BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2480 (Bloom) - Source watersheds: financing
-----------------------------------------------------------------
| |
| |
| |
-----------------------------------------------------------------
|--------------------------------+--------------------------------|
| | |
|Version: August 1, 2016 |Policy Vote: N.R. & W. 6 - 2 |
| | |
|--------------------------------+--------------------------------|
| | |
|Urgency: No |Mandate: No |
| | |
|--------------------------------+--------------------------------|
| | |
|Hearing Date: August 1, 2016 |Consultant: Narisha Bonakdar |
| | |
-----------------------------------------------------------------
This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2480 declares it is state policy to recognize and
define source watersheds as integral components of California's
water system, and eligible for financing on an equivalent basis
with other water infrastructure projects.
Fiscal
Impact:
1)Potential cost pressures in the hundreds of millions of
dollars or more to finance watershed maintenance and repair on
an equivalent basis with other water projects.
2)Unknown, potentially significant, ongoing costs (General Fund)
to the SWRCB and DWR to provide guidance and oversight on
watershed financing and/or funding applications.
AB 2480 (Bloom) Page 1 of
?
Background:1) A watershed is an area of land that drains all the streams and
rainfall to a common outlet such as the outflow of a reservoir,
mouth of a bay, or any point along a stream channel. The word
watershed is sometimes used interchangeably with drainage basin
or catchment. Ridges and hills that separate two watersheds are
called the drainage divide. The watershed consists of surface
water, including lakes, streams, reservoirs, and wetlands and
all the underlying groundwater.
Watersheds are impacted by numerous stressors, including
drought, climate change, forest conversion, invasive species,
fire risks and fire suppression, neglect, and inadequate forest
management. According to the author, enhancing the conditions
of the watersheds increases water quality by reducing sediment,
lowering temperatures, and may also increase water quantity by
as much as 5 to 20%.
Klamath-Region Watershed. The Klamath-Cascade watershed spans
10 million acres and serves as the headwaters of the Sacramento
River and the source of much of the water that flows into the
Delta. The Klamath-Cascade watershed receives 75% of the
state's precipitation. According to the Pacific Forest Trust,
ensuring continued healthy watershed function requires that 85%
of the watershed remain intact as relatively natural forest.
The Trust is working with private landowners in the region to
conserve forests, and asserts that watershed protection through
maintenance of healthy forests is the least costly and most
effective approach to guaranteeing flows in the Sacramento
River.
Proposed Law:
This bill:
1)Declares it is state policy to recognize and define source
watersheds as integral components of California's water
system, and eligible for financing on an equivalent basis with
other water infrastructure projects.
2)States that the source watersheds that supply the Shasta and
Oroville reservoirs of the State Water Project (SWP) are of
particular importance to maintaining the reliability of the
AB 2480 (Bloom) Page 2 of
?
California water advances.
3)States that the maintenance and repair of these watersheds are
eligible for financing on the same basis as other SWP water
collection and treatment infrastructure.
4)Specifies that nothing in this section is intended to modify
existing grant programs or guidelines or constrain financing
for source watersheds supplying local, state, or federal water
systems.
5)Defines eligible maintenance and repair activities to include
the following forest ecosystem management activities:
a) Upland vegetation management to restore watershed
productivity and resilience.
b) Wet and dry meadow restoration.
c) Road removal and repair.
d) Stream channel restoration.
e) Conservation of private forests to preserve
watershed integrity through permanent prevention of land
use conversion, improved land management, achieved
through, and secured with, conservation easements.
f) Other projects with a demonstrated likelihood of
increasing conditions for water and snow attraction,
retention, and release under changing climate conditions.
Staff
Comments: Staff notes that the expectation of this language is
unclear. Proponents of the bill assert that by clarifying that
watershed improvements and repair should be treated the same as
infrastructure, this bill will allow for more innovative
AB 2480 (Bloom) Page 3 of
?
financing for water projects, such as WIFIA.
Water Infrastructure Finance and Innovation Act. The Water
Infrastructure Finance and Innovation Act (WIFIA) is a pilot
program, jointly administered by the U.S. Environmental
Protection Agency (US EPA) and the U.S. Army Corps of Engineers
(Army Corps), to promote private-sector investment in water
infrastructure by offering government-sponsored financing at
below-market cost of capital. WIFIA provides a five-year pilot
loan and guarantee program for water infrastructure development,
commencing with $40 million for 2015 and increasing to $100
million in 2019.
The author may wish to more specifically clarify the intent and
expectations of this bill. However, absent this clarity, the
fiscal assumes that the bill will allow additional projects to
be eligible for funding similar to that of the SWP. According to
DWR, the state's 29 water agencies, with whom the state has
water supply contracts, were charged $506 million in 2015
(excluding power supply costs or bond payments) for the
operation and maintenance costs of the SWP's 20 reservoirs. If
watershed restoration is expected to be funded on par with this
(and water quality expenditures), costs for this bill could
reach $500 million or more.
-- END --