BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  June 28, 2016


                  ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE


                                 Marc Levine, Chair


          SB  
          37 (Vidak) - As Amended June 21, 2016


          SENATE VOTE:  37-0


          SUBJECT:  Kings River East Groundwater Sustainability Agency Act


          SUMMARY:  Creates the Kings River East Groundwater  
          Sustainability Agency, specifies the boundaries, Board  
          composition, powers and duties, and adds the Agency to the list  
          of exclusive local agencies created to manage groundwater.   
          Specifically, this bill:


          1)Creates a groundwater management agency in the Counties of  
            Fresno and Tulare to be known as the Kings River East  
            Groundwater Sustainability Agency (Agency).


             a)   Defines the boundaries of the Agency.


             b)   Provides that the Agency is governed by a Board  
               consisting of seven members, as specified.


          2)Adds the Agency to the list of agencies created by statute to  








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            manage groundwater that are deemed the exclusive local  
            agencies within their respective statutory boundaries with  
            powers to comply with the Sustainable Groundwater Management  
            Act (SGMA).


          3)Requires the Agency to be a groundwater sustainability agency  
            (GSA), pursuant to existing law, for that portion of the Kings  
            Subbasin that lies within the boundaries of the Agency.


          4)Requires the Agency to develop and implement a groundwater  
            sustainability plan (GSP), pursuant to existing law, to  
            achieve sustainable groundwater management within the  
            territory of the Agency.


          5)Provides that the Agency only has the powers granted by this  
            Act and SGMA, for purposes 


          of groundwater management within the boundaries of the Agency,  
            together with any other powers as are reasonably implied,  
            necessary, and proper to carry out the objectives and purposes  
            of the Agency to implement SGMA.  Requires the agency to abide  
            by the rules and regulation promulgated by the Department of  
            Water Resources (DWR) and the State Water Resources Control  
            Board (SWRCB) to implement SGMA
          6)Allows the board to adopt ordinances for the purpose of  
            regulating, conserving, managing, and controlling the use and  
            extraction of groundwater within the territory of the Agency.


          7)Permits the Agency to exclude from any of the requirements of  
            the act, or the operation of any ordinance, any operator who  
            annually extracts less than a minimum amount of groundwater as  
            specified by an ordinance adopted by the board.










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          8)Requires the Agency to enter into a coordination agreement  
            with other local agencies for purposes of coordinating the  
            Agency's plan with other agencies or GSP's within the Kings  
            Subbasin, as required by SGMA.


          9)Allows, pursuant to SGMA, the Agency to impose fees,  
            including, but not limited to, permit fees and fees on  
            groundwater extraction or other regulated activity, to fund  
            the costs of a groundwater sustainability program, that  
            include, but are not limited to, the preparation, adoption,  
            and amendments of a groundwater sustainability plan,  
            investigations, inspections, compliance assistance,  
            enforcement, and program administration, including a prudent  
            reserve.


          EXISTING LAW:   


          1)Requires the DWR to evaluate groundwater basins and designate  
            them as high, medium, low or very low, according to various  
            factors including, but not limited to, level of dependence  
            upon the basin by municipal and agricultural users.



          2)Requires that local agencies in high- and medium-priority  
            basins subject to SGMA form one or more GSAs by June 30, 2017.



          3)Allows any local agency or combination of local agencies  
            overlying a groundwater basin to elect to be a groundwater  
            sustainability agency for that basin, except as specified.


          4)Requires that GSAs in basins with chronic overdraft develop  
            and adopt a GSP for their basin by January 31, 2020.  








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          5)Defines the Kings basin in the San Joaquin Valley to be in  
            chronic overdraft.



          6)Requires that GSAs in all other high- and medium-priority  
            basins subject to SGMA develop and adopt a GSP by January 31,  
            2022.



          7)Requires the DWR to draft and adopt emergency regulations for  
            the evaluation of GSPs, the implementation of GSPs, and  
            coordination agreements by June 1, 2016.



          8)Provides GSAs with optional tools for reaching sustainability  
            including, but not limited to, the ability to conduct  
            investigations, collect fees, limit pumping, require  
            measurement and reporting of groundwater extractions, monitor  
            compliance, charge civil penalties for violations, and  
            implement plans and programs to recharge a basin.



          FISCAL EFFECT:  Unknown.


          COMMENTS:  Creates the Kings River East Groundwater  
          Sustainability Agency, specifies the boundaries, Board  
          composition, powers and duties, and adds the Agency to the list  
          of exclusive local agencies created to manage groundwater. 









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          1)Author's Statement: SGMA requires local agencies to manage  
            groundwater basins in a sustainable manner and provides local  
            agencies the ability to develop plans and implement strategies  
            to sustainably manage groundwater resources.  Establishing a  
            sustainability agency as required by SGMA, authorizes any  
            local agency or a combination of local agencies to elect to be  
            a GSA through a joint powers agreement, memorandum of  
            agreement, or a water corporation.  The act leaves no room for  
            a private, non-profit, or unelected member of the public to  
            sit on a GSA as a voting member.  SB 37 will create the Kings  
            River East Groundwater Sustainability Agency as a special act  
            district.  The GSA will cover an area in Fresno and Tulare  
            counties east of the Kings River, including all of the cities  
            of Dinuba, Orange Cove, and Reedley as well as the communities  
            of Cutler, East Orosi, London, Orosi, and Sultana. SB 37  
            provides that the GSA shall only have the ability to carry out  
            the powers provided in SGMA.  Additionally, the creation of  
            this district will not pose challenges to other GSAs in terms  
            of coordination because of requirements under SGMA for  
            multiple plans implemented by multiple GSAs within a basin to  
            be coordinated pursuant to a single coordination agreement.



          2)Background:   SGMA requires the development of a local process  
            to sustainably manage groundwater. Specifically, in all SGMA  
            regulated basins GSAs must be formed by June 30, 2017, GSPs  
            for critically overdrafted basins must be written by 2020, and  
            sustainability must be reached by 2040 (the timeline is two  
            years later for all other basins).  
            Prior to SGMA, there were several ways that groundwater was  
            managed at the local level. 


            A local agency that provided water service was authorized to  
            develop and implement a groundwater management plan, known as  
            AB 3030 plans.  The Legislature also created a number of  
            "special act special districts" that addressed groundwater  








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            management - these local agencies were created via statute to  
            establish unique governance structures and grant powers that  
            were customized to the problems and solutions of a particular  
            groundwater basin.  
            Local Control under SGMA:  GSAs must self-identify by June 30,  
            2017, to the DWR, and can include a city, a county, a special  
            district, or a combination of these agencies organized via a  
            legal agreement, like a Joint Powers Authority (JPA) or  
            Memorandum of Agreement (MOA).  One agency can form a GSA for  
            the entire basin, or multiple agencies can form individual  
            GSAs and coordinate for basin sustainability.  There are  
            multiple options for local agencies to manage groundwater  
            under SGMA, including alternatives to forming a GSA and  
            developing a GSP.  SGMA does not specify exactly how GSAs  
            should govern local groundwater resources to achieve  
            sustainability goals.  


            All groundwater basins designated as medium- or high-priority,  
            and identified as subject to critical conditions of overdraft,  
            must be managed under one or more GSPs by January 31, 2020.  
            The Kings Subbasin that is the subject of this bill has been  
            designated to be in a state of critical overdraft.


            Kings River East GSA: On March 28, 2016, Alta Irrigation  
            District filed paperwork with the DWR on behalf of the to-be  
            created Kings River East Groundwater Sustainability Agency, in  
            order to notify the DWR that Kings River East would like to  
            serve as the GSA for a portion of the Kings Subbasin of the  
            San Joaquin Valley Basin. The notice to the DWR says that "all  
            of those local agencies, acting as interested parties, have  
            entered into a Memorandum of Understanding to form the Kings  
            River GSA,?. in the MOU, such interested parties commit to  
            forming either (i) a special act district, or (ii) a joint  
            powers authority to implement the GSA."


            The notice to the DWR also states:








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            "On March 17, 2016, the Kings River East held a public hearing  
            to consider serving as the GSA.  The signed MOUs state the  
            intent of the parties to form the GSA.  The District did not  
            receive any written comments prior to the hearing.   
            Furthermore, at that public hearing, the Kings River East did  
            not receive any comments or conditions objecting to or  
            criticizing the formation of the Kings River East GSA.   
            Section 6 of the MOU, regarding the GSA Governing Body,  
            specifies and describes the governance structure for the Kings  
            River East GSA."


            The notice to the DWR also references this bill, the intent of  
            which is to establish a special act district.


            Powers and Duties: This bill specifies that Kings River East  
            shall exercise powers granted by this act and SGMA that are  
            reasonably implied, necessary, and proper to implement SGMA.   
            The bill further specifies that the board may adopt ordinances  
            for the purpose of regulating, conserving, managing, and  
            controlling the use and extraction of groundwater and give the  
            agency the ability to exclude groundwater extraction  
            operators.


            Chaptering Out:  A portion of this bill amends the same code  
            section as SB 564 (Cannela) West Kings Groundwater  
            Sustainability Agency.  SB 564 will be heard in this committee  
            at the same June 28, 2016 hearing as this bill.  Committee  
            staff suggests that these bills be amended to address their  
            chaptering out conflicts. 


          3)Prior and Related Legislation: 










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               a)     SB 564 (Cannela), would establish West Kings  
                 Groundwater Sustainability Agency.



               b)     SB 1168 (Pavley), Chapter 346, the Statutes of 2014,  
                 enacted SGMA.
               c)     AB 1738 (Dickinson), Chapter 347, the Statutes of  
                 2014, enacted SGMA.


          4)Supporting Arguments: The Kings River East working group has  
            engaged in a collaborative process to determine how irrigation  
            districts, cities, counties, agricultural, and disadvantaged  
            communities can come together to develop a GSA.  Kings River  
            East has proven its intent to work with its neighbors within  
            the same groundwater basins though the signing of MOUs in  
            order to comply with SGMA regulations including complimentary  
            GSP's.  A one size fits all approach to SGMA will not be  
            successful but the passage of this bill would signal the  
            confidence that the state has in local agencies to create  
            groundwater sustainability amongst the diverse conditions that  
            exist in our aquifers.


          5)Opposing Arguments: This bill proposes a new local agency with  
            unknown powers, as a result, remaining sustainable groundwater  
            agencies within the Kings Basin may be at a disadvantage when  
            developing the basin-wide plan.  If the new agency is granted  
            specific or implied powers and authorities beyond and/or  
            different than those of other agencies within the basin,  
            coordination will be difficult and the potential for conflict  
            increased.  SGMA provides for a variety of alternatives for  
            coordinated governance and management of groundwater within a  
            basin.  Alternatives to this agency should be thoroughly  
            explored prior to the creation of a redundant sustainable  
            groundwater agency in Kings Basin.  Until alternatives are  
            considered it is premature to establish a new special agency  
            in order to achieve sustainability of groundwater resources  








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            within the East Kings area.  The creation of this agency may  
            potentially compromise the interests of other local agencies  
            and key stakeholders in the area.  


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Alta Irrigation District 


          Association of California Water Agencies


          California Association of Realtors


          California Citrus Mutual


          City of Dinuba


          City of Orange Cove


          City of Reedley


          Community Water Center


          Cutler Public Utility District









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          Gillette Citrus, Inc.


          Hills Valley Irrigation District


          Kings County Water District


          Kings River Water District


          London Community Services District


          Orange Cove Irrigation District


          Orosi Public Utility District


          Peltzer Enterprises


          Sultana Community Services District


          Tulare County Board of Supervisors


          Tulare County Farm Bureau















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          Opposition


          Fresno Irrigation District (To previous version)




          Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916)  
          319-2096