BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 564  


                                                                    Page  1





          Date of Hearing:  August 10, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 564  
          (Cannella) - As Amended August 4, 2016


           ----------------------------------------------------------------- 
          |Policy       |Water, Parks and Wildlife      |Vote:|14 - 1       |
          |Committee:   |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |Local Government               |     |9 - 0        |
          |             |                               |     |             |
          |             |                               |     |             |
          |-------------+-------------------------------+-----+-------------|
          |             |                               |     |             |
          |             |                               |     |             |
          |             |                               |     |             |
           ----------------------------------------------------------------- 


          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:  This bill creates the North Fork Kings Groundwater  
          Sustainability Agency (Agency) in the counties of Fresno and  
          Kings, and specifies the boundaries, Board composition, powers  
          and duties of the Agency, and adds the Agency to the list of  
          exclusive local agencies created to manage groundwater.   
          Specifically, this bill:  








                                                                     SB 564  


                                                                    Page  2







          1)Adds the Agency to the list of agencies created by statute to  
            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).


          2)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.


          3)Requires the Agency to develop and implement a groundwater  
            sustainability plan (GSP) to achieve sustainable groundwater  
            management within the territory of the Agency.


          4)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.  
            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.
          5)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.


          6)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.


          7)Allows the Agency to establish advisory committees for  








                                                                     SB 564  


                                                                    Page  3





            assisting the board in the development and operation of the  
            GSA and the development and implementation of the GSP.


          8)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, program administration, and a prudent reserve.


          9)Provides that in the event of a conflict between the Agency's  
            Act and SGMA, the provisions of SGMA prevail.


          FISCAL EFFECT:


          Negligible state fiscal impact.  Although a state mandate, costs  
          are not reimbursable because the Agency has authority to levy  
          fees sufficient to cover any costs. 


          COMMENTS:


          1)Purpose. According to the author, "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 for a number of reasons.  The special act  
            agency would include in its governing body traditionally  
            disparate interests, including representatives appointed by  
            the principal land use agency, local agencies providing  








                                                                     SB 564  


                                                                    Page  4





            drinking water to disadvantaged communities, local agencies  
            providing farm water supplies and mutual water companies that  
            provide farm water supplies. Mutual water companies would not  
            be a member of the GSA, but a representative of a mutual water  
            company may be appointed to serve on the governing body. 



            "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 the best governance model for achieving  
            sustainable groundwater management in this area. A GSA that  
            consists of only local agencies would require other interested  
            parties to participate only through attending meetings and  
            reviewing and commenting on the development and implementation  
            of the groundwater sustainability plan.  It will be far better  
            to provide 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  








                                                                     SB 564  


                                                                    Page  5





            "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.  
            SGMA requires local entities in medium- and high-priority  
            basins to establish GSAs by June 2017, to avoid state  
            intervention.  GSAs must self-identify by June 30, 2017, to  
            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 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.


          3)Related Legislation. SB 37(Vidak), before this Committee  
            today, creates the Kings River East Groundwater Sustainability  
            Agency. 


          4)Prior Legislation. SB 1168 (Pavley), Chapter 346, and AB 1738  
            (Dickinson), Chapter 347, the Statutes of 2014, enacted SGMA.













                                                                     SB 564  


                                                                    Page  6








          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081