BILL ANALYSIS Ó
SB 620
Page 1
Date of Hearing: August 21, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 620 (Wright) - As Amended: July 3, 2013
Policy Committee: Water, Parks and Wildlife Vote: 14-1
Local Government 9-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill amends existing law authorizing the creation of water
replenishment districts. Specifically, this bill:
1)Creates a seven-member budget advisory committee (BAC) for
purposes of reviewing replenishment assessments and a
district's annual operating budget.
2)Defers, until the 2019-20 fiscal year, an existing requirement
that the Water Replenishment District of Southern California
(WRD) spend 80% of its $10 million reserve on water purchases.
3)Increases the penalties from $150 to $1,000 for failing to
register or report the water from a facility, or knowingly
failing to file other required reports or statements to the
WRD.
4)Directs the court to provide attorney's fees and costs to the
prevailing party in any litigation to enjoin a water-producer
from pumping within the WRD.
FISCAL EFFECT
This bill is a state mandated program. However, no
reimbursement is required because the sponsor of the legislation
is the entity subject to the mandate.
COMMENTS
1)Purpose. The author states no other local agency has a
statutory limitation on its annual reserve fund and that much
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has changed since such a limit was recommended in 1999. The
author notes the basic structure of the district's expenses
has changed from purchasing imported water to producing its
own recycled water for recharge and other costs have increased
such as groundwater monitoring, laboratory testing and
litigation. The author also states that WRD's existing
statutory penalty fee of $150 is not sufficient to provide the
proper incentive for a groundwater producer to timely pay the
replenishment assessment or to file specified reports and
statements.
Supporters, including the City of Gardena and the Association
of California Water Agencies, point to the importance of
protecting the stability of the groundwater supply for over
10% of our state's population and contend this bill will
ensure the agency is able to adhere to sound financing
practices to perform its groundwater management function and
meet state mandates. Those supporters state the current 80%
water purchase requirement hinders the flexibility of the
unrestricted reserve fund and limits WRD's ability to adapt as
necessary to fulfill its important obligations.
2)Opposition . Including the Cities of Huntington Park and
Montebello state this bill declares WRD the victor in any
assessment disputes, was introduced to maneuver around court
rulings, and will impose attorney fees provisions designed to
intimidate those who would dare challenge the legality of
WRD's fees. Opponents maintain communities overlying the
Central Basin have complained for many years about WRD's
overcharges and the Los Angeles Superior Court has ruled twice
in pending litigation that WRD's replenishment assessments are
illegal as a result of WRD's failure to comply with the
mandates of Proposition 218.
Opponents state, rather than take actions to protect
ratepayers from these excessive and illegal fees, this bill
proposes to lift fiscal restrictions that were put in place
over a decade ago, give WRD unfettered discretion, and impose
draconian increases in potential fines and penalties.
Opponents also state this bill does not provide adequate time
for the BAC to provide any meaningful review or comments on
the proposed budget.
3)Background . Existing law authorizes the creation of water
replenishment districts. Only one district, WRD, has been
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created under these statutes. Existing law is a mix, with
some sections applying to all districts and other sections
applying to WRD only. The WRD was established by voters in
Los Angeles County in 1959 during a period when the Los
Angeles County Superior Court was adjudicating groundwater
rights in the Central Basin and West Coast Basin aquifers.
The main function of WRD is to recharge water into groundwater
basins for later withdrawal by water purveyors. WRD earns
revenue by charging water replenishment assessments to the
agencies, utilities and companies that pump groundwater. WRD
also gets property tax revenues from its share of the 1%
property tax rate. Funds are used to buy surface water that
then percolates into the groundwater basin.
4)Prior audit . In December of 1999, the Bureau of State Audits
(BSA) issued a report that discussed the weak policies and
poor planning by WRD which BSA noted had led to excessive
water rates and questionable expenses. The report made 13
specific recommendations ranging from reducing WRD's reserve
fund from $35.9 million to $10 million and reassessing WRD's
need for 10 legislative and public advocacy firms.
5)Previous legislation. SB 1386 (Lowenthal), Chapter 215,
Statutes of 2012, eliminated the authority of the Central
Basin Municipal Water District to manage groundwater, thereby
confirming WRD's authority.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081