BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2874| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- CONSENT Bill No: AB 2874 Author: Beth Gaines (R) Amended: 6/2/16 in Senate Vote: 21 SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 6/14/16 AYES: Pavley, Stone, Allen, Hertzberg, Hueso, Jackson, Monning, Vidak, Wolk SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 79-0, 5/5/16 (Consent) - See last page for vote SUBJECT: Groundwater sustainability agencies: fees SOURCE: California Water Association DIGEST: This bill requires a groundwater sustainability agency (GSA), before imposing or increasing a fee relating to a groundwater basin that includes a water corporation regulated by the California Public Utilities Commission (CPUC), to notify the CPUC. ANALYSIS: Existing law: 1)Authorizes GSAs to impose fees, including, but not limited to, permit fees and fees on groundwater extraction, to fund the AB 2874 Page 2 costs of a groundwater sustainability program. 2)Requires the CPUC to regulate privately owned electric, natural gas, telephone, water, and sewer utilities, including approving all utility rate change requests. This bill requires a GSA, before imposing or increasing a fee relating to a groundwater basin that includes a water corporation regulated by the CPUC, to notify the CPUC. Comments Why notify the CPUC? The Sustainable Groundwater Management Act (SGMA) authorizes GSA to impose fees on groundwater extraction. In order for CPUC utilities to include such fees in their water rates, the CPUC looks to ensure that fees imposed on CPUC regulated water utilities fees are fair in their formation, they are applied fairly across all similar water users etc. This bill is intended to ensure that the CPUC has the appropriate information for making such determinations. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified6/27/16) California Water Association (source) OPPOSITION: (Verified6/27/16) Valley Ag Water Coalition AB 2874 Page 3 ARGUMENTS IN SUPPORT: According to the sponsor, "Despite the significant impact SGMA has on CPUC-regulated water utilities, the act does not provide for a process in which the CPUC may participate in the policymaking alongside other state and local officials. Without consideration of the CPUC's regulatory responsibility, and the regulated utilities' circumstances, customers of regulated water utilities could be harmed through changes in fees and groundwater rights. This bill will protect customers of CPUC-regulated water utilities from the omission in SGMA of a formal coordination process between the GSA and the CPUC." ARGUMENTS IN OPPOSITION: According to the Valley Ag Water Coalition, "AB 2874 would impose a new mandate on GSAs - the local agencies responsible for implementation of SGMA. AB 2874 would require a GSA to notify the CPUC before imposing or increasing a SGMA fee relating to a groundwater basin that includes a water corporation regulated by the Commission. "The imposition of SGMA fees is already required to comply with Proposition 218, thereby providing proper detailed notification to a water corporation subject to the fee or charge before the fee or charge is increased or imposed. Adding a further confusing notification requirement that falls outside the constitutional provisions under Proposition 218 is not only unnecessary from the legal standpoint of the GSA, it is not now, nor should it be, the responsibility of the GSA (or any other local agency)." ASSEMBLY FLOOR: 79-0, 5/5/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, AB 2874 Page 4 Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Beth Gaines Prepared by:Dennis O'Connor / N.R. & W. / (916) 651-4116 6/29/16 15:50:55 **** END ****