Senate Bill No. 927

Introduced by Senators Cannella and Vidak

January 29, 2014

An act to amend Sections 79700, 79702, 79716, 79720, 79720.1, 79720.4, 79721, 79722, 79732, 79744, 79745, 79747, 79749.5, 79770, and 79810 of, to amend the heading of Division 26.7 (commencing with Section 79700) of, to repeal Sections 79720.6 and 79824 of, and to repeal Chapter 9 (commencing with 79750) of Division 26.7 of, the Water Code, relating to the Safe, Clean, and Reliable Drinking Water Supply Act of 2014, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 927, as introduced, Cannella. Safe, Clean, and Reliable Drinking Water Supply Act of 2014.

Existing law creates the Safe, Clean, and Reliable Drinking Water Supply Act of 2012, which, if approved by the voters, would authorize the issuance of bonds in the amount of $11,140,000,000 pursuant to the State General Obligation Bond Law to finance a safe drinking water and water supply reliability program. The bond act, among other things, makes specified amounts available for projects relating to drought relief, water supply reliability, ecosystem and watershed protection and restoration, and emergency and urgent actions that ensure safe drinking water supplies are available in disadvantaged communities and economically distressed areas. Existing law provides for the submission of the bond act to the voters at the November 4, 2014, statewide general election.

This bill would rename the bond act as the Safe, Clean, and Reliable Drinking Water Supply Act of 2014 and make conforming changes. The bill would instead authorize the issuance of bonds in the amount of $9,217,000,000 by reducing the amount available for projects related to drought relief and water supply reliability, as specified. The bill would remove the authorization for funds to be available for ecosystem and watershed protection and restoration projects, and would increase the amount of funds available for emergency and urgent actions to ensure safe drinking water supplies in disadvantaged communities and economically distressed areas.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The heading of Division 26.7 (commencing with
Section 79700) of the Water Code, as amended by Section 1 of
Chapter 126 of the Statutes of 2010, is amended to read:

 

Division 26.7.  THE SAFE, CLEAN, AND RELIABLE
DRINKING WATER SUPPLY ACT OF begin delete 2012 end delete begin insert 2014 end insert

 

SEC. 2.  

Section 79700 of the Water Code, as amended by
Section 2 of Chapter 126 of the Statutes of 2010, is amended to
read:

79700.  

This division shall be known, and may be cited, as the
Safe, Clean, and Reliable Drinking Water Supply Act of begin delete 2012 end delete
begin insert 2014 end insert .

SEC. 3.  

Section 79702 of the Water Code, as amended by
Section 3 of Chapter 126 of the Statutes of 2010, is amended to
read:

79702.  

Unless the context otherwise requires, the definitions
set forth in this section govern the construction of this division, as
follows:

(a) “Bay Delta Conservation Plan” means the final plan prepared
pursuant to the planning agreement regarding the Bay Delta
Conservation Plan, dated October 6, 2006.

(b) “Bay-Delta Estuary” means the Delta, Suisun Bay, and
Suisun Marsh.

(c) “CALFED Bay-Delta Program” means the program
described in the Record of Decision dated August 28, 2000.

(d) “Commission” means the California Water Commission.

(e) “Committee” means the Safe, Clean, and Reliable Drinking
Water Supply Finance Committee created by Section 79812.

(f) “Delta” means the Sacramento-San Joaquin Delta, as defined
in Section 12220.

(g) “Delta conveyance facilities” means facilities that convey
water directly from the Sacramento River to the State Water Project
or the federal Central Valley Project pumping facilities in the south
Delta.

(h) “Delta counties” means the Counties of Solano, Yolo,
Sacramento, Contra Costa, and San Joaquin.

(i) “Delta Plan” has the meaning set forth in Section 85059.

(j) “Department” means the Department of Water Resources.

(k) “Director” means the Director of Water Resources.

(l) “Disadvantaged community” has the meaning set forth in
subdivision (a) of Section 79505.5.

(m) “Economically distressed area” means a municipality with
a population of 20,000 persons or less, a rural county, or a
reasonably isolated and divisible segment of a larger municipality
where the segment of the population is 20,000 persons or less,
with an annual median household income that is less than 85
percent of the statewide median household income, and with one
or more of the following conditions as determined by the
department:

(1) Financial hardship.

(2) Unemployment rate at least 2 percent higher than the
statewide average.

(3) Low population density.

(n)  “Fund” means the Safe, Clean, and Reliable Drinking Water
Supply Fund of begin delete 2012 end delete begin insert 2014 end insert created by Section 79716.

(o) “Integrated regional water management plan” has the
meaning set forth in Section 10534.

(p) “Nonprofit organization” means an organization qualified
to do business in California and qualified under Section 501(c)(3)
of Title 26 of the United States Code.

(q) “Public agency” means a state agency or department, district,
joint powers authority, city, county, city and county, or other
political subdivision of the state.

(r) “Secretary” means the Secretary of the Natural Resources
Agency.

(s) “State General Obligation Bond Law” means the State
General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code).

SEC. 4.  

Section 79716 of the Water Code, as amended by
Section 4 of Chapter 126 of the Statutes of 2010, is amended to
read:

79716.  

The proceeds of bonds issued and sold pursuant to this
division shall be deposited in the Safe, Clean, and Reliable
Drinking Water Supply Fund of begin delete 2012 end delete begin insert 2014 end insert , which is hereby created
in the State Treasury.

SEC. 5.  

Section 79720 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is amended to read:

79720.  

The sum of begin delete four hundred fifty-five million dollars
($455,000,000) end delete begin insert three hundred twenty-seven million dollars
($327,000,000) end insert shall be available, upon appropriation by the
Legislature from the fund, for the purposes of this chapter.

SEC. 6.  

Section 79720.1 of the Water Code, as added by
Section 1 of Chapter 3 of the Seventh Extraordinary Session of
the Statutes of 2009, is amended to read:

79720.1.  

(a) From the funds described in Section 79720, begin delete one
hundred ninety million dollars ($190,000,000) end delete begin insert ninety million
dollars ($90,000,000) end insert shall be available, upon appropriation by
the Legislature from the fund, for the planning, design, and
construction of local and regional drought relief projects that reduce
the impacts of drought conditions, including, but not limited to,
the impacts of reductions in Delta diversions. Eligible projects
include all of the following:

(1) Water conservation and efficiency projects, including
installation of the most water efficient fixtures commercially
available.

(2) Water recycling and related infrastructure.

(3) Groundwater cleanup.

(4) Local and regional conveyance projects that improve water
supplies and public benefits associated with conveyance facilities.

(5) Other local and regional water supply reliability projects.

(6) Local and regional surface water storage projects that provide
emergency water supplies and water supply reliability in drought
conditions.

(b) Projects funded pursuant to this section shall meet both of
the following requirements:

(1) The project will provide a sustainable water supply that does
not contribute to groundwater overdraft or increase surface water
diversions.

(2) The project is capable of being operational within two years
of receiving the grant.

(c) Preference shall be given to applicants that can demonstrate
substantial past and current investments in conservation and local
water projects.

(d) Not more than 10 percent of the funds provided pursuant to
this section shall be available for planning, investigations, studies,
and monitoring.

(e) The department shall require a cost share of not less than 50
percent of total project costs from nonstate sources. The department
may waive or reduce the cost-sharing requirement for projects that
directly benefit disadvantaged communities or economically
distressed areas.

begin delete

(f) From the funds described in this section, the sum of one
hundred million dollars ($100,000,000) shall be made available
for local and regional water projects, including surface storage
projects, that provide emergency water supplies and water supply
reliability in drought conditions in San Diego County.

end delete

SEC. 7.  

Section 79720.4 of the Water Code, as added by
Section 1 of Chapter 3 of the Seventh Extraordinary Session of
the Statutes of 2009, is amended to read:

79720.4.  

begin delete (a) end delete begin delete   end delete From the funds described in Section 79720, begin delete eighty
million dollars ($80,000,000) end delete begin insert seventy-two million dollars
($72,000,000) end insert shall be available for deposit into the Safe Drinking
Water State Revolving Fund created pursuant to Section 116760.30
of the Health and Safety Code.

begin delete

(b) From the funds described in this section, up to eight million
dollars ($8,000,000) shall be made available for grants for projects
within the City of Maywood that design and implement water
supply infrastructure upgrades that provide for safe drinking water.

end delete

SEC. 8.  

Section 79720.6 of the Water Code, as added by
Section 1 of Chapter 3 of the Seventh Extraordinary Session of
the Statutes of 2009, is repealed.

begin delete

79720.6.  

From the funds described in Section 79720, the sum
of twenty million dollars ($20,000,000) shall be available for water
quality and public health projects on the New River.

end delete

SEC. 9.  

Section 79721 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is amended to read:

79721.  

The sum of begin delete one billion fifty million dollars
($1,050,000,000) end delete begin insert one billion forty million dollars ($1,040,000,000) end insert
shall be available, upon appropriation by the Legislature, from the
fund to the department for competitive grants and expenditures in
accordance with Section 79722.

SEC. 10.  

Section 79722 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is amended to read:

79722.  

(a) Except as provided in subdivision (f), the
department shall award grants to eligible projects that implement
an adopted integrated regional water management plan.

(b) An urban water supplier that does not prepare, adopt, and
submit its urban water management plan in accordance with the
Urban Water Management Planning Act (Part 2.6 (commencing
with Section 10610) of Division 6) is ineligible to receive funds
made available pursuant to Section 79721 until the urban water
management plan is prepared and submitted in accordance with
the requirements of that act.

(c) For the purposes of awarding a grant under this chapter, the
department shall require a local cost share of not less than 50
percent of the total costs of the project. The department may waive
or reduce the cost-sharing requirement for projects that directly
benefit a disadvantaged community or an economically distressed
area.

(d) Eligible projects are those included in adopted integrated
regional water management plans consistent with Part 2.2
(commencing with Section 10530) of Division 6, including, but
not limited to, local and regional surface water storage projects.

(e) The funding provided in Section 79721 shall be allocated
to each hydrologic region as identified in the California Water
Plan in accordance with this subdivision. For the South Coast
hydrologic region, the department shall establish three funding
areas that reflect the watersheds of San Diego County (designated
as the San Diego subregion), the Santa Ana River watershed and
southern Orange County (designated as the Santa Ana subregion),
and the Los Angeles and Ventura County watersheds (designated
as the Los Angeles subregion), and shall allocate funds to those
areas in accordance with this subdivision. The North and South
Lahontan hydrologic regions shall be treated as one area for the
purpose of allocating funds. For purposes of this subdivision, the
Sacramento River hydrologic region does not include the Delta.
For purposes of this subdivision, the Mountain Counties Overlay
is not eligible for funds from the Sacramento River hydrologic
region or the San Joaquin River hydrologic region. The department
may recognize multiple integrated regional water management
plans in each of the areas allocated funding. Funds made available
by this chapter shall be allocated as follows:

(1) North Coast: $45,000,000.

(2) San Francisco Bay: $132,000,000.

(3) Central Coast: $58,000,000.

(4) Los Angeles subregion: $198,000,000.

(5) Santa Ana subregion: $128,000,000.

(6) San Diego subregion: $87,000,000.

(7) Sacramento River: $76,000,000.

(8) San Joaquin River: $64,000,000.

(9) Tulare/Kern: $70,000,000.

(10) North/South Lahontan: $51,000,000.

(11) Colorado River Basin: $47,000,000.

(12) Mountain Counties Overlay: $44,000,000.

(13) Interregional: begin delete $50,000,000 end delete begin insert $40,000,000 end insert .

(f) Interregional funds may be expended directly or granted by
the department to address multiregional needs or state priorities,
including, but not limited to, any of the following:

(1) Investing in new water technology development and
deployment.

(2) Meeting state water recycling and water conservation goals.

(3) Adapting to climate change impacts.

(4) Reducing contributions to climate change.

(5) Other projects to improve statewide water management
systems.

(6) Other projects and activities designed to meet the needs of
disadvantaged communities or economically distressed areas
including technical and grant writing assistance.

begin delete

(g) Ten million dollars of the interregional funds shall be
available for a grant to the University of California, Sierra Nevada
Research Institute of the University of California, for the
development and deployment of measurement infrastructure and
related information technology to identify and analyze water supply
impacts of climate change on the Sierra Nevada snow pack and
runoff.

end delete

SEC. 11.  

Section 79732 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is amended to read:

79732.  

(a) A project that receives funding pursuant to
subdivision (a) of Section 79731 shall only be eligible for funding
pursuant to other provisions of this division to the extent that the
combined state funding pursuant to this division does not exceed
50 percent of the total project costs.

(b) The department shall determine what begin delete consitututes end delete begin insert constitutes end insert
a project for the purposes of subdivision (a).

SEC. 12.  

Section 79744 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is amended to read:

79744.  

In consultation with the Department of Fish and begin delete Game end delete
begin insert Wildlife end insert , the State Water Resources Control Board, and the
department, the commission shall develop and adopt, by regulation,
methods for quantification and management of public benefits
described in Section 79743 by December 15, begin delete 2012 end delete begin insert 2014 end insert . The
regulations shall include the priorities and relative environmental
value of ecosystem benefits as provided by the Department of Fish
and begin delete Game end delete begin insert Wildlife end insert and the priorities and relative environmental
value of water quality benefits as provided by the State Water
Resources Control Board.

SEC. 13.  

Section 79745 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is amended to read:

79745.  

(a) Except as provided in subdivision (c) begin delete , no end delete funds
allocated pursuant to this chapter begin delete may end delete begin insert shall not end insert be allocated for a
project before December 15, begin delete 2012, end delete begin insert 2015, end insert and until the commission
approves the project based on the commission’s determination that
all of the following have occurred:

(1) The commission has adopted the regulations specified in
Section 79744 and specifically quantified and made public the cost
of the public benefits associated with the project.

(2) The department has entered into a contract with each party
that will derive benefits, other than public benefits, as defined in
Section 79743, from the project that ensures the party will pay its
share of the total costs of the project. The benefits available to a
party shall be consistent with that party’s share of total project
costs.

(3) The department has entered into a contract with each public
agency identified in Section 79744 that administers the public
benefits, after that agency makes a finding that the public benefits
of the project for which that agency is responsible meet all the
requirements of this chapter, to ensure that the public contribution
of funds pursuant to this chapter achieves the public benefits
identified for the project.

(4) The commission has held a public hearing for the purposes
of providing an opportunity for the public to review and comment
on the information required to be prepared pursuant to this
subdivision.

(5) All of the following additional conditions are met:

(A) Feasibility studies have been completed.

(B) The commission has found and determined that the project
is feasible, is consistent with all applicable laws and regulations,
and will advance the long-term objectives of restoring ecological
health and improving water management for beneficial uses of the
Delta.

(C) All environmental documentation associated with the project
has been completed, and all other federal, state, and local approvals,
certifications, and agreements required to be completed have been
obtained.

(b) The commission shall submit to the Legislature its findings
for each of the criteria identified in subdivision (a) for a project
funded pursuant to this chapter.

(c) Notwithstanding subdivision (a), funds may be made
available under this chapter for the completion of environmental
documentation and permitting of a project.

SEC. 14.  

Section 79747 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is amended to read:

79747.  

(a) A project is not eligible for funding under this
chapter unless, by January 1, begin delete 2018, end delete begin insert 2020, end insert all of the following
conditions are met:

(1) All feasibility studies are complete and draft environmental
documentation is available for public review.

(2) The commission makes a finding that the project is feasible,
and will advance the long-term objectives of restoring ecological
health and improving water management for beneficial uses of the
Delta.

(3) The director receives commitments for not less than 75
percent of the nonpublic benefit cost share of the project.

(b) If compliance with subdivision (a) is delayed by litigation
or failure to promulgate regulations, the date in subdivision (a)
shall be extended by the commission for a time period that is equal
to the time period of the delay, and funding under this chapter that
has been dedicated to the project shall be encumbered until the
time at which the litigation is completed or the regulations have
been promulgated.

SEC. 15.  

Section 79749.5 of the Water Code, as amended by
Section 6 of Chapter 126 of the Statutes of 2010, is amended to
read:

79749.5.  

(a) In approving the Safe, Clean, and Reliable
Drinking Water Supply Act of begin delete 2012 end delete begin insert 2014 end insert , the people were
informed and hereby declare that the provisions of this chapter are
necessary, integral, and essential to meeting the single object or
work of the Safe, Clean, and Reliable Drinking Water Supply Act
of begin delete 2012 end delete begin insert 2014 end insert . As such, any amendment of the provisions of this
chapter by the Legislature without voter approval would frustrate
the scheme and design that induced voter approval of this act. The
people therefore find and declare that any amendment of the
provisions of this chapter by the Legislature shall require a vote
of two-thirds of the membership in each house of the Legislature
and voter approval.

(b) This section shall not govern or be used as authority for
determining whether the amendment of any other provision of this
act not contained in this chapter would constitute a substantial
change in the scheme and design of this act requiring voter
approval.

SEC. 16.  

Chapter 9 (commencing with Section 79750) of
Division 26.7 of the Water Code, as added by Section 1 of Chapter
3 of the Seventh Extraordinary Session of the Statutes of 2009, is
repealed.

SEC. 17.  

Section 79770 of the Water Code, as amended by
Section 1 of Chapter 226 of the Statutes of 2010, is amended to
read:

79770.  

(a) The sum of one billion dollars ($1,000,000,000)
shall be available, upon appropriation by the Legislature from the
fund, for expenditures, grants, and loans for projects to prevent or
reduce the contamination of groundwater that serves as a source
of drinking water. Projects shall be consistent with an adopted
integrated regional water management plan. Funds appropriated
pursuant to this section shall be available to the State Department
of Public Health for projects necessary to protect public health by
preventing or reducing the contamination of groundwater that
serves as a major source of drinking water for a community.

(b) Projects shall be prioritized based upon the following criteria:

(1) The threat posed by groundwater contamination to the
affected community’s overall drinking water supplies, including
the need for treatment of alternative supplies if groundwater is not
available due to contamination.

(2) The potential for groundwater contamination to spread and
reduce drinking water supply and water storage for nearby
population areas.

(3) The potential of the project, if fully implemented, to enhance
local water supply reliability.

(4) The potential of the project to increase opportunities for
groundwater recharge and optimization of groundwater supplies.

(c) The State Department of Public Health shall give additional
consideration to projects that meet any of the following criteria:

(1) The project is implemented pursuant to a comprehensive
basinwide groundwater quality management and remediation plan
or is necessary to develop a comprehensive groundwater plan.

(2) Affected groundwater provides a local supply that, if
contaminated and not remediated, will require import of additional
water from outside the region.

(3) The project will serve an economically disadvantaged
community or an economically distressed area.

(4) The project addresses contamination at a site where the
responsible parties have not been identified or where the
responsible parties are unwilling or unable to pay for cleanup.

(d) Of the amount made available by this section, not less than
one hundred million dollars ($100,000,000) shall be available for
costs associated with projects, programs, or activities that meet
the requirements of this section and both of the following criteria:

(1) The costs are part of a basinwide management and
remediation plan for which federal funds have been allocated.

(2) The costs address contamination at a site on the list
maintained by the Department of Toxic Substances Control
pursuant to Section 25356 of the Health and Safety Code or a site
listed on the National Priorities List pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. Sec. 9601 et seq.).

(e) Of the amount made available by this section, begin delete one hundred
million dollars ($100,000,000) end delete begin insert four hundred million dollars
($400,000,000) end insert shall be available to the State Department of Public
begin delete Health end delete begin insert Health, or a successor agency, end insert for grants and direct
expenditures to finance emergency and urgent actions in
accordance with this section on behalf of disadvantaged
communities and economically distressed areas to ensure that safe
drinking water supplies are available to all Californians.

(f) The Legislature, by statute, shall establish both of the
following:

(1) Requirements for repayment of grant funds in the event of
cost recovery from parties responsible for the groundwater
contamination.

(2) Requirements for recipients of grants to make reasonable
efforts to recover costs from parties responsible for groundwater
contamination.

SEC. 18.  

Section 79810 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is amended to read:

79810.  

(a) Bonds in the total amount of begin delete eleven billion one
hundred forty million dollars ($11,140,000,000) end delete begin insert nine billion two
hundred seventeen million dollars ($9,217,000,000) end insert , not including
the amount of any refunding bonds issued in accordance with
Section 79822, or so much thereof as is necessary, may be issued
and sold to provide a fund to be used for carrying out the purposes
expressed in this division and to reimburse the General Obligation
Bond Expense Revolving Fund pursuant to Section 16724.5 of the
Government Code. The bonds, when sold, shall be and constitute
valid and binding obligations of the State of California, and the
full faith and credit of the State of California is hereby pledged
for the punctual payment of both the principal of, and interest on,
the bonds as the principal and interest become due and payable.

(b) The Treasurer shall sell the bonds authorized by the
committee pursuant to this section. The bonds shall be sold upon
the terms and conditions specified in a resolution to be adopted
by the committee pursuant to Section 16731 of the Government
Code.

SEC. 19.  

Section 79824 of the Water Code, as added by Section
1 of Chapter 3 of the Seventh Extraordinary Session of the Statutes
of 2009, is repealed.

begin delete

79824.  

Of the eleven billion one hundred forty million dollars
($11,140,000,000) in bonds authorized in this division, no more
than five billion five hundred seventy million dollars
($5,570,000,000) shall be sold by the Treasurer before July 1,
2015.

end delete

SEC. 20.  

The Secretary of State shall submit Sections 79700,
79702, 79716, 79720, 79720.1, 79720.4, 79721, 79722, 79732,
79744, 79745, 79747, 79749.5, 79770, and 79810 of, and the
heading of Division 26.7 (commencing with Section 79700) of,
the Water Code, as amended by this act, in place of those sections
and that heading, as added or amended by previous statutes, in
order they are voted upon as a part of the Safe, Clean, and Reliable
Drinking Water Act of 2014, at the November 4, 2014, statewide
general election. The Secretary of State shall not submit Sections
79720.6 and 79824 of, and Chapter 9 (Commencing with Section
79750) of Division 26.7 of, the Water Code, which are repealed
by this act.

SEC. 21.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to fund a safe, clean, and reliable water supply at the
earliest possible date, it is necessary that this act take effect
immediately.