BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 1328 (Lara) - Stormwater capture and treatment projects: funding ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 25, 2016 |Policy Vote: E.Q. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 9, 2016 |Consultant: Narisha Bonakdar | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1328 authorizes the State Water Resources Control Board (SWRCB) to expend moneys from the Greenhouse Gas Reduction Fund (GGRF), upon appropriation by the Legislature, to provide grants to public entities to implement stormwater and dry weather runoff collection and treatment projects that are intended to reduce greenhouse gas emissions by decreasing the demand for electricity needed to pump, transport, and deliver water from natural sources to serve water consumers, as prescribed. Fiscal Impact: According to the SWRCB, the administration costs would equal 5 percent of the funds appropriated for this program (currently unspecified in the bill). (GGRF) Up to $406,000 (GGRF) annually for the Air Resources Board to coordinate with SWRCB in developing and periodically updating SB 1328 (Lara) Page 1 of ? guidelines, developing quantification methodologies, and other tasks. (See staff comments) Cost pressures, potentially in the millions (GGRF), to fund the program. Background: The California Global Warming Solutions Act of 2006 (referred to as AB 32, HSC §38500 et seq.) requires the California Air Resources Board (ARB) to determine the 1990 statewide greenhouse gas (GHG) emissions level, to approve a statewide GHG emissions limit equivalent to that level that will be achieved by 2020, and to adopt GHG emissions reductions measures by regulation. ARB is authorized to include the use of market-based mechanisms to comply with the regulations. Under this authority, the ARB initiated the cap-and-trade program. All monies, except for fines and penalties, collected pursuant to the cap-and-trade program deposited in the Greenhouse Gas Reduction Fund (GGRF) (Government Code §16428.8). Existing law requires that the GGRF only be used to facilitate the achievement of reductions of GHG emissions consistent with AB 32 (HSC §39710 et seq.). To this end, the Department of Finance, in consultation with the ARB and any other relevant state agencies, is required to develop, as specified, a three-year investment plan for the moneys deposited in the GGRF. The investment plan must allocate a minimum of 25% of the funds to projects that benefit disadvantaged communities and to allocate 10% of the funds to projects located within disadvantaged communities. Additionally, the ARB, in consultation with CalEPA, is required to develop funding guidelines for administering agencies receiving allocations of GGRF funds that include a component for how agencies should maximize benefits to disadvantaged communities. 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. The State Water Project 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 benefits in reductions of GHG emissions and energy use by supplying and delivering water more locally. Proposed Law: This bill: SB 1328 (Lara) Page 2 of ? 1) Authorizes the 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, 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. 7) Authorizes the SWRCB to use or adapt the guidelines developed to implement the Storm Water Grant Program, which is funded in accordance with the Water Quality, Supply, and Infrastructure Improvement Act of 2014. Related 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 SB 1328 (Lara) Page 3 of ? resulting from the water-energy nexus using the best available data. SB 1425 is currently in Senate Appropriations Committee. SB 471 (Pavley, 2015) 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) established the Water Quality, Supply and Infrastructure Improvement Act of 2014 and authorized $7.545 billion in new general obligation bonds (Proposition 1). Staff Comments: This is one of many bills before the committee that will potentially impact Greenhouse Gas Reduction Fund (GGRF) monies. The Committee may wish to consider a holistic approach to GGRF expenditures. -- END --