BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON GOVERNANCE AND FINANCE
                         Senator Robert M. Hertzberg, Chair
                                2015 - 2016  Regular 

                              
          
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          |Bill No:  |SB 1317                          |Hearing    |4/20/16  |
          |          |                                 |Date:      |         |
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          |Author:   |Wolk                             |Tax Levy:  |No       |
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          |Version:  |2/19/16                          |Fiscal:    |Yes      |
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          |Consultant|Favorini-Csorba                                       |
          |:         |                                                      |
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               Conditional use permit:  groundwater extraction facility



          Requires cities and counties overlying certain groundwater  
          basins to establish processes for the conditional permitting of  
          wells.


           Background 

           Land Use Regulation. The California Constitution allows a city  
          to "make and enforce within its limits, all local, police,  
          sanitary and other ordinances and regulations not in conflict  
          with general laws."  It is from this fundamental power (commonly  
          called the police power) that local governments derive their  
          authority to regulate behavior to preserve the health, safety,  
          and welfare of the public-including land use authority.  

          The Planning and Zoning Law allows cities and counties to adopt  
          zoning ordinances that regulate private behavior to achieve  
          public goals. Some local ordinances provide "ministerial"  
          processes for approving projects-the zoning ordinance clearly  
          states that a particular use is allowable, and local government  
          does not have any discretion regarding approval of the permit if  
          the application is complete.  Local governments have two options  
          for providing landowners with relief from zoning ordinances that  
          might otherwise prohibit or restrict a particular land use:  
          variances and conditional use permits.  A variance may be  
          granted to alleviate a unique hardship on a property owner  







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          because of the way a generally-applicable zoning ordinance  
          affects a particular parcel, and a conditional use permit allows  
          a land use that is not authorized by right in a zoning  
          ordinance, but may be authorized if the property owner takes  
          certain steps, such as to mitigate the potential impacts of the  
          land use.  Both of these processes require hearings by the local  
          zoning board and public notice of those hearings.

          While ministerial processes are not subject to the California  
          Environmental Quality Act (CEQA), a conditional use permit can  
          be subject to CEQA if they would result in a project because the  
          approving agency can exercise some discretion over the permit.  

          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  
          factors such as the population overlying the basin, number of  
          wells in the basin, and overlying irrigated acreage.  The DWR  
          must also identify basins subject to critical overdraft-where  
          more water is consistently being removed than replaced.

          Under SGMA, basins designated as high or medium priority must be  
          managed by a groundwater sustainability agency (GSA).  That  
          agency must develop a groundwater sustainability plan 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 GSA or the agency fails to  
          adopt or implement a plan, the State Water Resources Control  
          Board may designate the basin as "probationary" and can develop  
          its own plan to achieve sustainability for the basin. The  
          deadlines for GSAs to adopt their plans vary by basin: high and  
          medium priority basins in critical overdraft must adopt a plan  
          by January 31, 2020; other high and medium priority basins have  
          until January 31, 2022.

          SGMA grants GSAs substantial new authorities to regulate  
          groundwater use within their jurisdiction, including to impose  
          fees to fund groundwater sustainability programs and to  
          regulate, limit, or suspend:








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                 Extractions from individual groundwater wells or  
               extractions from groundwater wells in the aggregate.
                 Construction of new groundwater wells.
                 Enlargement of existing groundwater wells.
                 Reactivation of abandoned groundwater wells.

          However, SGMA also states that counties have authority over well  
          permitting unless that authority is specifically delegated to a  
          GSA, and that nothing in SGMA impairs the land use authority of  
          cities and counties. 

          Some counties have already used their police power to regulate  
          groundwater use.  Prior to the adoption of SGMA, 30 of  
          California's 58 counties have ordinances regulating groundwater  
          in some manner.  At least four counties have recently imposed  
          moratoria on drilling new water wells of varying durations,  
          while others have considered and rejected moratoria.  Stanislaus  
          County recently updated its groundwater ordinances to require an  
          application for a new well to show that it will not negatively  
          affect the county's groundwater supplies.  

          Some advocates who are concerned about the impacts of  
          groundwater pumping want to limit the potential undesirable  
          results from new groundwater extraction facilities.

           Proposed Law

           Senate Bill 1317 requires a city or county overlying a basin  
          designated as a high- or medium-priority basin to establish a  
          process by July 1, 2017 for the issuance of a conditional use  
          permit for the development of a groundwater extraction facility.  
           The permit must impose conditions to prevent the facility from  
          contributing to or creating an undesirable result.  Those cities  
          and counties must also prohibit the issuance of a conditional  
          use permit for a new groundwater extraction facility in either a  
          probationary basin or an overdrafted basin. Cities and counties  
          overlying low- or very low-priority basins can adopt processes  
          in accordance with the bill's provisions, but are not required  
          to.  

          SB 1317 exempts from the conditional use permitting process (1)  
          a person that extracts less than two acre-feet a year of water  
          for domestic purposes, and (2) new facilities that replace  
          existing facilities with the same or less capacity.








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          SB 1317 requires cities and counties to review applications for  
          groundwater extraction facilities under the timelines  
          established by the Permit Streamlining Act and to charge fees  
          that are determined according to existing statutory rules.   
          Cities and counties that have ordinances in place by January 1,  
          2017 that comply with the bill do not have to enact a new  
          ordinance.


           State Revenue Impact

           No estimate.


           Comments

           1.  Purpose of the bill  . SGMA was an important step towards  
          sustainable management of California's groundwater resources.   
          Yet the requirements in SGMA to develop and implement  
          groundwater sustainability plans do not go into effect until  
          2020 or later.  Meanwhile, the Department of Water Resources has  
          identified 21 critically overdrafted basins, and new  
          agricultural operations continue to spring up, supplied by new  
          wells.  In many counties, little consideration is given to the  
          harm that a new well might do to a groundwater basin.  SB 1317  
          requires local governments to carefully examine the consequences  
          of new wells in basins that are already threatened by excessive  
          groundwater extraction.  SB 1317 ensures that groundwater  
          extraction will not cause irrecoverable losses in storage space,  
          subsidence and the associated damage to infrastructure, or other  
          undesirable results.

          2.  One size doesn't fit all  . SGMA was very carefully crafted to  
          maintain local control over groundwater management and stated  
          the Legislature's intent to recognize and preserve the authority  
          of cities and counties to manage groundwater pursuant to their  
          police powers.  Local governments have already begun to  
          implement local regulations where they make sense in advance of  
          SGMA's requirements.  But in other areas, it may be necessary to  
          temporarily use water from overdrafted or probationary basins  
          based on specific local conditions, such as the local economy.   
          Local governments are best positioned to understand these needs  
          and have the tools necessary to act on them through their police  








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          powers and the authorities granted to GSAs.  SGMA further  
          provided local agencies with sufficient time to complete the  
          necessary studies to understand their basin conditions and  
          carefully assess the best ways to bring their basins into  
          balance. SB 1317 takes control away from local agencies before  
          they have had a chance to act by requiring them to implement  
          specific regulations.  It upsets the carefully negotiated  
          balance in SGMA regarding (1) state versus local regulations and  
          (2) acting quickly to address groundwater problems versus giving  
          local agencies enough time to act.  It also potentially creates  
          significant regulatory uncertainty and lengthy delays by  
          introducing CEQA analysis into what is usually a straightforward  
          process for receiving a permit. Finally, it may set a precedent  
          for additional state interference in local land use decisions.

          3.  Sunset  . SGMA requires GSAs to develop and begin implementing  
          plans for achieving sustainability in the groundwater basins  
          they manage by January 31, 2022-or earlier if the basin is  
          critically overdrafted.  At that time, GSAs will be responsible  
          for regulating groundwater use to avoid undesirable results, and  
          SGMA provided those agencies with additional enforcement tools.   
          Accordingly, state-imposed restrictions on well drilling may be  
          unnecessary and could create conflict with the authority granted  
          to GSAs.  The Committee may wish to amend SB 1317 to sunset on  
          January 31, 2022 or once a groundwater sustainability agency has  
          begun to implement its groundwater sustainability plan,  
          whichever comes first.

          4.   Left out to dry  . Some disadvantaged communities in  
          California currently rely on substandard wells that do not have  
          enough pressure to provide safe, adequate drinking water  
          supplies.  SB 1317 could prohibit efforts to enlarge these  
          wells, leaving some communities without options for new water  
          supplies.  The Committee may wish to amend SB 1317 to add an  
          exemption for new wells drilled to provide drinking water to  
          systems that both serve disadvantaged communities and have had a  
          recent violation of drinking water standards.

          5.  Clarifying amendments  . The Committee may wish to consider the  
          following clarifying amendments that further the intent of the  
          bill:

                 SB 1317 requires cities and counties to adopt ordinances  
               that establish a process for the issuance of conditional  








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               use permits for groundwater extraction facilities, but does  
               not explicitly prohibit the development of groundwater  
               extraction facilities without a valid permit.  The  
               Committee may wish to consider amending SB 1317 to include  
               such a prohibition.

                 SB 1317 requires cities and counties to prohibit the  
               issuance of a conditional use permit for a new groundwater  
               extraction facility in probationary basins and overdrafted  
               basins.  However, this could be interpreted to simply  
               require ministerial, non-discretionary permit for such  
               facilities.  The Committee may wish to consider amending SB  
               1317 to simply prohibit the construction of wells in these  
               basins through a general law instead of requiring  
               individual cities and counties to act.

                 SB 1317 applies to adjudicated basins, which are managed  
               according to a court order, while SGMA does not.  Since  
               these basins are already managed to provide a safe yield of  
               groundwater production, the Committee may wish to consider  
               amending SB 1317 to exempt cities and counties that overlie  
               adjudicated basins from the requirements of the bill.

          6.   Charter cities  .  The California Constitution allows cities  
          that adopt charters to control their own "municipal affairs."   
          In all other matters, charter cities must follow the general,  
          statewide laws.  Because the Constitution doesn't define  
          "municipal affairs," the courts determine whether a topic is a  
          municipal affair or whether it's an issue of statewide concern.   
          SB 1317 says that its statutory provisions apply to charter  
          cities.  To support this assertion, the bill includes a  
          legislative finding and declaration that preventing undesirable  
          results in a high- or medium-priority basin is a matter of  
          statewide concern.

          7.  Incoming  ! The Senate Natural Resources and Water Committee  
          approved SB 1317 by a vote of 6-2 on April 12, 2016.

          8.  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 1317 creates a new  
          state-mandated local program.  But SB 1317 disclaims the state's  
          responsibility for reimbursing local agencies by including  








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          findings and declarations that local agencies may levy fees to  
          cover the costs of the program.


           Support and  
          Opposition   (4/14/2016)


           Support  :  AZUL; California League of Conservation Voters; Clean  
          Water Action; Community Water Center; Food and Water Watch;  
          Leadership Counsel for Justice and Accountability; Lutheran  
          Office of Public Policy in California; Natural Resources Defense  
          Council; The Nature Conservancy; Planning and Conservation  
          League; Union of Concerned Scientists; Wholly H2O.

           Opposition  :  Agricultural Council of California; Association of  
          California Water Agencies; California Association of Winegrape  
          Growers; California Cattlemen's Association; California Chamber  
          of Commerce; California Citrus Mutual; California Cotton Ginners  
          and Growers Association; California Dairies, Inc.; California  
          Farm Bureau Federation; California Fresh Fruit Association;  
          California Groundwater Association; California League of Food  
          Processors; California Mutual Utilities Association; California  
          State Association of Counties; County of Kern; County of Merced;  
          County of Sacramento; County of San Joaquin; Desert Water  
          Agency; League of California Cities; Nisei Farmers League; Rural  
          County Representatives of California; Western Agricultural  
          Processors Association; Western Growers Association; Western  
          Plant Health Association. 


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