BILL ANALYSIS
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2009-2010 Regular Session |
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BILL NO: AB 2776 HEARING DATE: June 29, 2010
AUTHOR: Huffman URGENCY: No
VERSION: June 28, 2010 CONSULTANT: Dennis O'Connor
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Water.
BACKGROUND AND EXISTING LAW
1.Generally, to transfer or exchange water or water rights, one
must receive approval the State Water Resources Control Board
(SWRCB) to change the point of diversion, place of use, or
purpose of use of the water.
However, these provisions generally do not apply to transfers
and exchanges within a water diversion and use system, such as
the State Water Project (SWP) operated by the Department of
Water Resources (DWR). As DWR has already received SWRCB
approval for all points of diversion, places of use, and
purposes of use that fall within the SWP service area, it can
approve contractual modifications which change apportionments
of water between SWP contractors without further SWRCB
approval.
2.The transfer or exchange water or water rights are subject to
California Environmental Quality Act (CEQA). Among other
things, CEQA prohibits a public agency from approving a
project as proposed if it could have significant environmental
impacts and there are feasible alternatives or feasible
mitigation measures available which would substantially lessen
the project's significant environmental effects. Under CEQA,
the inclusion of economic or social information is optional
unless the economic or social changes result in direct or
indirect physical changes with potentially significant adverse
environmental effects.
1.On April 30, 2009 the Mojave Water Agency (MWA) entered into
an agreement with Sandridge Partners of Sunnyvale, CA. a
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water-rights owner in the Dudley Ridge Water District in Kings
County. That agreement gave the MWA a right to acquire 14,000
acre-feet of Dudley Ridge's SWP contract rights, commonly
referred to as "Table A Amounts."
Under the agreement, the MWA's Table A Amount will be
incrementally increased from 75,800 acre-feet a year to 89,800
a year. The deal gives MWA the full 14,000 acre-feet of
water-purchase rights a year beginning in 2020, an 18.47
percent increase over its 2008 contract purchase rights. The
costs of "wet water" delivered to MWA would be paid by MWA to
DWR through its SWP charges. The price of the contract rights
was $73.5 million, or $5,250 an acre-foot, and was paid to
Sandridge Partners.
The Mojave Water Agency asserted the transfer of contract
rights, and the water attached to that right, would not have a
negative impact on the environment. Following a public
hearing, the agreement's CEQA negative declaration was
accepted by the agency's directors at their July 23, 2009
board meeting. Dudley Ridge Water District also approved the
sale, and the transaction closed on Oct. 30, 2009. .
2.As part of the water package enacted last November, the
legislature approved and the governor signed SBX7 6. That
bill requires that on or before January 1, 2012, groundwater
elevations in all groundwater basins and subbasins be
regularly and systematically monitored locally and that the
resulting groundwater information be made readily and widely
available.
3.If a local agency wishes to receive state funds administered
by DWR for the construction of groundwater projects or for
other projects that directly affect groundwater levels or
quality, the local agency must have a groundwater management
plan that meets specific requirements. To meet these
requirements, a local agency must:
Prepare and implement a groundwater management plan that
includes basin management objectives for the groundwater
basin and that includes specific elements.
Adopt monitoring protocols designed to detect changes in
groundwater levels, groundwater quality, inelastic surface
subsidence for basins for which subsidence has been
identified as a potential problem, and flow and quality of
surface water that directly affect groundwater levels or
quality or are caused by groundwater pumping in the basin.
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PROPOSED LAW
This bill would prohibit the SWRCB or DWR from approving any
transfer of surface water or water rights lasting 20 or more
years, including transfers of SWP contract rights, from
agricultural use to municipal use unless the water user provides
to the board or the department a written evaluation of the
economic, social, and environmental effects of the transfer upon
the service area from which the water is to be transferred.
The DWR would be responsible for receiving the analysis of all
applicable transfers within the SWP, SWRCB would be responsible
receiving the analysis of all other transfers.
The SWRCB and DWR would be required to charge the water user a
reasonable fee to cover the agency's costs associated with
implementing this bill, including costs incurred for reviewing
the evaluation.
The bill would prohibit a water user from replacing transferred
surface water that is subject to this bill with groundwater,
unless the groundwater basin of the service area from which the
water is to be transferred is regularly, systematically, and
logically monitored in accordance SBX7 6.
ARGUMENTS IN SUPPORT:
According to the Authors, "Surface water transfers can have very
real and negative impacts on the people and the environment. In
2009, the legislature authorized a water bond measure to be
placed on the November 2010 ballot. The bond measure received a
great deal of support from the agricultural community because
the bond will help stabilize the agricultural water supply. If
water transfers similar to Sandridge are allowed to continue, it
will threaten the public trust necessary to justify an $11
billion investment in water supply.'
"AB 2776 will create a more informed process for approving
long-term transfers of surface water and ensure that groundwater
is used responsibly. It will require DWR to be provided with a
report on the economic and environmental impacts, of any
transfer of a contractual right to the delivery of water of a
water supply from the State Water Resources Development System
that is held by a contractor for agricultural use to another
contractor for municipal use if that transfer is for a period of
20 years or more. Further, it will require that any groundwater
used to replace transferred surface water be from a monitored
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source."
ARGUMENTS IN OPPOSITION: None
COMMENTS
In Reaction To Recent Transfer. The reaction to the Mojave
Water District transfer in Kings County was not favorable.
Local press accounts included "While area farmers are struggling
through a third year of drought, letting land lie fallow because
they can't afford to irrigate it, a large Kings County farm
operator is a step away from a $73 million deal that would send
14,000 acre-feet of water to the Mojave Desert over 10 years."
And "The Kings County Water Commission ... spent much of its
August meeting discussing the transfer's implications. [One of
the Commissioners] said that he would like to halt the deal,
were there a legal avenue for doing so." And "The price, more
than $5,200 an acre-foot, could be a record. Robert Cooke, chief
of the State Water Project Analysis Office, said the most he's
ever heard paid for water was about $3,000 an acre-foot."
According to press accounts, Sandridge farms in southwestern
Kings County, near Kettleman City, uses water from the nearby
California Aqueduct to farm 2,500 acres of almonds. Some
reports say Sandridge intends to use some of its $73 million
windfall to buy groundwater rights in Kings and Tulare counties.
Is Monitoring Sufficient? Groundwater monitoring is important,
but to truly avoid impacts that may arise from substituting
transferred surface water with groundwater, it may make sense to
require that the basin be actively managed consistent with the
same standards that are required of basins receiving state
grants for groundwater projects. (See amendment 1)
Related Bills. This bill is virtually the same as AB 2049
(Arambula)
SUGGESTED AMENDMENTS:
AMENDMENT 1: In 1746.5. (b)(2), add a requirement that
the basin be managed consistent with a groundwater
management plan pursuant to Section 10753.7
SUPPORT
None Received
OPPOSITION
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None Received
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