BILL ANALYSIS Ó SB 564 Page 1 Date of Hearing: June 28, 2016 ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE Marc Levine, Chair SB 564 (Cannella) - As Amended June 16, 2016 SENATE VOTE: 30-2 SUBJECT: West Kings Groundwater Sustainability Agency Act SUMMARY: Creates the West Kings 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 Kings to be known as the West Kings 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 SB 564 Page 2 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. SB 564 Page 3 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. SB 564 Page 4 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 West Kings 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. SB 564 Page 5 1)Author's Statement: It was the expressed intent of the Legislature in writing SGMA to manage groundwater basins through the actions of local governmental agencies to the greatest extent feasible. This legislation, in creating a special act agency to serve as the GSA for an area encompassing 265 square miles, is fully consistent with legislative intent. The goal of this legislation is to provide 'a seat at the table' for all of the entities that have a stake in sustainable groundwater management in this area. This approach offers equal and equitable access to the decision making process. 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 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 SB 564 Page 6 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. Prevents formation of other GSA's: To date, no entity has stepped forward to be the GSA for the area defined in this bill. Designating West Kings Groundwater Sustainability Agency as the exclusive local agency will exclude any other eligible entity from coming forward to be the GSA in this portion of the Kings Subasin. 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, Double Referral, and Potential Amendments: A portion of this bill amends the same code section as SB 37 (Vidak) Kings River East Groundwater Sustainability Agency. SB 37 will be heard in this committee at the same June 28, 2016 hearing as this bill and if this bill it should pass will SB 564 Page 7 be re-referred to Assembly Local Government Committee. Committee staff suggests that these bills be amended to address their chaptering out conflicts. Committee staff is aware that there are discussions on potential amendments to provide for greater representation for environmental justice organizations, and other revisions to provide for specific expertise of some board representatives, and provide for greater flexibility as to how the board must be constructed as conditions change. 3)Prior and Related Legislation: a. SB 37 (Vidak), would establish Kings River East Groundwater Sustainability Agency. To be heard in this committee on June 28, 2016. b. SB 1168 (Pavley), Chapter 346, Statutes of 2014, enacted SGMA. c. AB 1738 (Dickinson), Chapter 347, Statutes of 2014, enacted SGMA. 4)Supporting Arguments: This bill is the best way to implement SGMA for our area. For over a year there has been a collaborative process with public agencies, landowners, the counties and the local communities engaged in how the water agencies, the landowners, the counties and the disadvantaged communities can work together to develop a GSA. It is the intent of all the interested parties to work cooperatively to solve groundwater issues within our subbasin and to develop the governance structure that will facilitate implementing a GSP. SB 564 Page 8 REGISTERED SUPPORT / OPPOSITION: Support Burrel Ditch Company Clark's Fork Reclamation District #2069 Liberty Mill Race Co. Liberty Water District Riverdale Public Utility District Stinson Canal & Irrigation Co. Upper San Jose Water Company Opposition None on File SB 564 Page 9 Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916) 319-2096