BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2480| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2480 Author: Bloom (D) Amended: 8/15/16 in Senate Vote: 21 SENATE NATURAL RES. & WATER COMMITTEE: 6-2, 6/28/16 AYES: Pavley, Allen, Hertzberg, Hueso, Jackson, Monning NOES: Stone, Vidak NO VOTE RECORDED: Wolk SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 50-25, 6/2/16 - See last page for vote SUBJECT: Source watersheds: financing SOURCE: Author DIGEST: This bill 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. ANALYSIS: Existing law contains a number of statements of state water policy. These include: AB 2480 Page 2 1)The water resources of the State [are to] be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented. CWC §100. 2)All water within the State is the property of the people of the State, but the right to the use of water may be acquired by appropriation in the manner provided by law. CWC §102. 3)It is hereby declared to be the established policy of this State that the use of water for domestic purposes is the highest use of water and that the next highest use is for irrigation. §106. 4)It is hereby declared to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. CWC §106.6. This bill: 1)Declares it to be "the established policy of the state that source watersheds are recognized and defined as integral components of California's water infrastructure." 2)Makes the maintenance and repair of source watersheds is eligible for the same forms of financing as other water collection and treatment infrastructure. 3)Limits eligible maintenance and repair activities pursuant to this bill to the following forest ecosystem management activities: a) Upland vegetation management to restore the watershed's AB 2480 Page 3 productivity and resiliency. 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 and 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. 4)Provides that nothing in this bill is intended to: a) Constrain financing for source watersheds supplying local, state, or federal water systems. b) Supersede federal eligibility requirements or alter any of the following: i) Funding criteria or guidelines established for a bond or other measure enacted by the voters. ii) Funding programs related to pollution control, cleanup, or abatement. iii) Funding programs for addressing public health emergencies. Comments ACWA Headwaters Framework. On March 20, 2015, the Association of California Water Agencies (ACWA) released a policy framework aimed at effectively managing headwaters areas such as the Sierra Nevada, source of much of the state's water supply. According to ACWA's press release, "The formal release of the document, 'Improving the Resiliency of California's Headwaters,' comes the day after Gov. Jerry Brown and legislative leaders outlined an emergency drought package to mobilize state resources to deal with a fourth year of drought. Given the severity of the drought, the risk of more destructive wildfires this summer and ongoing climate change, ACWA believes it is time to elevate headwaters issues and engage partners at all levels 'Improving the Resiliency of California's Headwaters - A AB 2480 Page 4 Framework,' makes nearly 30 specific recommendations in the areas of improved planning, coordination and implementation, managing headwaters resources, research and financing headwaters improvements." Among the recommendations in ACWA's report were: Improved headwaters management must become a high priority for state, federal and local agencies. Agencies at all levels should find ways to help public and private landowners restore meadows and watersheds to improve their critical functions and reduce wildfire impacts. Stakeholders at all levels should invest and participate in landscape-level research that explores water and forestry relationships, including ecological forest thinning which can have multiple benefits for water supply reliability, water quality and ecosystems. What Does The Science Show? While studies show a water supply benefit to different watershed restoration activities, the economics are a bit less clear. For example, a recent study by the Nature Conservancy titled Estimating the Water Supply Benefits from Forest Restoration in the Northern Sierra Nevada, found: "This assessment is a first attempt at calculating the water supply benefits from watershed-scale forest restoration in the northern Sierra Nevada. These watershed level results suggest that the economic benefits from water yield increases may be an important argument in favor of additional forest restoration investments. Nevertheless it is important to emphasize that such actions do not represent a solution to California's water crisis, but rather a sensible investment in forest management that is likely to create benefits for water users downstream." FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, the bill "will help watershed maintenance or repair projects access the same forms of financing available to other water infrastructure projects (special fund). To the extent that these projects AB 2480 Page 5 compete with water infrastructure projects for funding. These projects will result in cost pressures in the millions." SUPPORT: (Verified8/12/16) Audubon California Bear-Yuba Land Trust California League of Conservation Voters California ReLeaf Defenders of Wildlife League of Women Voters of California Lutheran Office of Public Policy Mono Lake Committee Pacific Forest Trust Sequoia Riverlands Trust Trust for Public Land Wholly H2O OPPOSITION: (Verified8/12/16) Association of California Water Agencies Calaveras Healthy Impact Product Solutions Foothill Conservancy San Diego County Water Authority (1) Individual ARGUMENTS IN SUPPORT: According to the author, "California's water system is highly complex and sophisticated. 80% of its reservoir supply is held in two dam facilities, the Shasta and Oroville Dams, which are the built infrastructure foundation for the State and Central Valley Water Projects." "[T]hese projects rely on more than the built infrastructure to function. They rely on the five watersheds above the dams to collect, treat and deliver that water to the dams. These are the Feather, Pit, McCloud, Upper Sacramento and Trinity River watersheds. While there is recognition that watersheds play these functions in various parts of the water code, there is no AB 2480 Page 6 policy or system of support for this natural infrastructure which is integral to, and supplies and complements, the built infrastructure of these water systems." "Further, there is substantial scientific recognition that watershed condition affects the quality and quantity of water delivered by watersheds to dams. The condition of these five watersheds is distinctly suboptimal. Enhancing that condition would increase water quality (reducing sediment such as ash & soil), lowering temperatures, and likely quantity (from 5-20% or more depending on conditions) as well as fundamental function." "Restoration and conservation in these watersheds has been sporadic, inadequate and supported by general obligation bonds. There has been no comprehensive plan developed for their restoration and conservation to enhance our water security. Such efforts to date have been both limited and uncoordinated and fiscally inefficient." "AB 2480 therefore recognizes the fundamental water system infrastructure role of source watersheds, and set the foundation for a comprehensive plan of restoration and conservation, with the potential of future financing to be appropriately classed as revenue bonds and similarly financed as the built infrastructure improvements and maintenance are." ARGUMENTS IN OPPOSITION: According to the Association of California Water Agencies (ACWA), "AB 2480 would declare state policy that source watersheds are recognized and defined as integral components of California's water system. As amended, this bill would now require that, to the extent feasible, the maintenance and repair of source watersheds and associated projects would receive financing consideration 'on the same basis' with other water collection and treatment infrastructure and would specify that the maintenance and repair activities that are eligible for funding are limited to certain forest ecosystem management activities. This bill does not define what 'on the same basis' would mean. The bill also does not include language prohibiting the imposition of a public goods charge to finance the provisions of this bill." AB 2480 Page 7 "With respect to financing, much of the land within these source watersheds is federal national forest lands. If we are going to enhance these watersheds, we need to support a federal-state partnership in the funding portion moving forward." "ACWA supports watershed funding that is paid for through the General Fund, the Greenhouse Gas Reduction Fund (Cap and Trade), or a future General Obligation Water Bond. We do not support a public goods charge or statewide water tax to fund watersheds or any other priorities." "For these reasons, ACWA opposes AB 2480." ASSEMBLY FLOOR: 50-25, 6/2/16 AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon NOES: Achadjian, Travis Allen, Baker, Brough, Chang, Chávez, Gallagher, Grove, Harper, Jones, Kim, Lackey, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Salas, Steinorth, Wagner, Waldron, Wilk NO VOTE RECORDED: Bigelow, Dahle, Beth Gaines, Gray, Hadley Prepared by:Dennis O'Connor / N.R. & W. / (916) 651-4116 8/15/16 19:39:52 **** END ****