BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2617


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          ASSEMBLY THIRD READING


          AB  
          2617 (Mayes)


          As Amended  May 27, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Water           |15-0 |Levine, Gallagher,    |                    |
          |                |     |Bigelow, Dodd,        |                    |
          |                |     |Eggman, Cristina      |                    |
          |                |     |Garcia, Eduardo       |                    |
          |                |     |Garcia, Gomez,        |                    |
          |                |     |Harper, Lopez,        |                    |
          |                |     |Mathis, Medina,       |                    |
          |                |     |Olsen, Salas,         |                    |
          |                |     |Williams              |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Roger         |                    |
          |                |     |Hernández, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |








                                                                    AB 2617


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          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
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          SUMMARY:  Requires the Department of Water Resources (DWR) to  
          prepare a report analyzing the costs and benefits of incentives  
          for certain water efficiency measures.  Specifically, this bill:


          1)Requires the DWR, by December 1, 2017, in consultation with  
            experts at the University of California, California State  
            University, the State Water Resources Control Board (Water  
            Board), the State Energy Resources Conservation and  
            Development Commission, and local water districts, to develop  
            and solicit comments on a proposed report that contains an  
            analysis of the relative costs and benefits of incentives for  
            various water efficiency measures, including the impact of  
            evapotranspiration rates in different hydrological regions of  
            the state.  


          2)Requires that the water efficiency measures considered in the  
            proposed report include but not be limited to the following  
            measures:


               a)     Turfgrass removal and replacement with  
                 drought-resistant turfgrass or artificial turf.  

               b)     Turfgrass removal and replacement with native or  
                 drought-tolerant plants.

               c)     Non-native or high water using plant removal and  
                 replacement with native or drought-tolerant plants,  
                 drought-resistant turfgrass, or artificial turf.

               d)     Use of conservation-based irrigation technology such  








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                 as smart controllers.

               e)     Investments in graywater infrastructure to supply  
                 water for outdoor landscapes.

               f)     Rebates for highly efficient consumer appliances and  
                 landscape systems.  Highly efficient consumer appliances  
                 and landscape systems are defined to include, but are not  
                 limited to, irrigation systems, toilets, showers, pool  
                 covers, and clothes washers.


          3)Requires that the proposed report include an analysis of  
            adverse environmental impacts of the water efficiency measures  
            considered, and the projected benefits of recommended  
            voluntary water efficiency measures.  Adverse environmental  
            impacts are defined to include, but are not limited to,  
            impacts on climate change, net effect on carbon sequestration,  
            increased erosion, and impacts to stormwater runoff.


          4)Requires the DWR to issue a final report by July 1, 2018, that  
            includes both of the following:


               a)     All material developed for the report required by  
                 this bill, updated as appropriate to further the stated  
                 legislative intent.

               b)     Recommendations to public entities to help them  
                 achieve water-resilient communities and prioritize  
                 cost-effective water efficiency measures with low adverse  
                 environmental impacts based on local conditions, such as  
                 education, granting incentives or rebates, or other  
                 voluntary measures.


          5)States legislative intent for the state to promote  
            water-resilient communities by identifying the relative  








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            cost-effectiveness of water efficiency measures and  
            recommending those that have the potential to cost-effectively  
            achieve the greatest reduction in water use, taking into  
            account local conditions, and to produce net environmental  
            benefits that outweigh any adverse environmental impacts.   


          EXISTING LAW:  


          1)Promotes landscape water conservation through water efficient  
            landscape ordinances.  Local agencies must have a water  
            efficient landscape ordinance or the DWR's model water  
            efficient landscape ordinance applies.  The model ordinance  
            addresses water conservation and appropriate plant use,  
            encourages the capture and retention of stormwater, and  
            encourages the use of economic incentives to promote the  
            efficient use of water. 


          2)Promotes landscape water conservation through urban water  
            management planning.  Under the Urban Water Management  
            Planning Act, urban water agencies are required to develop and  
            adopt urban water management plans.  Among other things, urban  
            water management plans are to describe water demand management  
            measures including large landscape conservation programs and  
            incentives.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee:


          1)Unknown additional costs, likely in the $300,000 to $400,000  
            range for the DWR to develop the report.


          2)Increased costs for the Water Board to participate in the  
            evaluations of water efficiency measures of approximately  








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            $70,000 per year.


          COMMENTS:  This bill requires the DWR, in consultation with  
          other entities, to produce a report that analyzes various water  
          efficiency incentive programs.  The report would be required to  
          include an analysis of specific water efficiency programs but  
          could include others.  


          The author states that while millions of dollars have been spent  
          on water efficiency incentives in response to California's  
          drought, there is not an authoritative independent report  
          comparing the relative costs and benefits of different incentive  
          options.  An audit of the Los Angeles Department of Water &  
          Power's turfgrass replacement program released by the city  
          controller in November 2015 found that the turf rebate program  
          saved less water per dollar spent than other conservation  
          programs, such as rebates on high-efficiency appliances, which  
          yielded a water savings almost five times higher than turf  
          replacement.  This bill would direct the DWR to produce a report  
          on water efficiency incentives and to consider any adverse  
          environmental impacts.  The report can serve as a guide to local  
          water retailers as they evaluate which incentives make sense for  
          their customers, and lead to greater increases in water  
          efficiency at the lowest possible cost.  


          Water applied to landscapes is 50% of residential water  
          consumption statewide, but varies considerably by region, from  
          30% in some coastal communities to 60% or more in some inland  
          areas.  According to the DWR's website, outdoor landscaping is  
          the single largest use of residential water, and in most  
          residential yards turfgrass is the largest consumer of water.   
          Reducing or eliminating how much grass is present in residential  
          landscapes can thus produce significant water savings.  The  
          Governor's Executive Order issued in April 2015 directed  
          specific actions to reduce potable water use in the urban  
          sector.  Directive number 3 of the order called for 50 million  








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          square feet of turf to be replaced with drought-tolerant  
          landscapes, to be accomplished by, among other things, a  
          residential turf rebate program implemented by DWR.


          The DWR operated a $24 million turf replacement program with  
          rebates of $2 per square foot capped at $2,000 per household.   
          The rebates are directed to local turf replacement programs.   
          This is estimated to benefit more than 10,000 homes, with $12  
          million targeted to disadvantaged communities hardest hit by the  
          drought.  The program is projected to yield 1,200 acre feet of  
          water savings annually, which is approximately equivalent to  
          replacing 44,000 legacy toilets with high water efficiency  
          toilets. 




          In recent years, a number of local governments and agencies have  
          established rebate programs to encourage conservation.  For  
          example, in an effort to reduce water consumption, the  
          Metropolitan Water District of Southern California offered a  
          rebate based on each square foot of turf removed.  The City of  
          Sacramento also offered cash to help customers remove their  
          front yard turf and replace it with native and drought tolerant  
          plants.  A report by the Public Policy Institute of California  
          found that well installed drip irrigation can attain efficiency  
          levels approaching 90-95%, and that low-water plants need only  
          20% of the evapotranspiration rate compared to 80% for lawns.  


          The sponsors of this bill assert that the environmental benefits  
          of turfgrass include carbon sequestration.  A 2008 research  
          report commissioned by the sponsors entitled Technical  
          Assessment of the Carbon Sequestration Potential of Managed  
          Turfgrass in the United States by Dr. Ranajit Sahu found that  
          one acre of managed turfgrass will hold about .46 tons or 920  
          lbs. of carbon in a year.  After subtracting the amount of CO2  
          emitted by mowers, the study concluded that turfgrass produced a  








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          net carbon sink of 760 lbs.  However, critics of the study have  
          asserted that it failed to take into account the amount of CO2  
          emitted by lawn chemicals, the manufacture and transport of  
          fertilizers, and the effects of irrigation.  By comparison,  
          temperate forests can hold 2,000 to 6,000 lbs. of carbon per  
          year per acre, and native grasslands can sequester 2,400 to  
          3,000 lbs. per year.  Studies show that different types of  
          vegetation and how they are managed will sequester different  
          quantities of CO2.


          Analysis Prepared by:                          Diane Colborn /  
          W., P., & W. / (916) 319-2096                    FN: 0003318