BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 957


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          Date of Hearing:  April 28, 2015


                  ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE


                                 Marc Levine, Chair


          AB 957  
          (Mathis) - As Amended March 26, 2015


          SUBJECT:  Water Quality, Supply, and Infrastructure Improvement  
          Act of 2014


          SUMMARY:  Amends the eligibility criteria for recycled water  
          projects that are funded by Proposition 1, The Water Quality,  
          Supply, and Infrastructure Improvement Act of 2014 (Prop. 1), in  
          order to give consideration to communities with groundwater  
          problems.  Specifically, this bill:  


          1)Makes findings related to the benefits recycled water projects  
            could provide for groundwater-dependent communities affected  
            by drought and lacking adequate safe, clean, and reliable  
            water supplies.


          2)Amends the meaning of "water supply reliability improvement"  
            in the Prop. 1 recycled water project eligibility criteria to  
            require consideration of whether the project is for a  
            community that is heavily dependent on groundwater from a  
            basin in overdraft.


          3)Amends the meaning of "public health benefits from improved  
            drinking water quality or supply" in the Prop. 1 recycled  








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            water project eligibility criteria to require consideration of  
            whether the project is for a community that has extended, or  
            is in the process of extending, its service delivery area to  
            individuals, communities, or both, reliant on either  
            contaminated groundwater or groundwater wells that have run  
            dry.


          4)Defines "contaminated groundwater" as groundwater that exceeds  
            a primary or secondary drinking water standard.


          EXISTING LAW:  


          1)Authorizes $7.545 billion in general obligation bond funding  
            for water-related projects and programs under Proposition 1.  

          2)Makes $725 million in Prop. 1 funding available, upon  
            appropriation by the Legislature, for grants or loans for  
            water recycling and advanced treatment technology projects,  
            including:



             a)   Water recycling projects that produce potable and  
               nonpotable water.

             b)   Contamination and salt removal projects including  
               groundwater and seawater desalination.



             c)   Pilot projects for potable reuse and other salt and  
               contaminant removal technology.



             d)   Multibenefit projects that improve water quality.








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             e)   Technical assistance and grant writing assistance for  
               disadvantaged communities.



          3)Requires, under Prop.1, at least a 50% local cost-share for  
            recycled water projects unless the area is economically  
            disadvantaged or distressed.

          4)Specifies that recycled water projects funded by Prop. 1 must  
            be selected on a competitive basis, considering all of the  
            following criteria:



             a)   Water supply reliability improvement. 

             b)   Water quality and ecosystem benefits related to  
               decreased reliance on diversions from the Delta or instream  
               flows.


              
             c)   Public health benefits from improved drinking water  
               quality or supply. 



             d)   Cost-effectiveness.



             e)   Energy efficiency and greenhouse gas emission impacts.











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             f)   Reasonable geographic allocation to eligible projects  
               throughout the state, including both northern and southern  
               California and coastal and inland regions. 



          5)Requires recycled water competitive programs implemented under  
            Prop. 1 to be consistent with the State Water Board's water  
            recycling and contaminant and salt removal programs.

          FISCAL EFFECT:  Unknown


          COMMENTS:  This bill modifies Prop. 1 eligibility criteria for  
          recycled water and contaminant and salt removal projects in  
          order to give heightened consideration to communities heavily  
          dependent on groundwater or communities who have, or are trying  
          to, extend service to communities with contaminated water or  
          whose wells are going dry


          1)Author's statement: The author states that this bill seeks to  
            maximize the beneficial use of scarce groundwater resources in  
            overdrafted basins by promoting and incentivizing the funding  
            of recycled water projects in those areas.  The author states  
            this bill adds additional factors to be considered when  
            awarding Prop. 1 water bond recycling funds and that this bill  
            will help provide communities with dry wells or contaminated  
            aquifers access to water supplies.  


          2)Proposition 1 was heavily negotiated.  In 2009, former  
            Governor Schwarzenegger convened the Legislature in  
            extraordinary session to take up issues related to protecting  
            and restoring the Delta ecosystem and improving water  
            reliability and management, including addressing water  
            conveyance, storage, conservation and groundwater and  
            considering a general obligation bond.  Subsequently, an  
            historic five-bill package of water legislation was passed and  








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            signed, including SB 2 (Cogdill), Chapter 3, Statutes of the  
            2009-10 Seventh Extraordinary Session (SB 2 X7).





            SB 2 X7 called for the Water Bond to be placed on the November  
            2010 ballot.  If approved by the voters, the Water Bond would  
            have authorized the issuance of $11.14 billion in general  
            obligation bonds for a wide range of projects and purposes  
            including water conservation and efficiency, groundwater  
            protection and cleanup, integrated regional water management,  
            ecosystem and watershed protection and restoration, water  
            recycling, and water storage.  

            However, in 2010, supporters of the Water Bond recognized that  
            a sluggish economy coupled with the state's need to focus on  
            its dire budget shortfall meant that delaying the bond vote  
            could increase its chances of success.  Subsequently, the  
            Water Bond was moved to the 2012 general election.  In 2012,  
            polling revealed that an incomplete economic recovery meant  
            the Water Bond was still unlikely to pass.  In response, it  
            was moved again, this time to the 2014 general election.



            In 2013, discussions began regarding whether the 2009 Water  
            Bond needed to be reduced.  On February 26, 2013 the Senate  
            Natural Resources and Water Committee held a joint oversight  
            hearing with the Senate Governance and Finance Committee  
            entitled, Overview of California's Debt Condition: Priming the  
            Pump for a Water Bond (joint hearing).  The stated purpose of  
            the joint hearing was to "inform members about the state's  
            debt condition, its capacity to incur additional debt for  
            water and other competing infrastructure needs, and issues  
            regarding using debt finance to improve the state's water  
            quality, supply, and infrastructure."  Background documents  
            for the joint hearing referenced the Governor's proposed  








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            2013-14 Budget, which acknowledges that since 2000 voters have  
            authorized $100 billion in new general obligation bonds and  
            the state has issued more than $28 billion since 2009.  On  
            March 12, 2013 the Senate Natural Resources and Water  
            Committee held a second bond-related oversight hearing  
            entitled: What's Changed Since the Legislature Passed the  
            Safe, Clean, and Reliable Drinking Water Supply Act of 2010?   
            The purpose of that hearing was to explore what modifications,  
            if any, should be made to the Water Bond in light of  
            circumstances which may have changed since it was originally  
            approved by the Legislature in 2009.  





            From October 2013 through May 2014 this Committee held  
            multiple Capitol hearings on the bond as well as nine field  
            hearings in various parts of the State.  By the time AB 1471  
            (Rendon), Chapter 188, Statutes of 2014 placed Prop. 1 on the  
            November 4, 2014 statewide ballot there had been nine  
            different substantive bond proposals discussed in the  
            Legislature ranging from $5.8 billion to over $10 billion. 





          1)The State Water Board is currently in the process of  
            developing Prop. 1 recycled water and desalination guidelines:  
             This year's emergency drought legislation, AB 92, among other  
            actions, accelerated the governor's proposed January 10 budget  
            allocation of $131.7 million in Prop. 1 funding for recycled  
            water and appropriated it immediately.  The State Water Board  
            responded by issuing draft amended Water Recycling Funding  
            Program (WRFP) guidelines and holding three workshops, one in  
            Perris in southern California, one in Fresno in the Central  
            Valley, and one in Sacramento in northern California.  Public  
            comments on the WRFP draft guidelines were due April 24, 2015.  








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            This bill would alter the recycled water criteria after the  
            guidelines are developed.   

          3)Prior and related legislation:



          AB 1265 (Caballero), Chapter 126, Statutes of 2010, moved the  
            Water Bond to the 2012 general election.  AB 1265 both changed  
            the timing of the Water Bond vote and deleted a provision  
            allowing for-profit entities to be members of joint powers  
            authorities for bond-funded surface water storage projects.  
            AB 1422 (Perea), Chapter 74, Statutes of 2012 moved the Water  
            Bond to the November 4, 2014 statewide general election but  
            otherwise left the text unchanged.


            AB 92 (Committee on Budget), Chapter 1, Statutes of 2015  
            accelerated several funding provisions from Prop. 1 including  
            the $131.7 million as mentioned above for the State Water  
            Board to build on the existing water recycling grant program  
            and $135.5 million for the State Water Board to improve access  
            to clean drinking water for disadvantaged communities and help  
            small communities pay for wastewater treatment. In addition  
            there was $15 million from the General Fund and special funds  
            for emergency drinking water projects, including hauled water,  
            bottled water, design and construction of connections to  
            adjacent public water systems, new wells and well  
            rehabilitation and $4 million from the Cleanup and Abatement  
            Account for the SWRCB to provide emergency safe drinking water  
            to disadvantaged communities impacted by the drought.


          4)Supporting arguments:  Supporters state that this bill  
            addresses the fact that several private drinking water wells  
            in California have already gone dry or become heavily  
            contaminated during our severe drought.  Supporters state that  
            in Kern County, for example, the Arvin Community Services  
            District recently extended drinking water service to  








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            neighboring individual homeowners whose wells had gone dry.   
            Supporters note that as the crisis deepens, statewide  
            resources will be critical in enabling local communities to  
            provide drinking water to those victimized by drought.
          


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Kern County Board of Supervisors




          Opposition




          Association of California Water Agencies


          


          Analysis Prepared by:Tina Cannon Leahy / W., P., & W. / (916)  
          319-2096














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