BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
                             Senator Fran Pavley, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 1095         Hearing Date:    July 14,  
          2015
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          |Author:    |Eduardo Garcia         |           |                 |
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          |Version:   |July 7, 2015    Amended                              |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Katharine Moore                                      |
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                     Subject:  Salton Sea: restoration projects.


          BACKGROUND AND EXISTING LAW
          The Salton Sea, California's largest man-made lake, is located  
          in a desert sink in Southern California.  The Salton Sea's water  
          level is currently maintained primarily by agricultural runoff,  
          which, by existing agreement - the Quantification Settlement  
          Agreement (QSA) - will start being reduced in 2017.  (The  
          history of California, the Colorado River's water supply and the  
          events that led to the QSA are described in the Comments  
          section.)

          The current sea was formed in 1905 when the Colorado River  
          flooded its banks during the building of the All-American Canal.  
          However, from the prehistoric era through the 1800s, the sea bed  
          has periodically filled and receded numerous times.

          The Salton Sea has significant value as a natural resource.  It  
          is one of the most important remaining wetland areas in  
          California for migratory waterfowl and shorebirds.  Over 95% of  
          the state's historical wetlands have been converted to other  
          uses.  The Salton Sea supports over 400 species of birds, and is  
          an internationally important stopover site for the hundreds of  
          thousands of bird migrating along the Pacific Flyway.  Fishery  
          resources in the Salton Sea have, however, declined lately due  
          to the increasing salinity - about double that of the ocean -  
          worsening water quality and a decline in the amount of the Sea's  
          water.







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          Without significant restoration efforts, the QSA water transfers  
          when fully implemented are highly likely to result in the  
          collapse of the Sea's ecosystem over the next 10 - 20 years, and  
          the sea itself will shrink in area considerably.  Fine particle  
          pollution is likely to increase in the Coachella and Imperial  
          Valleys due to the exposed sea bed.  The Imperial Valley already  
          suffers from the highest childhood asthma hospitalization rate  
          in the state and both Valleys containing high numbers of seniors  
          who are especially susceptible to poor air quality.

          Existing law authorizes $7.545 billion in general obligation  
          funding for water-related projects and programs in Proposition  
          1, which was passed by the voters in November 2014.  Proposition  
          1 authorizes $475 million in order to fulfill state obligations  
          related to a variety of agreements including restoration of the  
          Salton Sea.

          Existing law establishes the Salton Sea Restoration Act (act)  
          with the legislative intent of providing that the state  
          undertakes restoration of the Sea's ecosystem and the permanent  
          protection of the wildlife dependent on that ecosystem based on  
          a "preferred alternative" that is developed as a result of a  
          restoration study and alternative selection process.


          Existing law also requires the act's preferred alternative to  
          provide the maximum feasible attainment of specified  
          environmental objectives, including restoration of long-term  
          stable aquatic and shoreline habitat to historic levels and  
          diversity of fish and wildlife dependent on the Sea, elimination  
          of air quality impacts from restoration projects, and protection  
          of water quality. 


          Existing law requires the Secretary of the Natural Resources  
          Agency (agency) to, in consultation with the Department of Fish  
          and Wildlife, the Department of Water Resources, the Salton Sea  
          Authority, air quality districts, and the Salton Sea Advisory  
          Committee, undertake a restoration study to determine a  
          preferred alternative for restoration of the Sea, prepare a  
          Programmatic Environmental Impact Report (PEIR) analyzing the  
          alternatives, and submit a preferred alternative to the  
          Legislature. In 2007, the agency completed and released the  








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          Salton Sea Ecosystem Restoration Program Plan and Final PEIR.  
          The agency estimated that the preferred alternative identified  
          in the PEIR would cost over $8 billion to implement over a  
          period of 75 years. The PEIR noted that even the "no project"  
          alternative would cost the State over $1 billion due to state  
          and federal requirements to address air quality, water quality  
          and habitat issues. The $8.9 billion plan has not been  
          implemented.

          In 2012, the agency, working with the United States Army Corps  
          of Engineers, prepared and released a draft Salton Sea  
          Conservation Habitat (SCH) Project Environmental Impact  
          Statement/Environmental Impact Report (EIS/EIR). The SCH Project  
          EIS/EIR proposes a range of aquatic habitats to support fish and  
          wildlife species dependent on the Salton Sea. The agency's  
          preferred alternative identified in the EIS/EIR would include  
          construction of 3,770 acres of habitat ponds.  Funding was  
          provided for the first phase of the SCH Project using  
          Proposition 84 bond monies (approximately $27 million was  
          allocated) and included construction of 800 to 1,200 acres of  
          habitat ponds. Additional funding for implementation of the SCH  
          Project is being pursued.

          PROPOSED LAW
          This bill would require the agency to submit to the Legislature  
          a list of shovel-ready restoration projects for the sea,  
          including information regarding project costs and project  
          completion timelines on or by March 31, 2016.  "Shovel-ready" is  
          defined as those projects that are substantially through  
          planning, environmental review or permitting.
          
          ARGUMENTS IN SUPPORT
          The San Diego County Water Authority writes in support, "[t]he  
          key element of the QSA that remains unaddressed is the state's  
          obligation with respect to Salton Sea restoration. The QSA  
          implementing legislation requires the state to identify a  
          preferred Salton Sea restoration alternative and funding plan.  
          In 2007, the state identified and submitted to the Legislature  
          an $8.9 billion preferred alternative. The Legislature did not  
          act on the preferred alternative, nor has a viable funding plan  
          been developed."

          "AB 1095 would initiate the important process of attempting to  
          identify near-term projects to determine an appropriate spending  








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          plan utilizing Proposition 1 funds for the Salton Sea  
          restoration effort."

          "We believe it is imperative that any spending plan for Salton  
          Sea restoration must be framed by a clear and workable vision  
          and priorities. [?] Implementation-ready projects should support  
          effective air quality mitigation and wildlife habitat creation  
          with a high functional value."

          ARGUMENTS IN OPPOSITION
          None received

          COMMENTS
           Importance of shovel-ready projects  .  As noted above, water  
          flowing into the Sea will start being reduced in 2017.   
          Therefore there is merit in identifying restoration projects  
          that can be implemented rapidly in order to mitigate the  
          projected adverse environmental and human health impacts, among  
          others.  The state has an obligation to pay for, but the  
          Legislature is not required to allocate funds for, mitigation  
          and restoration efforts beyond a certain funding level under the  
          QSA, as described below.  The timing of the release of the  
          information required by this bill may also be helpful for the  
          budget cycle.

           Governor's Budget  .  The May Revise to the Governor's Budget  
          acknowledged that "[p]rior comprehensive plans to restore the  
          sea are no longer feasible due to cost and decreased water  
          availability resulting from the drought in California and in the  
          southwestern state."  The Administration announced the creation  
          of a Salton Sea Task Force to develop new medium and long-term  
          restoration plans through a stakeholder process.  A leader will  
          be appointed to a new position to lead the Task Force and manage  
          construction of projects to benefit wildlife habitat and air  
          quality.  No additional funds were allocated, however.

           History of the Colorado River, agreements to share its water and  
          the state's obligation to the sea  . Multiple western states  
          depend upon the Colorado River for water.  In 1922, the Colorado  
          River Compact (compact) was signed by the seven Colorado River  
          basin states. The compact apportions annual Colorado River flows  
          between these states.  The Upper Division - Colorado, New  
          Mexico, Utah and Wyoming - receive 7.5 million acre-feet (MAF)  
          annually, and an additional annual 7.5 MAF were assigned to the  








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          Lower Division.  The Lower Division flows were apportioned as  
          follows: California (4.4 MAF), Arizona (2.8 MAF) and Nevada (0.3  
          MAF).  The flows assigned were based on data collected prior to  
          1922 and later observations indicate this total volumetric flow  
          was on the high side.  California had historically also taken an  
          additional "surplus" 0.8 MAF not being used by the other state's  
          in order to average about 5.2 MAF of Colorado River water  
          annually.

          Over time, the other signatories to the compact pressured the  
          federal government to require California to reduce the amount of  
          water it took to 4.4 MAF annually.  California received a  
          deadline of December 31, 2002 to come up with a plan to comply  
          or else the then-Secretary of the Interior threatened to stop  
          declaring surpluses and cut off California's access to the extra  
          water supply.  The major Colorado River water rights holders in  
          California - the Imperial Irrigation District, the Metropolitan  
          Water District of Southern California, the San Diego County  
          Water Authority and the Coachella Valley Water District - agreed  
          to quantify their water rights, engage in a series of water  
          transfers and restore the Sea.  This agreement is the QSA  
          mentioned above. The Sea was included in the QSA because the QSA  
          called for agriculture-to-urban water transfers starting in 2017  
          that would reduce the runoff from the Imperial Irrigation  
          District that was providing the majority of water inflow to the  
          Sea.

          The state's obligation to fund restoration of the sea is related  
          to the QSA.  In order to facilitate the implementation of the  
          QSA, the Legislature passed and the Governor signed a package of  
          three bills in September 2003. That legislation detailed the  
          financial responsibility the state assumed with respect to  
          mitigation, and required the formation of a joint powers  
          authority (JPA) to implement and allocate mitigation  
          responsibilities between local agencies and the state. The JPA  
          consists of Department of Fish and Wildlife, the Coachella  
          Valley Water District, the Imperial Irrigation District, and the  
          San Diego County Water Authority. Under the QSA, Coachella,  
          Imperial, and San Diego agreed to fund the first $133 million  
          (in 2003 dollars) for mitigation costs related to habitat  
          restoration and air quality and the state assumed responsibility  
          for all mitigation and monitoring beyond that first $133  
          million. This open-ended State obligation was subject to  
          litigation with the Third District Court of Appeal ruling that  








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          while the state is contractually liable for the excess  
          mitigation costs, neither the QSA parties nor anyone else can  
          compel the Legislature to appropriate funds to pay for the  
          mitigation. 

           Imperial Irrigation District petition  .  In 2014, the Imperial  
          Irrigation District filed a controversial petition before the  
          State Water Resources Control Board asking that the Board  
          require the state and the parties to the water transfer  
          agreement to come up with a "realistic, feasible restoration  
          plan."  The petition seeks to condition water sales to San Diego  
          on the state fulfilling its promises to pay for offsetting  
          environmental mitigation and restoration.  A workshop was held  
          in March 2015 by the Board, and no formal action by the Board  
          appears to have been taken.

           Recent related legislation
           AB 71 (V. Manuel Pérez, c. 402, Statutes of 2013). This bill  
          required the agency secretary, in consultation with the Salton  
          Sea Authority, to lead Salton Sea restoration efforts.

          AB 148 (V. Manuel Pérez, c. 124, Statutes of 2014). This bill  
          made technical and clarifying changes to AB 71.

          SUPPORT
          San Diego County Water Authority

          OPPOSITION
          None Received

          
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