Water Association 
          Pacific Coast Producers
          Raisin Bargaining Association
          Sacramento Regional Water Authority 
          San Joaquin County
          Stockton East Water District
          Sun-Maid Growers of California
          Sunsweet Growers Inc.
          Valley Ag Water Coalition
          Western Agricultural Processors Association
          Western Growers Association
          Western Plant Health Association

           ARGUMENTS IN SUPPORT  :    According to the California Water  
          Foundation (CWF), "AB 1739 addresses one of California's most  







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          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."

           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  







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


          RM:d  9/09/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****