BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 2480|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   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: 








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          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  







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               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  







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          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  







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          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  







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          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."








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          "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


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