BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 104
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          (  Without Reference to File  )

          SENATE THIRD READING
          SB 104 (Budget and Fiscal Review Committee)
          As Amended  February 26, 2014
          Majority vote.  Budget Bill Appropriation Takes Effect  
          Immediately 

           SENATE VOTE  :Vote not relevant

          Original Committee Reference:   BUDGET  

           SUMMARY  :  Contains necessary statutory and technical changes to  
          implement SB 103 (Budget and Fiscal Review Committee), which  
          amends the 2013-14 Budget Act related to urgent drought relief.   
          This bill, along with SB 103, proposes $687.4 million in  
          expenditures for drought relief activities. 

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

          1)Accelerate the appropriation of $472.5 million (Proposition  
            84) to the Department of Water Resources (DWR) for the  
            remaining Integrated Regional Water Management (IRWM) grants.  
            Specify that $200 million of these funds be used for drought  
            preparedness/response projects.  Allow $21.8 million of  
            appropriated funds to be used for projects submitted prior to  
            the enactment of this legislation.

          2)Direct the Department of Public Health (DPH), by June 30,  
            2014, to adopt revised, emergency groundwater replenishment  
            regulations using recycled water. 

          3)Authorize the use of $10 million (Housing Rehabilitation Loan  
            Fund) by the Department of Housing and Community Development  
            (HCD) for housing or utility subsidies for people who become  
            un- or underemployed due to drought conditions.

          4)Provide HCD flexibility to maximize migrant housing units for  
            greater use, including extending the period of occupancy  
            beyond the standard 180-day period and redefining persons and  
            families eligible to occupy centers.

          5)Enhance the State Water Resources Control Board (SWRCB)  








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            drought response authority by streamlining authority to  
            enforce water rights laws and increasing penalty amounts for  
            illegally diverting water during drought conditions.

          6)Specify that this legislation is contingent on the enactment  
            of SB 103.

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

           COMMENTS :  This bill contains the statutory changes necessary to  
          implement SB 103, the urgent drought relief legislation.  It  
          contains three main components:

          1)Infrastructure Investments to Improve Water Supply.  This  
            legislation speeds up appropriation of funds for shovel ready  
            water supply projects.  The Governor's Water Action Plan in  
            the 2014-15 budget calls for new appropriations of funds for  
            projects that increase water supply reliability and address  
            the current drought.  Specifically, the bill accelerates IRWM,  
            Local Assistance funds, to support a third and final round of  
            the IRWM Implementation Grant Program and directs at least  
            $200 million of these funds be used for drought  
            preparedness/response projects.  

            The California Water Plan identified IRWM as one of the key  
            initiatives needed to address long-term water supply  
            reliability for the state.  The IRWM program provides  
            incentives to regionally integrate and leverage local  
            financial investment for water conservation efforts, habitat  
            protection for local species, water recycling, stormwater  
            capture, and desalination projects.  

          2)Housing Assistance.  The bill authorizes HCD to administer  
            rental vouchers to persons rendered homeless, or at risk of  
            becoming homeless, due to unemployment or other economic  
            hardship resulting from the drought.  Further, the bill  
            stipulates that HCD adopt guidelines establishing criteria for  
            the program, including income limits, and subsidy amounts.

          3)Enhanced State Water Resources Control Board Drought Response  
            Authority.  Under existing law, the SWRCB has authority to  
            develop emergency drought regulations in a critically dry year  
            following two dry years.  Because of how narrowly the existing  








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            statute was crafted, this authority is not available to the  
            SWRCB during this year, even though reservoir and drought  
            conditions are the worst on record.  The new authorities  
            provided by the legislation would be more flexible and allow  
            the SWRCB to invoke them in a critically dry year that follows  
            two below normal, dry, or critically dry years, or if the  
            Governor declares a drought emergency.  The same drought  
            definition is used in the streamlined water right enforcement  
            and enhanced water right drought penalties contained elsewhere  
            in the legislation.

            The bill expands current emergency drought rulemaking  
            authority for the SWRCB.  Currently, the Board can adopt  
            emergency regulations to prevent the waste, unreasonable use,  
            unreasonable method of use, or unreasonable method of  
            diversion or to promote conservation or water recycling.  The  
            legislation includes explicit authority for the SWRCB to issue  
            emergency regulations requiring curtailment of water  
            diversions when water is unavailable to satisfy a diverter's  
            priority of water right and requiring reporting to the SWRCB.   


            Any curtailment regulations would follow established  
            California water right laws concerning priority.  Those laws  
            generally mean that senior water rights must be satisfied  
            before junior water rights can divert anything.  The  
            legislation also allows the SWRCB to enforce its emergency  
            drought regulations through cease and desist orders, and also  
            authorizes local enforcement of the regulations as an  
            infraction, subject to a fine of up to $500 per day of  
            violation.

            The legislation establishes higher penalties for certain water  
            rights violations in times of drought.  Penalties for  
            illegally diverting water during a drought would rise from the  
            current amount of up to $500 per day.  During a drought, the  
            amounts would be up to $1,000 per day and up to $2,500 per  
            acre-foot of water illegally diverted or used.  Separately, if  
            the SWRCB has issued a cease and desist order to a person and  
            the person violates the cease and desist order, the person may  
            be subject to penalties of up to $1,000 per day.  During a  
            drought, the authorized penalty amount for violation of a  
            cease and desist order would rise up to $10,000 per day.  









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            The bill includes prudent changes to the Water Code designed  
            to enhance SWRCB's ability to respond to drought.  A key  
            aspect of drought response is ensuring the existing water  
            rights laws are followed.  To facilitate compliance, the  
            legislation includes streamlined authority to enforce water  
            rights laws and heightened penalty amounts for illegally  
            diverting water during drought conditions.  

            In addition, the drought response requires the ability to  
            effectively establish and enforce emergency drought  
            regulations.  The legislation builds on existing authority of  
            the SWRCB to adopt emergency drought regulations to promote  
            conservation and prevent waste and unreasonable use of water  
            during times of drought.


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


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