BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |SB 1262 |Hearing |4/20/16 |
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|Author: |Pavley |Tax Levy: |No |
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|Version: |2/18/16 |Fiscal: |Yes |
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|Consultant|Favorini-Csorba |
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Water supply planning
Increases requirements that new developments must meet in order
to demonstrate that its water supplies are sufficient.
Background
Water Supply Planning for New Development. An urban water
supplier with more than 3,000 customers must adopt an urban
water management plan (UWMP). An important component of a UWMP
is an assessment of water service reliability during normal,
dry, and multiple-dry years. Part of that analysis requires
information about the availability of groundwater supplies.
Cities and counties must consider information provided by water
suppliers when they act on proposals for large-scale
residential, commercial, hotel, industrial, or mixed-use
projects (SB 901, Costa, 1995). Every large-scale development
project-proposing new 500 connections or an equivalent size for
other uses-must have a water supply assessment (SB 610, Costa,
2001), prepared according to the following process. First, a
city or county, at the time that it determines that a
development is subject to the California Environmental Quality
Act (CEQA), must identify any water system that that may supply
water for the project. If the proposed project was included in
the UWMP of one of the identified systems, the water system
prepares the water supply assessment for the project. If the
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projected demand was not accounted for, or the city or county
was not able to identify a water system to serve the project,
the city or county prepares the assessment, in consultation with
the local agency formation commission (LAFCO) and other relevant
water systems.
A water supply assessment must identify any existing water
supply entitlements, water rights, or water service contracts
relevant to the identified water supply for the proposed
project, and describe the quantities of water received in prior
years by the public water system or the city or county through
its water rights or other sources. If a water supply for a
proposed project includes groundwater, the water supply
assessment must include additional information, including a
description of any groundwater basins that will supply the
project, the court or SWRCB order if the basin is adjudicated,
and an analysis of the sufficiency of the groundwater from the
basin or basins. The water supply assessment must be
incorporated into the analysis of the project under the
California Environmental Quality Act (CEQA). LAFCOs then use
the water supply assessment in determining whether to authorize
an annexation or extension of service to the proposed
development.
Greater certainty about water supplies for a proposed
development is required later in the process of approving a
development. Specifically, the Subdivision Map Act requires
cities and counties to demonstrate that a sufficient water
supply is available as a condition in their approval of a
tentative map for a subdivision with more than 500 dwelling
units (SB 221, Kuehl, 2001). Proof of sufficient water must be
based on a written verification from the applicable public water
system. In order to be sufficient, the water supply must be able
to meet the demands of existing and future planned uses in
addition to the subdivision's demand over the next 20 years.
Sustainable Groundwater Management Act. In response to a
multi-year drought, the Legislature enacted the Sustainable
Groundwater Management Act (SGMA) in 2014. Composed of three
bills-AB 1739 (Dickinson), SB 1168 (Pavley) and SB 1319
(Pavley)-SGMA comprehensively reformed California's groundwater
laws. Among other provisions, the Act directs the Department of
Water Resources (DWR) to categorize the state's groundwater
basins into high, medium, low, and very low priorities, based on
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factors such as the population overlying the basin, number of
wells in the basin, and overlying irrigated acreage. DWR must
also identify basins subject to critical overdraft.
Under SGMA, basins designated as high or medium priority must be
managed by a groundwater sustainability agency. That agency
must develop a groundwater sustainability plan (GSP) to ensure
that by 2040, the basin is in a sustainable condition-there can
be no undesirable results (such as land sinking) from use of the
basin. If a basin does not have a groundwater sustainability
agency, or the agency fails to adopt or implement a GSP, the
State Water Resources Control Board may designate the basin as
"probationary" and can develop a plan to achieve sustainability
for the basin.
SGMA also took steps to integrate groundwater considerations
into local planning. A GSP must take into account the most
recent planning assumptions contained in the general plans of
cities and counties overlying the basin, and the GSP must be
provided to the legislative body of those cities and counties.
If the basin is managed pursuant to a court order, SWRCB order,
or SWRCB plan for a probationary basin, that order must be
provided instead of the GSP. Similarly, a city or county that
is proposing to amend its general plan must refer the proposed
amendment to the relevant groundwater sustainability agency for
comment. Some legislators want to also incorporate groundwater
considerations into the water supply planning required for new
developments.
Proposed Law
Senate Bill 1262 requires cities and counties, when making a
determination of water supply sufficiency for a proposed
subdivision that relies in whole or in part on groundwater, to
consider certain plans and information regarding the basin.
Specifically, the city or county must consider the order or
decree adopted by the court or the SWRCB for a basin that has
been adjudicated. For basins that have not been adjudicated, the
city or county must consider:
In high or medium priority basins, the most recently
adopted or revised adopted groundwater sustainability
plan.
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In low or very low priority basins, whether the
Department of Water Resources has identified the basin or
basins as overdrafted or has projected that the basin
will become overdrafted if present management conditions
continue.
The bill allows this information to support the agency's
determination, and also provides that water from a probationary
basin shall not be counted as a water supply.
SB 1262 also makes conforming changes to the information
required in a water supply assessment that includes groundwater
from a non-adjudicated basin. In addition, in the case that the
project relies on water from an overdrafted basin of low or very
low priority, SB 1262 requires the water supply assessment to
include a detailed description of the efforts being undertaken
in the basin or basins to eliminate the overdraft. It also
prohibits hauled water and groundwater from a probationary basin
from being considered a source of water. In addition, if the
water supply for a proposed project includes water that doesn't
meet all primary and secondary drinking water standards, the
following additional information needs to be included:
A detailed description of the concentration of
contaminants in the water.
The proposed method for treating, blending, or otherwise
ensuring that the water will meet drinking water quality
standards.
The project cost to achieve drinking water quality.
An analysis of the affordability of water for the
project's anticipated residents.
SB 1262 also recasts the process for developing water supply
assessments. If a city or county cannot identify a water system
for a proposed project, or if the systems identified are
unwilling to supply water to the project, SB 1262 requires the
city or county to prepare a technical report that includes all
of the following:
The name of each public water system that has a service
area boundary within five miles of the proposed project.
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An analysis of the feasibility of a water system
annexing, connecting, or otherwise supplying domestic water
to the project.
An analysis of the long-term feasibility of creating a
new water system to serve the project, including, but not
limited to, projecting the capacity of anticipated
ratepayers to sustain a water system if there is the
potential that water treatment will be required in the
foreseeable future.
A description of all actions taken by the city or county
to secure a supply of domestic water from an existing
public water system for the project.
A description of all actions taken by the project
proponent to pursue a contract for managerial or
operational oversight from an existing public water system.
If the city or county concludes, based on the technical report,
that it is feasible for a water system to provide water to the
project, SB 1262 requires the city or county submit their
technical report to the relevant LAFCO. If the LAFCO doesn't
approve an annexation or extension of service, the city or
county must develop the water supply assessment for the project.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Cities and counties must already
consider information provided by water suppliers in their
general plans, and California's water supply assessment laws,
enacted through SB 610 and 221, have helped to ensure that new
developments in California have sufficient water supplies.
However, the passage of SGMA in 2014 introduced new plans and
requirements for groundwater extraction, and the
"show-me-the-water" legislation has not yet caught up. In
addition, some loopholes in SB 610 and SB 211 allow new
developments to skirt the requirements for sufficient water
supplies by establishing new systems without consideration of
their long-term sustainability. SB 1262 provides the necessary
updates to harmonize new development approvals with the
requirements of SGMA and creates a process to discourage the
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creation of new water systems when it is geographically and
economically feasible to connect to an existing system.
2. Burdensome requirements . Historically, some developments in
California have proceeded on shaky water supply assumptions.
However, since the passage of SB 610 and SB 221, developments
have been required to demonstrate that they have sufficient
water supplies before receiving the needed land use approvals
from local governments. These laws already require cities and
counties to do water supply assessments if no system is
available to serve the development. SB 1262 adds a new
requirement to prepare a technical report that includes analyses
of future ratepayers ability to pay for a water system before
ground can be broken on a project. It also requires cities and
counties to look at all water systems within five miles of the
proposed development, regardless of whether it makes sense for
those systems to serve the project or not. The costs of this
technical report will be passed along in the form of higher
development fees, potentially creating a disincentive to new,
more water efficient development.
3. Analysis paralysis . Under current law, the water supply
assessment is a part of the CEQA process, which must precede any
LAFCO action on an annexation or extension of services needed to
support a development. SB 1262 upends this process by requiring
a water supply assessment to be prepared after LAFCO has acted
in order to encourage developments to use existing water systems
even when a water system is opposed. But this structure
deprives LAFCOs of important information and potentially creates
a loop within CEQA that cannot be completed. For example, a
city or county may prepare a water supply assessment that
identifies a water system to serve the development, have an
application for annexation be rejected by LAFCO, and then have
to prepare another water supply assessment that must again
identify the same public water system. Retaining the existing
statutory language that governs the order of land use approvals
for new developments may eliminate these issues.
4. Missed connections . SB 1262 intends to ensure that new
developments have sustainable water supplies and ratepayer bases
that can support the long term funding and effective management
of a water system. However, the state's show-me-the-water
statutes only apply to developments with 500 or more
connections. This threshold only covers large developments;
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according to an estimate by CALAFCO, it may only cover half the
growth in the state. It may miss smaller developments that are
in fact more vulnerable to water supply shocks or economic
challenges due to lack of economies of scale. On the other
hand, setting the threshold too low could burden small projects
that tie into an existing system with adequate capacity with no
adverse effects. Under state law, a public water system with
200 or fewer connections is considered a small system and can be
regulated by the county health department instead of the State
Water Resources Control Board. The Committee may wish to
consider amending SB 1262 to lower the threshold for water
supply assessments and verifications to more closely align with
other state laws on water systems.
5. Incoming ! The Senate Natural Resources and Water Committee
approved SB 1262 by a vote of 7-2 on March 29, 2016.
6. Mandate . The California Constitution generally requires the
state to reimburse local agencies for their costs when the state
imposes new programs or additional duties on them. According to
the Legislative Counsel's Office, SB 1262 creates a new
state-mandated local program. SB 1262 provides that if the
Commission on State Mandates determines that this bill contains
a reimbursable mandate, payment to local agencies must be made
pursuant to an existing statutory process.
7. Related legislation . SB 1263 (Wiekowski) increases state
oversight of the formation of new public water systems by
requiring, among other provisions, a potential system to develop
a technical report on its water sources and future costs.
Support and
Opposition (4/14/16)
Support : Clean Water Action; Community Water Center; Desert
Water Agency; Leadership Counsel for Justice and Accountability;
Planning and Conservation League; Sierra Club California; Valley
Ag Water Coalition.
Opposition : California Apartment Association; California
Association of Realtors; California Building Industries
Association; California Business Properties Association;
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California Chamber of Commerce; California Independent Petroleum
Association.
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