BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: SB 1328
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|Author: |Lara |
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|Version: |3/28/2016 |Hearing |4/20/2016 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Joanne Roy |
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SUBJECT: Stormwater capture and treatment projects: funding
ANALYSIS:
Existing law:
1) Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury, requires all moneys, except for fines and
penalties, collected pursuant to a market-based mechanism be
deposited in the fund and requires the Department of Finance,
in consultation with California Air Resources Board (ARB) and
any other relevant state agency, to develop, as specified, a
three-year investment plan for the moneys deposited in the
GGRF. (Government Code §16428.8).
2) Prohibits the state from approving allocations for a measure
or program using GGRF moneys except after determining that
the use of those moneys furthers the regulatory purposes of
AB 32, and requires moneys from the GGRF be used to
facilitate the achievement of reductions of GHG emissions in
California. (Health and Safety Code §39712).
3) Establishes the Stormwater Resource Planning Act, which
authorizes one or more public agencies to develop a
stormwater resource plan that meets specified standards to
address the capture, treatment, and storage of stormwater and
dry weather runoff. (Water Code §10560 et seq.).
This bill:
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1) Authorizes the State Water Resources Control Board (SWRCB) to
provide grants to public agencies to implement stormwater and
dry runoff collection and treatment projects that are
intended to reduce GHG emissions by decreasing demand for
electricity needs to pump, transport, and deliver water from
natural resources to consumers.
2) Authorizes SWRCB to expend moneys from GGRF, upon
appropriation of the Legislature for these grants.
3) Provides that eligible projects for funding include, but not
be limited to, green infrastructure, rainwater, stormwater,
and dry weather runoff capture projects, and stormwater
treatment facilities.
4) Specifies that grant funds may be used for all phases of
planning, design, and project construction and
implementation.
5) Requires SWRCB to establish criteria for funding projects
based on demonstration of GHG emissions reductions and
geographic conditions that facilitate stormwater and dry
weather runoff collection.
6) Requires SWRCB to give preference to projects located in, and
provide benefits to, disadvantaged communities.
Background
1) Water and energy use.
According to the California Energy Resources Conservation and
Development Commission (CEC), water-related energy use in the
state consumes approximately 20% of the state's electricity
and 30% of the state's non-power plant natural gas (natural
gas not used to produce electricity). The water sector uses
electricity to pump, treat, transport, deliver, and heat
water. CEC also found that the most energy-intensive uses of
water in California are associated with end uses by the
customer (e.g. heating, processing, and pressurizing water),
and 75% of the electricity and nearly all of the natural gas
use related to water in California is associated with water
heating. Additionally, expected increases in groundwater
pumping, water treatment, and water recycling, due to drought
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conditions in the state, mean the energy intensity of water
will likely increase.
According to the U.S. Environmental Protection Agency, energy is
used in five stages in the water cycle:
a) Extracting and conveying: Extracting water from rivers
and streams or pumping it from aquifers, and then
conveying it over hills and into storage facilities is a
highly energy intensive process. In California, the State
Water Project (SWP) pumps water almost 2,000 feet over the
Tehachapi Mountains. The SWP is the largest single user
of energy in the state and consumes an average of 5
billion kWh/yr, accounting for about 2-3% of all
electricity consumed in California.
b) Treating water: Water treatment facilities use energy
to pump and process water.
c) Distributing water: Energy is needed to transport
water.
d) Using water: End users consume energy to treat water
with softeners or filters, to circulate and pressurize
water with circulation pumps and irrigation systems, and
to heat and cool water.
e) Collecting and treating wastewater: Energy is used to
pump wastewater to the treatment plant, and to aerate and
filter it at the plant. On average, wastewater treatment
in California uses 500 to 1,500 kilowatt-hours per
acre-foot.
By reducing the amount of water we use, we lessen our demand
on the energy-intensive systems that deliver and treat water.
2) Stormwater.
According to the U.S. Environmental Protection Agency,
stormwater runoff is a major cause of water pollution in
urban areas. When rain falls on roofs, streets, and parking
lots in cities and their suburbs, the water cannot soak into
the ground as it should. Stormwater drains through gutters,
storm sewers, and other engineered collection systems and is
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discharged into nearby water bodies. The stormwater runoff
carries trash, bacteria, heavy metals, and other pollutants
from the urban landscape. Higher flows resulting from heavy
rains also can cause erosion and flooding in urban streams,
damaging habitat property and infrastructure. When rain
falls in natural, undeveloped areas, the water is absorbed
and filtered by soil and plants - Stormwater runoff is
cleaner and less of a problem.
According to SWRCB, past approaches to stormwater management
have focused on limited treatment prior to conveyance
off-site and ultimately into receiving waters. The municipal
separate storm sewer systems and flood control infrastructure
used for this purpose may have been successful in terms of
flood control and some degree of treatment; however many past
approaches have not been adequate to fully address the water
quality impacts of stormwater discharges while providing
multiple benefits such as water supply augmentation and
ecological enhancement of the local watershed. In general,
the transport of stormwater from the location of rainfall via
constructed municipal storm drain systems (pipelines,
reinforced channels, outfalls, etc.) has caused downstream
hydromodification (unnatural alteration of natural drainage
features) and destabilization of water bodies, and impacted
beneficial uses of those receiving surface water bodies.
More recent approaches to stormwater management seek to
replicate natural hydrology and watershed processes by
managing stormwater and dry weather runoff onsite or within
the watershed where rainfall occurs - and the pollutants it
contains - delivered to receiving waters.
3) Storm Water Grant Program (SWGP).
According to SWRCB, the purpose of SWGP is to fund stormwater
and dry weather runoff projects that best advance SWRCB's
policy goals of improving water quality and realizing
multiple benefits from the use of stormwater and dry weather
runoff as a resources. The SWGP Unit was established after
the passage of Proposition 84, the Safe Drinking Water, Water
Quality and Supply, Flood Control, River and Coastal
Protection Bond Act of 2006. In November 2014, California
voters approved Proposition 1 (Prop. 1), Water Quality,
Supply and Infrastructure Improvement Act of 2014 (AB 1471,
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Rendon). Of the $7.545 billion in general obligation bonds
for water projects, Prop. 1 provides $200 million in grants
for multi-benefit stormwater management projects.
4) Executive Order B-29-15.
Executive Order B-29-15 (Brown), issued April 1, 2015, directed
state agencies to perform various actions regarding saving
water to respond to severe drought conditions in the state,
including directing CEC, jointly with DWR, to implement a
Water Energy Technology (WET) program to deploy innovative
water management technologies that achieve water and energy
savings and GHG emissions reductions - projects must have
direct water savings, direct energy savings, and reduce GHG
emissions. In addition, projects must reduce water use or
improve water production. The Executive Order also directed
CEC, jointly with DWR, to implement a limited statewide
appliance rebate program for inefficient appliances.
5) Water-Energy Grant Program.
The Water-Energy Grant Program provides funds to implement water
efficiency programs or projects that reduce GHG emissions,
and reduce water and energy use. The funding for this
program is appropriated from GGRF to DWR to establish a grant
program; available funding is $19 million (with an additional
$10 million that may be available). Eligible applicants
include local agencies, joint power authorities, and
nonprofit organizations. DWR is proposing to focus the 2016
solicitation on the following eligible programs/projects:
Commercial Water Efficiency or Institutional Water
Efficiency Programs.
Projects that reduce GHG, reduce water and energy
use.
Only projects with water conservation measures
that also save energy.
1) Cap-and-trade auction revenue.
Since November 2012, ARB has conducted 14 cap-and-trade
auctions, generating over $4 billion in proceeds to the
state.
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State law specifies that the auction revenues must be used to
facilitate the achievement of GHG emissions reductions and
outlines various categories of allowable expenditures.
Statute further requires the Department of Finance, in
consultation with ARB and any other relevant state agency, to
develop a three-year investment plan for the auction
proceeds, which are deposited in the GGRF.
Disadvantaged communities.
SB 535 (de León, Chapter 830, Statutes of 2012) requires the
Department of Finance, in the investment plan, to allocate at
least 25% of available moneys in the GGRF to projects that
provide benefits to disadvantaged communities, and at least
10% to projects located within disadvantaged communities.
To meet the SB 535 mandate, the Office of Environmental
Health Hazard Assessment, under CalEPA's guidance, developed
a tool (termed CalEnviroScreen) to assess and rank census
tracts across the state that are disproportionately affected
by multiple types of pollution and areas with vulnerable
populations. CalEPA has designated 25% of census tracts in
California as disadvantaged communities for the purpose of
investing cap-and-trade proceeds.
Additionally, SB 862 (Committee on Budget and Fiscal Review,
Chapter 36, Statutes of 2014) requires ARB to develop
guidelines on maximizing benefits for disadvantaged
communities by agencies administering GGRF funds.
Legal consideration of cap-and-trade auction revenues.
The 2012-13 Budget analysis of cap-and-trade auction revenue
by the Legislative Analyst's Office noted that, based on an
opinion from the Office of Legislative Counsel, the auction
revenues should be considered mitigation fee revenues, and
their use requires that a clear nexus exist between an
activity for which a mitigation fee is used and the adverse
effects related to the activity on which that fee is levied.
Therefore, in order for their use to be valid as mitigation
fees, revenues from the cap-and-trade auction must be used to
mitigate GHG emissions or the harms caused by GHG emissions.
In 2012, the California Chamber of Commerce filed a lawsuit
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against the ARB claiming that cap-and-trade auction revenues
constitute illegal tax revenue. In November 2013, the
superior court ruling declined to hold the auction a tax,
concluding that it is more akin to a regulatory fee. In
February of 2014, the plaintiffs filed an appeal with the 3rd
District Court of Appeal in Sacramento. That case is
currently pending.
Budget allocations.
SB 862 (Committee on Budget and Fiscal Review, Chapter 36,
Statutes of 2014) established a long-term cap-and-trade
expenditure plan by continuously appropriating portions of
the funds for designated programs or purposes. The
legislation appropriates 25% for the state's high-speed rail
project, 20% for affordable housing and sustainable
communities grants, 10% to the Transit and Intercity Rail
Capital Program, and 5% for low-carbon transit operations.
The remaining 40% is available for annual appropriation by
the Legislature.
The Governor's proposed 2016-17 budget allocates $3.1 billion
GGRF revenues to a variety of transportation, energy, and
resources programs aimed at reducing GHG emissions.
Comments
1) Purpose of Bill.
According to the author:
SB 1328 provides much needed assistance for the increased
deployment of stormwater capture and groundwater recharge
facilities. Groundwater, which is located in geologic
formations called aquifers, is an important piece of
California's water supply, and is utilized for urban and
rural cities' water systems, agricultural irrigation, and
industry uses.
Aquifers recharged naturally over time via the percolation
of stormwater through the soil, in addition to seepage from
rivers and creeks. Disruption of the natural recharge
cycle of aquifers has been caused by overdrafting, which
occurs when water is extracted beyond the safe yield of an
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aquifer.
Reduced groundwater levels impact communities in urban and
rural areas in regards to water access, quality, and
affordability, as the reliance on water imports, either by
conveyance system or transported by trucks, is increased.
Despite the availability of Water Bond funds for stormwater
infrastructure there are still significant barriers to
increased implementation of stormwater projects. Access to
funding is a key component to increased deployment, as
projects at various stages of development may require
assistance with startup and/or backfill expenses. In
addition, some projects may have limited access to
technical assistance to prove project feasibility, which in
turn if proven successful would prompt further assistance
to prove project feasibility, which in turn if proven
successful would prompt further community investment.
Current funds, available for stormwater infrastructure
require a 50% match, which can be difficult to reach for
some projects, depending on the level of access to capital
or stage of development. All of these barriers are
compounded when applied to disadvantaged communities, along
with the negative impacts of aquifer overdrafting.
SB 1328 would create an appropriation from [GGRF] to
facilitate the increased deployment of stormwater capture
projects and groundwater recharge facilities, while also
prioritizing projects located in disadvantaged communities
as defined by Section 39711 of the Health and Safety Code.
By increasing incentives for stormwater capture
infrastructure all communities can benefit from increased
resiliency in local water supplies, providing better access
and water quality.
2) Stormwater capture and reuse.
Improving and increasing stormwater capture and reuse may be
especially beneficial in southern California, which imports a
significant amount of its water supply from northern
California. As noted above, SWP is the largest single user
of energy in the state and consumes an average of 5 billion
kWh/yr, accounting for about 2-3% of all electricity consumed
in California. Stormwater capture and reuse may create net
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benefits in reductions of GHG emissions and energy use by
supplying and delivering water more locally.
3) Green infrastructure.
According to the U.S. Environmental Protection Agency, green
infrastructure uses vegetation, soils, and other elements and
practices to restore some of the natural processes required
to manage water and create healthier urban environments. At
the city or county scale, green infrastructure is a patchwork
of natural areas that provide habitat, flood protection,
cleaner air, and cleaner water. At the neighborhood or site
scale, stormwater management systems that mimic nature soak
up and store water. Green infrastructure is a
cost-effective, resilient approach to managing wet weather
impacts that provides community benefits. While
single-purpose gray stormwater infrastructure - conventional
piped drainage and water treatment systems - is designed to
move urban stormwater away from the built environment, green
infrastructure reduces and treats stormwater at its source
while delivering environmental, social, and economic
benefits.
This bill provides that eligible projects include green
infrastructure. "Green infrastructure" can encompass a wide
array of specific practices, and a number of definitions
exist. However, the term, "green infrastructure" is not
defined in statute. In order to ensure that the intent of
the author is met when considering "green infrastructure"
projects for funding, a question arises as to whether it
would be prudent to define "green infrastructure" in this
bill.
4) Creating another funding program?
Establishing a new program takes effort and money to administer.
For example, public engagement/outreach and workshops are
necessary to create the program; staff time is required to
review proposals and process funds. Also, anytime a new
program is created, and funded through GGRF, there are
various requirements that need to be met by the agency
administering the program as well as ARB. ARB must provide
new program guidance on how to report and quantify GHG
reductions and on how to maximize benefits to disadvantaged
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communities. Each administering agency has to do an
expenditure report to document how the program will reduce
GHG emissions. Creating new programs that may share the same
purpose with existing programs could result in governmental
inefficiencies and avoidable expenses.
5) Piece by piece.
GGRF investments must facilitate the achievement of GHG
emissions reductions. However, after that requirement is
fulfilled, there are a number of other policy goals that
should be considered, including benefits to environmental
quality, resource protection, public health and the economy,
as well as benefits to disadvantaged communities. Various
policy committees have been referred proposals for investing
GGRF moneys, and these committees will likely consider
whether proposals meet basic statutory requirements and align
with legislative priorities. However, in order to create an
optimized investment strategy from GGRF moneys, proposals
should not be considered in isolation, but be assessed in
aggregate to evaluate which set of proposals best meets the
requirements of the fund, uses resources most efficiently,
and maximizes policy objectives. As the budget committees
are considering the Governor's proposal of GGRF expenditures,
the budget process may be an ideal way to comprehensively
consider the numerous policy bills that propose new programs
funded through the GGRF.
Storm Water Grant Program (SWGP).
As noted above, the purpose of SWGP is to fund stormwater and
dry weather runoff projects that best advance SWRCB's policy
goals of improving water quality and realizing multiple benefits
from the use of stormwater and dry weather runoff as a
resources. The vision of the program is to change the
perception of stormwater and dry weather runoff as a contaminant
source to a valuable resource, to recharge groundwater aquifers,
reuse for domestic purposes, support watershed processes, and
beautify communities creating habitat and open spaces.
In November 2014, California voters approved Prop. 1, which
provides $200 million in grants for multi-benefit stormwater
management projects. Water Code §79747 identifies funds
available for multibenefit stormwater management projects, which
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may include, but are not limited to: green infrastructure,
rainwater and stormwater capture projects, and stormwater
treatment facilities.
SB 1328 authorizes SWRCB to provide grants to public agencies to
implement stormwater and dry weather runoff collection and
treatment projects that are intended to reduce GHG emissions by
decreasing demand for electricity needs to pump, transport, and
deliver water. SB 1328 specifies that eligible projects
include, but are not limited to, green infrastructure,
rainwater, stormwater, and dry weather runoff capture projects,
and stormwater treatment facilities.
It seems that the goals and eligible projects of SB 1328 are
very similar to the SWGP. Rather than creating a new program
that seems to overlap with an existing program, and in order to
reduce governmental inefficiencies and avoid unnecessary
expenses, the Committee may wish to consider adding a
subdivision to state that in implementing this section, the
board may use its existing guidelines developed to implement the
Storm Water Grant Program.
Related/Prior Legislation
SB 1425 (Pavley, 2016), which requires ARB, in consultation with
other relevant state agencies, and the Climate Registry, to
develop and administer a registry of GHG emissions resulting
from the water-energy nexus using the best available data. SB
1425 is currently in Senate Appropriations Committee.
SB 471 (Pavley, 2015), which specifies that reductions in GHG
emissions associated with the water sector are eligible
investments for GGRF, requires CEC to study water-related energy
use in California, and requires SWRCB to develop a grant and
loan program to fund projects that result in water-related GHG
reductions. (Held in Assembly Appropriations Committee).
AB 1471 (Rendon, Chapter 188, Statutes of 2014) which
establishes Water Quality, Supply and Infrastructure Improvement
Act of 2014 and authorizes $7.545 billion in new general
obligation bonds (Proposition 1).
SOURCE: Author
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SUPPORT:
California League of Conservation Voters
OPPOSITION:
CalTax
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