BILL ANALYSIS Ó AB 2617 Page 1 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 Page 2 | | |Wagner, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ 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 AB 2617 Page 3 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 AB 2617 Page 4 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 AB 2617 Page 5 $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 AB 2617 Page 6 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 AB 2617 Page 7 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