BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1243


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          Date of Hearing:  April 14, 2015


                  ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE


                                 Marc Levine, Chair


          AB 1243  
          (Gray) - As Introduced February 27, 2015


          SUBJECT:  Sustainable Groundwater Management Act: Enforcement


          SUMMARY:  Requires that 50% of the fines collected by the State  
          Water Resources Control Board (State Water Board) when locals  
          violate the provisions of the Sustainable Groundwater Management  
          Act (SGMA) are deposited in a Groundwater Recharge Fund to fund  
          local groundwater recharge projects.   Specifically, this bill:   



          1)Establishes the Groundwater Recharge Grant Fund in the State  
            Treasury, with funds available to the State Water Board, by  
            appropriation, for grants to local governments and water  
            districts for groundwater recharge infrastructure projects.


          2)Requires half of all funds the State Water Board recovers in  
            response to a violation or threatened violation of SGMA be  
            deposited in the Groundwater Recharge Grant Fund.


          EXISTING LAW:  


          1)Requires the Department of Water Resources (DWR) prioritize  








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            California's groundwater basins in order to focus state  
            resources.  The basins are prioritized as either high, medium,  
            low, or very low based on a combination of factors including,  
            but not limited to, overlying population, level of dependence  
            for urban and agricultural water supplies, and impacts on the  
            groundwater from overdraft, subsidence, saline water  
            intrusion, and water quality degradation.


          2)Requires, by June 30 2017, the formation of one or more  
            Groundwater Sustainability Agencies (GSAs) in all high and  
            medium priority basins subject to the Sustainable Groundwater  
            Management Act (SGMA).


          3)Requires, by January 31, 2020, that GSAs in all high and  
            medium priority basins subject to a chronic condition of  
            overdraft develop and adopt Groundwater Sustainability Plans  
            (GSPs) that provide for the sustainable management of the  
            groundwater basin, as defined.


          4)Requires, by January 31, 2022, that GSAs in all other high and  
            medium priority basins subject to SGMA develop and adopt GSPs.


          5)Allows the State Water Board to impose an interim plan for  
            management of a groundwater basin if no GSA is formed by the  
            deadline, no GSP is adopted by the appropriate deadline, or a  
            GSP is adopted which DWR deems insufficient and where the  
            basin is in a chronic condition of overdraft or in a condition  
            where groundwater pumping is causing a significant depletion  
            of interconnected surface waters. 


          6)Allows the State Water Board to require direct reporting of  
            groundwater extractions in any area subject to SGMA where no  
            GSA is formed by the deadline and allows the State Water Board  
            to charge fees for its costs of management.








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          7)Continuously appropriates $2.7 billion to the California Water  
            Commission to fund the public benefits of surface water  
            storage and groundwater storage projects in California,  
            including up to 50% of the project's cost.


          FISCAL EFFECT:  Unknown


          COMMENTS:  This bill requires 50% of all penalty monies  
          collected by the State Water Board for SGMA violations be  
          rebated back to local agencies and water districts for  
          groundwater recharge projects.



          In 2010, California voters passed Proposition 26, the so called  
          "Stop Hidden Taxes" initiative.  Prop. 26 places great  
          limitations on the ability of State and local agencies to fund  
          programs by requiring that all fees that State agencies charge  
          must be proportional to the cost of running the program or  
          otherwise be considered a tax requiring a supermajority of the  
          Legislature to pass. 

          However, even Prop. 26 specifically exempts from its tax  
          prohibition any fine, penalty, or other monetary charge imposed  
          by the judicial branch of government or the State, as a result  
          of a violation of law.  This is a recognition that fines and  
          penalties are not meant to provide a special benefit to anyone,  
          they are punitive.


          Because funds for violations are not subject to Prop. 26, they  
          can be directed by agencies to address more general problems,  
          such as compliance assistance for disadvantaged communities. 










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          In contrast Proposition 1, the Water Quality, Supply, and  
          Infrastructure Act of 2014, contains $2.7 billion, which is  
          continuously appropriated to the California Water Commission  
          (CWC) to fund the public benefits of both surface water and  
          groundwater storage projects.  Under Prop. 1, the CWC may fund  
          up to 50% of a project's cost.


          Supporting arguments:  The author states this bill is needed  
          because while "overuse and excessive pumping of groundwater can  
          cause significant problems, such as subsidence, recharging  
          groundwater basins is relatively cheap and easy while providing  
          a significant storage option that has been underutilized in the  
          past." The author adds that while Proposition 1 provides $100  
          million in funding to groundwater sustainability agencies to  
          develop and implement GSPs, "local jurisdictions lack a  
          dedicated source of funding for recharge infrastructure."  


          Opposing arguments: Opponents point out that "in addition to  
          assuring compliance with laws and regulations, fines are  
          assessed to cover the cost of compliance actions.  Artificially  
          setting the level of payment into the Groundwater Recharge Fund  
          could have the effect of raising the size of the fines that the  
          Board assesses.  Opponents also state that they oppose this bill  
          because "groundwater recharge is only one tool to achieve  
          sustainability, but local agencies may need Board funding for a  
          variety of projects and technical assistance, not just  
          recharge." 



          Suggested Committee Amendments


          This bill requires 50% of all penalty funds to be diverted into  
          a groundwater recharge project grant program.  However, the bill  
          does not take into account how much of those funds are needed  
          for the State Water Board to run the enforcement program.  So,  








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          that would drive up the cost of fines.  This bill also denies  
          the State Water Board the flexibility to use half of its  
          groundwater enforcement funds where it sees fit by requiring  
          that half must go towards local agencies' groundwater recharge  
          projects.  However, recharge projects are only one potential  
          solution.  There could be a disadvantaged community or other  
          group who needs help funding technical planning.  There could be  
          another group who can't reach agreement on governance without a  
          mediator.  There may be a local GSA that would like to offer  
          incentives to landowners to join a cooperative program or who  
          needs help funding monitoring that is in lieu of putting a  
          measuring device on each well. The State Water Board is not  
          required to provide funding to these groups, but it would likely  
          be precluded from using enforcement funds to help if half of all  
          of those funds must go towards groundwater recharge  
          infrastructure projects.


          Since Prop. 1 already provides $2.7 billion for surface water  
          and groundwater storage projects, Committee staff suggests that  
          the State Water Board be specifically authorized, upon  
          appropriation by the Legislature, to use funds recovered in  
          response to a violation or threatened violations of SGMA, which  
          exceed the cost of the State Water Board's SGMA enforcement  
          program, for loans, grants, or other actions to help facilitate  
          formation of GSAs, implementation of GSPs, or other actions to  
          advance the purposes of SGMA.


          Related legislation

          This is one of 14 bills in the Legislature proposing changes to  
          SGMA and its related statutes.  The other bills are: AB 452  
          (Bigelow) prohibiting the State Water Board from using Water  
          Rights Fund monies for SGMA enforcement, except funds collected  
          from SGMA enforcement; AB 453 (Bigelow) allowing groundwater  
          management plans adopted prior to SGMA to be amended and  
          extended; AB 454 (Bigelow) adding one year to the deadline to  
          form a GSA or adopt a GSP; AB 455 (Bigelow) requiring the  








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          Judicial Council to come up with a 270-day process for  
          completing all California Environmental Quality Act (CEQA) legal  
          challenges to SGMA projects; AB 617 (Perea) adding mutual water  
          companies to GSAs; AB 938 (Salas) making minor technical changes  
          to SGMA; AB 939 (Salas) changing the time period for providing  
          technical data upon which a fee is based from 10 days to 20 days  
          before the meeting to adopt the fee;  AB 1242 (Gray) prohibiting  
          the State Water Board from setting in-stream flows standards  
          unless the Board mitigates for the potential local response of  
          increased groundwater use; AB 1390 (Alejo) creating a  
          streamlined process for groundwater adjudications and exempting  
          them from SGMA, except minimal reporting requirements; AB 1531  
          (Environmental Safety and Toxic Materials Committee) making  
          minor technical changes to SGMA; SB 13 (Pavley) making  
          noncontroversial technical cleanup changes to SGMA; SB 226  
          (Pavley) adding a streamlined groundwater adjudication section  
          to SGMA; and SB 487 (Nielsen) exempting SGMA projects from CEQA.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          None on file




          Opposition



          Union of Concerned Scientists










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          Clean Water Action


          Community Water Center


          Leadership Counsel for Justice & Accountability


          Center for Biological Diversity


          Sierra Club California




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