BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 2874|
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                                      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  








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            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










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          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,  








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            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


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