BILL ANALYSIS                                                                                                                                                                                                    

                                                                    SB 1328

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          Date of Hearing:  June 28, 2016


                                 Marc Levine, Chair

          1328 (Lara) - As Amended June 21, 2016

          SENATE VOTE:  25-8

          SUBJECT:  Stormwater capture and treatment projects: funding

          SUMMARY:  Authorizes the State Water Resources Control Board  
          (SWRCB) to use money 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 (GHG).  Specifically, this bill:  

          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 the SWRCB to expend moneys from the GGRF, upon  
             appropriation by the Legislature for these grants.

          3) Specifies, but does not limit to, listed eligible projects  
             and makes clear that all stages of an eligible project may be  


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             awarded funds.

          4) Requires the SWRCB to establish criteria for funding projects  
             based on demonstration of GHG emissions reductions.

          5) Requires the SWRCB to give preference to projects located in,  
             and provide benefits to, disadvantaged community or within  
             one-half mile of a channelized river.

          6) Permits the SWRCB to use or adapt the guidelines developed to  
             implement the Storm Water Grant Program funded through  
             Proposition 1 of 2014.

          EXISTING LAW:  

          1)Establishes the 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. 

          2)Requires moneys from the GGRF be used to facilitate the  
            achievement of reductions of GHG emissions in California.  

          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  

          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, cost pressures potentially in the millions from the  
          GGRF.  SWRCB administration costs equal to 5% of the funds  
          appropriated.  Up to $406,000 in GGRF funds annually to the Air  
          Resources Board to coordinate with the SWRCB.

          COMMENTS:  Authorizes the SWRCB to use money from the GGRF upon  
          appropriation by the Legislature, to provide grants to public  


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          entities to implement stormwater and dry weather runoff  
          collection and treatment projects that are intended to reduce  
          GHG emissions.

          1)Author's Statement: This bill provides much needed assistance  
            for the increased deployment of stormwater capture and ground  
            water recharge facilities.  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, these barriers are compounded when applied to  
            disadvantaged communities.
            This bill permits the SWRCB to use appropriated funds from the  
            GGRF to facilitate the increased deployment of stormwater  
            capture projects and groundwater recharge facilities, while  
            also prioritizing projects located in disadvantaged  
            communities. By increasing incentives for stormwater capture  
            infrastructure all communities can benefit from increased  
            resiliency in local water supplies, providing better access  
            and water quality, and decrease dependence on imported water.

          2)Background:  GHG emissions associated with water are  
            significant.  There is potential to capture a substantial  
            amount of water through stormwater.  The capture and reuse of  
            stormwater may create net benefits in reductions of GHG  
            emissions by supplying and delivering water more locally.  

            Water and energy use:  The State Water Project is the single  
            largest 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.  According to the State Energy  
            Resources and Conservation and Development Commission,  
            water-related energy use in California 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,  


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            treat, transport, deliver, and heat water.  Additionally,  
            expected increases in groundwater pumping, water treatment,  
            and water recycling due to drought conditions in the state,  
            mean the energy intensity of water will likely increase.

            Stormwater funding: In 2014 the Public Policy Institute of  
            California estimated that there was an annual funding gap of  
            $500 million to $800 million for stormwater infrastructure.  
            The SWRCB, manages the Storm Water Grant Program 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 resources.  In November 2014, California voters  
            approved Proposition 1 (Prop. 1), Water Quality, Supply and  
            Infrastructure Improvement Act of 2014 (AB 1471, Rendon,  
            Chapter 188).  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. 

            GGRF:  Since November of 2012, the Air Resources Board has  
            held quarterly cap-and-trade auctions, generating over $4  
            billion in funds.  State law requires that auction proceeds  
            must be used to facilitate GHG reductions.  This bill makes  
            stormwater and dry weather runoff collection and treatment  
            projects that have demonstrated GHG emission reductions  
            eligible for grants supported through the GGRF, upon  
            appropriation by the Legislature. 

          3)Prior and Related Legislation: 

               a)     AB 2594 (Gordon), passed this committee 10-3, passed  
                 Senate Environmental Quality 5-2 and is currently in  
                 Senate Natural Resources and Water.  Would permit a  
                 public entity that captures stormwater before the water  
                 reaches a natural channel to use the water.  


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               b)     AB  1989 (Jones), passed this committee 14-0, and is  
                 held under submission in Assembly Appropriations.  Would  
                 have required several state agencies to develop and  
                 implement a grant and low interest loan program to reduce  
                 water-related GHG emissions.  

               c)     SB 471 (Pavely), 2015, held in Assembly  
                 Appropriations was very similar to AB 1989.

               d)     SB 551 (Wolk), 2015, passed this committee 9-4, held  
                 in Assembly Appropriations. Would have established a  
                 state policy recognizing and addressing the nexus between  
                 water and energy.  

               e)     AB 1471 (Rendon), Chapter 188, Statutes of 2014,  
                 placed Proposition 1, a $7.545 billion general obligation  
                 bond for water-related projects and programs

               f)     AB 32 (Nez, Pavely), Chapter 488, Statues of 2006,  
                 establishes the requirement to reduce GHG emissions and  
                 put in place the mechanism to achieve that requirement.

               g)     SB 790 (Pavley), Chapter 620, Statues of 2009,  
                 authorized stormwater resource plans.

               h)     AB 1750 (Solorio), Chapter 537, Statues of 2012,  
                 recognized property owners did not need a water right to  
                 capture rainwater.

               i)     SB 985 (Pavley), Chapter 555, Statues of 2014,  


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                 required the State Water Board to provide guidance for  
                 stormwater resource planning.

          1)Supporting Arguments: Stormwater capture is critical for local  
            water reliability.  This bill would allow for GGRF money to be  
            leveraged as grants for stormwater capture projects and  
            groundwater recharge facilities, prioritizing disadvantaged  
            communities in consideration for grant awards.  Doing this  
            incentivizes development in rural communities that would not  
            only improve communities' water quality and supply, but would  
            also increase those communities' resilience to drought, and  
            decrease dependence on external sources of water.

          2)Opposing Arguments: This bill distorts the nature of a  
            regulatory fee.  Cap-and-trade auction revenue cannot legally  
            be earmarked for expenditures such as those identified in this  
            bill, absent a two-thirds vote.  By directing funding beyond  
            the clear regulatory purposes, this bill opens up the  
            cap-and-trade auction to ongoing challenges. 



          Association of California Water Agencies

          Audubon California

          California League of Conservation Voters


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          City of Long Beach

          Tree People

          Water Replenishment District of Southern California



          Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916)