BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
                             Senator Fran Pavley, Chair
                                2015 - 2016  Regular 

          Bill No:            AB 2909         Hearing Date:    June 28,  
          2016
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          |Author:    |Levine                 |           |                 |
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          |Version:   |June 21, 2016                                        |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Dennis O'Connor                                      |
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              Subject:  Water:  transfer or exchange:  expedited review


          BACKGROUND AND EXISTING LAW
          
          1.  Current law provides "It is hereby declared to be the  
          established policy of this state to facilitate the voluntary  
          transfer of water and water rights where consistent with the  
          public welfare of the place of export and the place of import."

          To that end, the Department of Water Resources (DWR), the State  
          Water Resources Control Board (state board), "and all other  
          appropriate state agencies are directed to encourage voluntary  
          transfers of water and water rights, including, but not limited  
          to, providing technical assistance to persons to identify and  
          implement water conservation measures which will make additional  
          water available for transfer."

          2.  Under current law, a person with a water rights permit or  
          licensee may temporarily change the point of diversion, place of  
          use, or purpose of use due to a transfer or exchange of water or  
          water rights if the transfer meets certain criteria.  These  
          include:

                 The transfer would only involve the amount of water that  
               would have been consumptively used or stored by the  
               permittee or licensee in the absence of the proposed  
               temporary change. 








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                 The transfer would not injure any legal user of the  
               water, during any potential hydrologic condition that the  
               board determines is likely to occur during the proposed  
               change, through significant changes in water quantity,  
               water quality, timing of diversion or use, consumptive use  
               of the water, or reduction in return flows.

                 The transfer would not unreasonably affect fish,  
               wildlife, or other instream beneficial uses.

          Key definitions include:

           "Temporary change" - any change of point of diversion, place  
            of use, or purpose of use involving a transfer or exchange of  
            water or water rights for a period of one year or less.  This  
            is sometimes also called a short-term transfer.

           "Consumptively used" - the amount of water which has been  
            consumed through use by evapotranspiration, has percolated  
            underground, or has been otherwise removed from use in the  
            downstream water supply as a result of direct diversion.

          Short-term transfers are exempt from the California  
          Environmental Quality Act (CEQA).

          A short-term transfer is initiated by a petition to the state  
          board to change the terms of the permit or license.   The  
          process is as follows:

           The petitioner is required to provide a copy of the petition  
            to the Department of Fish and Wildlife (DFW), the board of  
            supervisors of the county or counties in which the petitioner  
            currently stores or uses the water subject to the petition,  
            and the board of supervisors of the county or counties to  
            which the water is proposed to be transferred.

           Within 10 days of the date of submission of a petition:
                 The petitioner must publish a notice of the petition and  
               a brief description of the terms of the proposed temporary  
               change. 
                 The state board must provide to the petitioner a list of  
               water right holders of record on file with the board who  
               may be affected by the transfer,  
                 The petitioner must provide written notice to those  








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               water right holders not later than 10 days after the date  
               on which the petition is submitted, and 
                 The state board must post the notice of petition on its  
               Internet Web site. The notice of the petition must specify  
               the date on which comments are due.

           Also within 10 days of the date of receipt of a petition, the  
            state board must begin an investigation of the proposed  
            temporary change. As a part of that investigation, the state  
            board must:
                 Determine if the water proposed to be transferred would  
               have been consumptively used or stored in the absence of  
               the proposed. 
                 Evaluate the changes in water storage, timing and point  
               of diversion, place and purpose of use, timing and point of  
               return flow, water quality, and instream flows, and other  
               changes that are likely to occur as a result of the  
               proposed temporary change.

           Water users that may be affected by a proposed temporary  
            change and any other interested party may file a written  
            comment regarding a petition with the state board. Comments  
            shall be filed not later than 30 days after the date that the  
            notice was published. 

           The state board is required to render a decision on the  
            petition not later than 35 days after the date that  
            investigation commenced or the date that the notice was  
            published, whichever is later, with two exceptions (below).  
            The board must explain its decision in writing and send copies  
            of the decision to the petitioner, the DFW, the relevant  
            board(s) of county supervisors, the proposed transferee, and  
            any party who has filed a written comment.
                 If comments are filed on the proposed transfer, the  
               state board may extend the date of its decision for up to  
               20 days.
                 If the state board or the petitioner determines that an  
               additional extension of time for a decision is necessary  
               for the state board to make its findings or that a hearing  
               is necessary for the board to make those findings, the  
               board may extend the time for a decision with the consent  
               of the petitioner.

          3.  Also under current law, neither the state, nor any regional  








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          or local public agency may deny a transferor of water the use of  
          a water conveyance facility which has unused capacity, for the  
          period of time for which that capacity is available, if fair  
          compensation is paid for that use, subject to the following:

           Any person that has a long-term water service contract with or  
            the right to receive water from the owner of the conveyance  
            facility has the right to use any unused capacity prior to any  
            bona fide transferor.

           The commingling of transferred water will not diminish the  
            beneficial uses or quality of the water in the facility.

           Any person has a water service contract with or the right to  
            receive water from the owner of the conveyance facility who  
            has an emergency need may use the unused capacity that was  
            made available pursuant to this section for the duration of  
            the emergency.

           The use of a water conveyance facility would not:
                 Injure any legal user of water. 
                 Unreasonably affect fish, wildlife, or other instream  
               beneficial uses 
                 Unreasonably affect the overall economy or the  
               environment of the county from which the water is being  
               transferred.

          4.  DWR has contracts with the water agencies participating in  
          the state water project (SWP).  Provisions of those contracts  
          govern how, among other things, DWR treats requests to exchange  
          water among SWP contractors. (The contracts do not allow for  
          selling what are known as Table A supplies, only exchanges.)

          PROPOSED LAW
          
          This bill would:

          Require the state board to develop and implement an expedited  
          30-day review process for approval of petitions to temporarily  
          change the point of diversion, place of use, or purpose of use  
          due to a transfer or exchange of water or water rights if the  
          transfer is for a reoccurring water transfer or an  
          environmentally beneficial transfer.









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          Require DWR to develop a 30-day review process for reoccurring  
          water transfers between contractors for State Water Project  
          water and for reoccurring water transfers that utilize  
          facilities of the State Water Project.

          Define the following terms

           "Environmentally beneficial transfer" means a transfer that  
            does not negatively impact an ecosystem's health or local  
            drinking water supply in the source area and includes any of  
            the following:
                 A transfer between water users that is designed to  
               benefit the environment. 
                 A transfer that protects habitat and sensitive wildlife  
               or enhances managed wetland supply, wildlife refuges,  
               ecosystems, and instream flow. 
                 A transfer that benefits local drinking water supplies  
               by reducing local groundwater overdraft or improving water  
               quality. 
                 A transfer that contributes to the implementation of the  
               Sustainable Groundwater Management Act (SGMA).

           "Reoccurring water transfer" means a transfer of one year or  
            less that is substantially similar in volume, time of year,  
            and hydrologic conditions to a transfer previously approved by  
            the department or the board in the past 48 months.

          Further provide:

           Transfers under this bill shall not alter the priority for use  
            of conveyance facilities.

           The provisions of this bill are in addition to any other law  
            relating to water transfers or exchanges.

           This bill shall remain in effect only until January 1, 2022,  
            and as of that date is repealed, unless a later enacted  
            statute, that is enacted before January 1, 2022, deletes or  
            extends that date.

          ARGUMENTS IN SUPPORT
          
          According to the author, "Water transfers make up only 3% of all  
          water use in California.  Clearly we can do better.  It is  








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          important that we remove as many barriers to transfers as  
          possible.  This bill is a simple step to ensure that where  
          substantially similar transfers have been completed before they  
          do not have to go back to square one for approval.   
          Additionally, a more nimble response to critical environmental  
          needs is provided.  This will allow for improved efficiency in  
          completing transfers as we move forward and will help us more  
          efficiently distribute water."

          ARGUMENTS IN OPPOSITION: None Received
          
          COMMENTS
          
           How Long Does Approving Short-Term Transfers Normally Take?  By  
          law, the state board moves pretty quickly in approving short  
          term transfers.  

          Current law requires public notice of the petition to be  
          provided within 10 days of the date of submission of the  
          petition to the State Water Board. The notice period per the  
          Water Code lasts 30 days. If no comments are received, the state  
          board usually acts on the petition within 5 days. If comments  
          are received, the State Board may extend their decision for up  
          to 20 days.  All told, this means the state board acts between  
          about 45 days to 60 days to approve short-term transfers.

           Balance Of Expediency And Protection Of Water Rights.   The  
          current process reflects a balancing of acting quickly versus  
          ensuring no harm to legal water users and the environment.   
          Reducing the state board's time to process a short term transfer  
          means reducing the level of effort by the state board and  
          interested parties to ensure the transfer will do no harm to any  
          legal water user or the environment.
           Access to SWP.   DWR has to consider two key issues when  
          determining whether to transport (or "wheel") water using the  
          SWP:
           Would the transfer harm any legal water user or the  
            environment?
           Does the SWP have sufficient excess capacity to move that  
            water?

          The question about excess capacity hinges on two additional  
          things.  First, DWR's window for wheeling non-SWP water is  
          July-August-September.  That is when the various biological  








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          opinions and other constraints allow wheeling of non-SWP water.   
          Second, DWR cannot know if it will have excess capacity during  
          that transfer window until it schedules all SWP deliveries, and  
          DWR determines that in May.  So, the decision regarding wheeling  
          of non-SWP water hinges more on the time of year than the  
          administrative review process.

           Definition Of An Environmentally Beneficial Transfer Is Broad.    
          For example, it includes any transfer that reduces local  
          groundwater overdraft or helps to implement SGMA.  Arguably, any  
          transfer that brings water into an overdrafted basin will help  
          reduce overdraft, either by reducing demands for ground water or  
          by recharging groundwater through water that percolates after  
          use for irrigation.

           Recurring Short Term Transfer Vs. Long Term Transfers.   
          Short-term transfers have a fairly quick approval process and  
          are exempt from CEQA.  Long-term transfers, defined in statute  
          as any period in excess of one year, are not exempt from CEQA  
          and so their approval process can take significantly more time.   
          By requiring the state board to develop a process to approve  
          short-term transfers that are "substantially similar in volume,  
          time of year, and hydrologic conditions" to a previously  
          approved transfer, this bill seems to be blurring the difference  
          between short-term transfers and some long-term transfers.

          SUGGESTED AMENDMENTS: None 

          SUPPORT: None Received

          OPPOSITION: None Received

          
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