BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 103
                                                                  Page  1


          (  Without Reference to File  )

          SENATE THIRD READING
          SB 103 (Budget and Fiscal Review Committee)
          As Amended  February 25, 2014
          Majority vote.  Budget Bill Appropriation Takes Effect  
          Immediately 

           SENATE VOTE  :Vote not relevant  
           
          Original Committee Reference:   BUDGET  

           SUMMARY  :  Amends the 2013-14 Budget Act to include new  
          appropriations to address the state's urgent drought needs.   
          This bill, along with the companion trailer bill, SB 104,  
          proposes $687.4 million expenditures for drought related  
          activities.  

           The Senate amendments  delete the Assembly version of this bill,  
          and instead:

          1)Accelerate the appropriation of $77 million (Proposition 84,  
            1E funds and reimbursements) to the Department of Water  
            Resources (DWR) for Central Valley, multi-benefit flood  
            projects, including water supply, water storage, water quality  
            improvements and ecosystem benefits.

          2)Appropriate $15 million (General Fund) to the Department of  
            Public Health (DPH) for emergency drinking water assistance  
            for drought-impacted areas.  Eligible projects include,  
            alternate water supplies, improvements to existing water  
            systems to prevent contamination or provide other sources of  
            safe drinking water, and establishing connections to an  
            adjacent water system.  These funds are to be used after all  
            eligible federal funds made available for the drought are  
            utilized.

          3)Provide expenditure authority of $25.3 million (General Fund)  
            to the Department of Social Services (DSS) for food assistance  
            programs for persons affected by the drought.  Specifies that  
            these funds be structured to maximize the potential federal  
            drought assistance.

          4)Allocate $11 million (federal funds) to the Department of  








                                                                  SB 103
                                                                  Page  2


            Housing and Community Development (HCD) for rental assistance  
            related to the drought.

          5)Appropriate $4 million (State Water Pollution Cleanup and  
            Abatement Account) to the State Water Resources Control Board  
            (SWRCB) to secure emergency drinking water supplies for  
            disadvantaged communities with contaminated drinking water  
            supplies, including needs exacerbated by drought.  Specify  
            that these funds be available for expenditure until June 30,  
            2017.

          6)Accelerate the appropriation of $7 million (State Water  
            Pollution Control Revolving Fund Small Community Grant Fund)  
            to SWRCB for grants to small and severely disadvantaged  
            communities to comply with water quality regulations, protect  
            surface and groundwater quality, and reduce threats to public  
            health and safety. Specify that these funds be available for  
            expenditure until June 30, 2015.

          7)Appropriate $2.5 million (General Fund) to SWRCB for extra  
            costs associated with and caused by the drought in the Water  
            Rights Program such as extra surveillance and monitoring of  
            water diversions, predictive modeling to identify priority  
            locations, and potentially implementing water curtailments and  
            taking enforcement actions. 

          8)Allocate $2 million (General Fund) to the Employment Training  
            Panel in the Employment Development Department for job  
            training related to drought related job losses. 

          9)Direct $1.8 million (General Fund) to the Office of Emergency  
            Services (OES) for disaster recovery assistance to  
            communities.

          10)Appropriate $30 million, Greenhouse Gas Reduction Fund  
            (GGRF), to DWR for local water use efficiency programs which  
            reduce GHG emissions.  Of this amount, $20 million is for  
            local assistance and $10 million is to be used for state water  
            efficiency projects.  Require that funding for GHG emission  
            reduction programs be subject to a 30-day Joint Legislative  
            Budget Committee (JLBC) notification prior to expenditure.   
            Specify that the notification must include a description of  
            proposed expenditures, how it will further the regulatory  
            purposes of AB 32 (Núñez), Chapter 488, Statutes of 2006, the  








                                                                  SB 103
                                                                  Page  3


            Global Warming Solutions Act of 2006, how it will achieve  
            specified GHG emission reductions, and how the agency will  
            document expenditure results.  

          11)Allocate $10 million (GGRF) to the California Department of  
            Food and Agriculture (CDFA) for agricultural water efficiency  
            projects that reduce greenhouse gas emissions.  Specify that  
            funding will be subject to legislative notification prior to  
            expenditure.

          12)Accelerate the appropriation of $1.2 million (Waste Discharge  
            Permit Fund) to SWRCB for groundwater quality monitoring  
            (Groundwater Ambient Monitoring and Assessment Program).

          13)Appropriate $800,000 (General Fund) to SWRCB to accelerate  
            implementation of a proposal to protect and ensure the  
            sustainability of groundwater resources in critically  
            overdrafted basins.

          14)Appropriate $1 million (General Fund) to DWR for groundwater  
            monitoring and reporting efforts, including a new  
            well-completion report submission system.

          15)Allow an existing $1 million (General Fund) appropriation to  
            DWR for flood emergency response to be used for the Save Our  
            Water Campaign to expand drought-related education and  
            outreach.

          16)Direct $2.3 million (General Fund) to the Department of Fish  
            and Wildlife for urgent fish, stream, and conservation  
            activities related to the extreme drought conditions.  

          17)Appropriate $13 million (General Fund) to the California  
            Conservation Corp (CCC) for water conservation and drought  
            response projects, water efficiency education and outreach  
            activities, and local assistance grants to certified community  
            conservation corps.  Specify that, to the extent feasible, the  
            CCC and the local conservation corps shall employ veterans and  
            unemployed young adults in the corps member teams to construct  
            and implement these projects.  

          18)Specify that this legislation is contingent on the enactment  
            of SB 104.









                                                                  SB 103
                                                                  Page  4


          19)Contain an appropriation allowing this bill to take effect  
            immediately upon enactment.

           COMMENTS  :  California is experiencing its worst drought in  
          modern history.  The purpose of this urgency drought relief  
          package is to provide immediate funding to help communities deal  
          with the devastating dry conditions affecting the state and to  
          increase local water supplies.

          This bill accelerates many proposals in the Governor's Budget  
          that begin implementing the Administration's Water Action Plan  
          (WAP) aimed at improving the state's water supply and storage  
          through infrastructure investments, improving the management of  
          groundwater, and addressing water quality issues, particularly  
          in disadvantaged communities.  This bill also includes emergency  
          funding for drinking water supplies for disadvantaged  
          communities, food assistance, job training, conservation  
          education and outreach activities, and urgent fish and stream  
          needs related to the drought.  This bill has four main  
          components:

          1)Infrastructure Investments to Improve Water Supply.   The bill  
            accelerates the appropriation of $77 million to DWR for  
            Central Valley flood protection projects, through the  
            FloodSAFE Program, that provide additional public benefits,  
            including water supply and water quality improvements.  The  
            FloodSAFE Program is a long-term strategic initiative  
            developed to reduce flood risk in California.  Additionally,  
            the funds will be used to improve flood emergency response  
            throughout California, including response and recovery time  
            from a catastrophic levee failure event in the Delta, and  
            support statewide flood management planning.  The Budget also  
            proposes to continue various existing flood control projects  
            and feasibility studies, including the Folsom Dam  
            Modifications Project.

          2)Emergency Drinking Water, Water Supply and Water Quality.  The  
            bill also accelerates funding for clean drinking water for  
            poor and disadvantaged communities.  There are state and  
            federal clean drinking water funds available to spend to  
            provide clean drinking water for hard hit communities like  
            farmworker communities in the Central Valley.  This bill  
            appropriates those funds and consolidates their deployment  
            under the SWRCB.  








                                                                  SB 103
                                                                  Page  5



          3)Water and Energy Efficiency for Urban and Agricultural  
            Communities.  The bill appropriates $30 million from  
            cap-and-trade auction revenue to DWR for programs that provide  
            a reduction of GHG emissions and also deliver state and local  
            water use efficiency.  Of this amount, $20 million is directed  
            to local assistance for water/energy efficiency upgrades in  
            residential, commercial, and institutional sectors.  Projects  
            could include installation of water saving devices, low-flow  
            toilets and showerheads, and water capture and water  
            recycling/reuse systems.  The remaining $10 million will be  
            used for efficiency upgrades at two State Water Project (SWP)  
            facilities at the Hyatt and Thermalito power generation sites  
            near Oroville.  

            The bill also allocates $10 million from cap-and-trade auction  
            revenue to CDFA for agricultural water efficiency projects  
            that reduce greenhouse gas emissions.  This new program will  
            be based on the Air Resources Board's successful Carl Moyer  
            Program and invest in water irrigation treatment and  
            distribution systems that reduce water and energy use, augment  
            supply, and increase water and energy efficiency in  
            agricultural applications.  Incentives will be ranked and  
            distributed based on financial need, immediacy of water  
            supply, increased and efficiency gained to address water  
            shortages, and reduction in water pumping or treatment that  
            uses energy causing greenhouse gas emissions.

            Of the $40 million in cap-and-trade revenue proposed, $20  
            million is an acceleration of the Governor's Budget.  The  
            other $20 million is in addition to the $850 million proposed  
            in the Governor's AB 32 Expenditure Plan.  

          4)Sustainable Groundwater Management.  Groundwater basins are  
            the state's largest reservoir, 10 times the size of all its  
            surface reservoirs combined.  In an average year, groundwater  
            provides 30% of California's water supply and much more in dry  
            periods.  Eighty percent of Californians rely, at least in  
            part, on groundwater for their drinking water, and some cities  
            and rural areas rely entirely on groundwater.  When managed  
            sustainably, groundwater can provide a crucial buffer against  
            drought.  In some areas of the state, regional and local  
            agencies manage groundwater well.  In other areas, groundwater  
            overdraft is causing subsidence, permanent reductions in  








                                                                  SB 103
                                                                  Page  6


            underground storage capacity, seawater intrusion and other  
            water quality problems, and environmental damage.  This  
            legislation requires better monitoring and management of  
            groundwater resources by providing funding to support the  
            continued implementation of the Statewide Groundwater  
            Elevation Monitoring Program, to protect the sustainability of  
            groundwater resources in critically overdrafted basins and  
            improving monitoring and reporting efforts. 

            This bill is an important first step in addressing urgent  
            needs brought on by the extreme drought.  It contains  
            important funding for emergency drinking water to  
            disadvantaged communities in immediate need of water supplies.  
              

            Further, conditioning the cap-and-trade appropriations on a  
            30-day notice to the Legislature has merit.  It would allow  
            the Legislature to more fully vet these proposals along with  
            other cap-and-trade proposals to ensure a consistent approach.


           Analysis Prepared by  :    Gabrielle Meindl / BUDGET / (916)  
          319-2099


                                                                 FN:  
                                                                 0003048