BILL ANALYSIS                                                                                                                                                                                                    

                                                                    SB 1328  

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          Date of Hearing:  August 3, 2016


                               Lorena Gonzalez, Chair

          SB 1328  
          (Lara) - As Amended June 21, 2016

          |Policy       |Water, Parks and Wildlife      |Vote:|12 - 3       |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill authorizes the State Water Resources Control Board  
          (SWRCB) to expend funds from the Greenhouse Gas Reduction Fund  
          (GGRF), upon appropriation by the Legislature, to provide grants  
          to public entities to implement stormwater and dry weather  


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          runoff collection and treatment projects that are intended to  
          reduce greenhouse gas (GHG) emissions by decreasing the demand  
          for electricity needed to pump, transport, and deliver water  
          from natural sources to serve water consumers, as specified.   
          Specifically, this bill:

          1) Provides eligible projects for funding include, but are not  
             limited to, green infrastructure, rainwater, stormwater, dry  
             weather runoff capture projects, and stormwater treatment  

          2) Specifies grant funds may be used for all phases of planning,  
             design, and project construction and implementation.

          3) Requires SWRCB to establish criteria for funding projects  
             based on the demonstration of GHG emissions reductions and  
             geographic conditions that facilitate stormwater and dry  
             weather runoff collection.

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

          5) Authorizes 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 (Proposition 1, Water Bond).

          FISCAL EFFECT:


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          1)Cost pressures, likely in the millions of dollars, to fund the  
            program (GGRF).

          2)Increased unknown administrative costs, likely 5% of the total  
            program funds, for SWRCB to implement the program.  According  
            to SWRCB, an amendment is necessary to allow the use of GGRF  
            for administrative costs rather than GF.

          3)Up to approximately $565,000 (GGRF) annually for the Air  
            Resources Board (ARB) to coordinate with SWRCB in developing  
            and updating guidelines, developing quantification  
            methodologies, and providing legal review.


          1)Purpose.  According to the author, despite the availability of  
            Water Bond funds for stormwater infrastructure, there are  
            still significant barriers to increased implementation of  
            stormwater projects.  This bill provides assistance for the  
            increased deployment of stormwater capture while also  
            prioritizing projects located in disadvantaged communities and  
            within a half mile of channelized rivers. 
          2)Background.  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


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            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 California Energy 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.  

            The water sector uses electricity to pump, 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.

          3)GGRF.  The California Global Warming Solutions Act of  2006  
            (AB 32, Chapter 488, Statutes of 2006) required ARB to adopt a  
            statewide greenhouse gas (GHG) emissions limit equivalent to  
            1990 levels by 2020 and adopt regulations to achieve maximum  
            technologically feasible and cost-effective GHG emission  
            reductions.  As part of its AB 32 implementation, ARB adopted  
            a cap-and-trade program for which the proceeds from the  
            auction or sale of GHG allowances are deposited in the GGRF  
            available for appropriation by the Legislature.

            To date, cap-and-trade auction revenues have generated over $4  
            billion.  However, the most recent auction, held last month,  
            generated just over $10 million, much less than expected.  The  
            previous auction (February, 2016) generated over $500 million.  

            The Governor proposed spending over $3 billion for a variety  


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            of programs and projects in the transportation, energy,  
            natural resources, and waste diversion sectors in the 2016-17  
            budget, however, the Legislature did not act upon these items.  
            According to the Assembly Budget Committee, due to  
            lower-than-expected auction revenues, decisions on  
            cap-and-trade funding were deferred until after June 15, 2016.  

          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)