BILL NUMBER: SB 571 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 13, 2011
INTRODUCED BY Senator Wolk
(Coauthor: Assembly Member Huber)
FEBRUARY 17, 2011
An act to amend Section 10546 of, and to add Sections 167
and 168 to, the Water Code, relating to the California Water
Commission. An act to amend Sections 150, 160, 163,
10004.5, 10005.1, and 10005.2 of, to amend, renumber, and add Section
10004 of, to add Sections 163.6, 163.7, 167, 10004.2, 10004.3, and
10004.4 to, to add Division 8 (commencing with Section 16500) to, to
repeal Sections 162 and 10004.6 of, and to repeal and add Section
163.5 of, the Water Code, relating to water resources.
LEGISLATIVE COUNSEL'S DIGEST
SB 571, as amended, Wolk. California Water Commission:
master plan for financing and developing water resources:
state-funded projects and programs California Water
Plan: water resources investment .
(1) Existing law establishes the California
Water Commission in the Department of Water Resources and requires
the commission to conduct an annual review of the progress and
operation of the State Water Project and to carry out various other
related functions. Existing law requires the members of the
commission to select a chairperson, and authorizes the commission to
employ an executive officer and other staff from the staff of the
department. The commission is also authorized to employ clerical
assistants. Existing law requires the department to furnish the
commission with assistance, including technical, legal, and clerical
services.
This bill would provide for the organization of the commission as
a separate agency in state government, instead of as an agency within
the Department of Water Resources. The bill would recast and revise
provisions relating to the commission's selection of a chairperson
and executive officer employment of staff, and delegation of its
functions.
The bill would also enact the Water Resources Investment Planning
Act, and would declare legislative intent relating to the
establishment of regional water planning agencies and the development
of the California Water Investment Plan. The bill would require the
commission to administer the development and implementation of the
California Water Investment Plan.
(2) Existing law requires the department to update every 5 years
the plan for the orderly and coordinated control, protection,
conservation, development, and use of the water resources of the
state, which is known as the California Water Plan. Existing law
prescribes various requirements for the contents of updates to the
plan, and requires the department, or the commission at the
department's request, to conduct hearings relative to the plan.
This bill would instead require the commission to update the plan
by an unspecified date, and every 5 years thereafter. The bill would
require the plan to include reports developed by the department and
regional water planning agencies established pursuant to the Water
Resources Investment Planning Act. The bill would require the
department and the regional agencies to submit those reports to the
commission by an unspecified date, would prescribe the contents of
the reports, and would require the department and regional agencies
to collaborate and consult with specified agencies and entities for
purposes of developing the reports. The bill would recast, and make
conforming changes to, requirements for the contents of updates to
the plan. The bill would also require the commission, instead of the
department, to conduct hearings relative to the plan.
This bill would require the commission on or before January 1,
2013, to develop a master plan for financing and developing water
resources in the state, including specified assessments and
recommendations. The bill would require the commission to update the
master plan every 5 years. The bill would require the commission to
annually review and audit the award of state funds for water
resources projects and programs; to develop, consistent with the
master plan, a prioritized list of projects and programs relating to
water supply, water quality, water conservation, water use
efficiency, ecosystem and watershed restoration, and integrated
regional water management planning and implementation, for purposes
of awarding state financial assistance for those projects and
programs; and to establish guidelines for the award of state
financial assistance allocated for integrated regional water
management plans, as specified. The bill would also declare
legislative intent that the commission be given authority to allocate
specified state funds for water resources projects and programs.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) Numerous state agencies have a role in developing and
implementing plans to improve one or more aspects of the state's
water resources. These agencies develop and implement plans focused
solely on their respective legal mandate. There is often little
coordination among agencies, resulting in significant gaps in
addressing the state's pressing water resources needs.
(b) Under Section 10005 of the Water Code, it the policy of the
state that the California Water Plan, with any necessary amendments,
supplements, and additions to the plan, is accepted as the master
plan that guides the orderly and coordinated control, protection,
conservation, development, management, and efficient utilization of
the water resources of the state.
(c) The original California Water Plan, also known as Bulletin 3,
contained detailed tables describing specific projects that the plan
recommended for consideration. These tables described the location,
potential yield, purpose, and estimated cost of each proposal.
However, recent updates of the California Water Plan have provided
little insight as to specific types of investments necessary to
address California's water needs. The plan is especially quiet on
addressing drinking water quality, water quality for other beneficial
uses, flood management, ecosystem restoration, and other water
resources related problems. Moreover, there is virtually no
discussion of the amount of funding necessary to implement the
recommendations of the plan.
(d) Current reliance on general obligation bonds, coupled with
continued and growing budget gaps, requires the Legislature to weigh
the need for water infrastructure against the need to provide vital
public services during a period of greatly reduced revenues.
(e) There is a need for a new water resource financing governance
strategy that includes greater transparency, a broader use of
available funding mechanisms, and a stronger focus on prioritization
and strategic investments.
SEC. 2. The Legislature further finds and declares
all of the following:
(a) In comparison to water funding decisionmaking, transportation
funding decisions are made in a reasonably predictable and
transparent process. The Department of Transportation and the various
regional transportation planning agencies all have well-defined
roles for identifying projects to resolve regional and interregional
transportation issues. The California Transportation Commission acts
as the independent overseer of the transportation financing process,
adopting a funding estimate, establishing the guidelines for updating
the state transportation improvement plan, and resolving the
occasional conflict of perspectives between the Department of
Transportation and the regional transportation planning agencies.
(b) Much of the success of the transportation financing process is
the result of clearly delineated and independent roles and
responsibilities, established in statute, for the California
Transportation Commission, the Department of Transportation, and the
regional transportation planning agencies.
SEC. 3. It is the intent of the Legislature, in
enacting this measure, to do all of the following:
(a) Revise the requirements of the California Water Plan to make
it more comprehensive, clearly assessing the costs of potential
action.
(b) Establish the California Water Commission as an independent
agency in state government.
(c) Establish a process for the California Water Commission to
develop and adopt the California Water Investment Plan, which would
be similar to the state transportation improvement plan.
(d) Establish a process for the California Water Commission to
make funding allocations for specific projects and programs,
including bond proceeds and other funds that may be made available to
the state from state and federal sources.
(e) Establish a process to develop state and regional water
investment priorities, establish regional water resources planning
agencies, and establish a water resources planning and funding
process that is similar to that used in transportation planning and
funding.
SEC. 4. Section 150 of the Water Code
is amended to read:
150. There is in the Department of Water Resources the
The California Water Commission is
established as an agency in state government .
SEC. 5. Section 160 of the Water Code
is amended to read:
160. The members of the California Water Commission shall select
one of the members to serve as chairman ,
who shall hold office as chairman at the pleasure of the commission
chairperson, who shall serve ____ .
SEC. 6. Section 162 of the Water Code
is repealed.
162. It is the intention of the Legislature that in the making of
all major departmental determinations, policies and procedures, such
as departmental recommendations to the Legislature, the director and
the California Water Commission shall be in agreement whenever
possible; but for the purpose of fixing responsibility to the
Governor and to the Legislature, in the event of disagreement between
the director and the commission upon such matters, the views of the
director shall prevail. In the event of disagreement pursuant to this
section, a written report upon such disagreement shall be made
immediately to the Governor and to the President pro Tempore of the
Senate and the Speaker of the Assembly by the commission and by the
director.
SEC. 7. Section 163 of the Water Code
is amended to read:
163. The commission may employ shall
appoint an executive officer, director,
who shall be exempt from civil service ,
under subdivision (e) of Section 4 of Article XXIV of the
Constitution , and a staff engineer from the staff of the
department who shall be responsible to the commission. The commission
may also employ such clerical assistants as may be necessary for the
proper discharge of its duties and may purchase or rent necessary
supplies, instruments, tools, equipment and conveniences
and shall serve at the pleasure of the commission. The executive
director shall administer the affairs of the commission as directed
by the commission and shall direct the staff of the commission
.
SEC. 8. Section 163.5 of the Water Code
is repealed.
163.5. The department shall furnish to the California Water
Commission, at its request, such assistance, including technical,
legal, and clerical services, as is required to the extent funds are
made available therefor.
SEC. 9. Section 163.5 is added to the
Water Code , to read:
163.5. (a) The executive director, with the approval of the
commission, may appoint such staff as is necessary to implement this
article.
(b) (1) The commission may request the department to, and the
department may, perform such work as the commission deems necessary
to carry out the commission's duties and responsibilities. The
commission shall consider the expertise and resources available in
the department for purposes of carrying out its duties and
responsibilities.
(2) Nothing in this subdivision shall be construed to prohibit the
commission from utilizing the services of any other public or
private agency.
(c) The commission may employ its own legal staff, may contract
with other state agencies for legal services, or both.
SEC. 10. Section 163.6 is added to the
Water Code , to read:
163.6. The commission may sue or be sued.
SEC. 11. Section 163.7 is added to the
Water Code , to read:
163.7. Except where a statute expressly provides that the
commission itself shall hold a public hearing, the commission may
delegate functions such as hearing arguments, taking evidence, and
finding facts to committees or staff members of the commission. The
committee or staff shall have the authority to recommend a decision
to the commission.
SEC. 12. Section 167 is added to the
Water Code , to read:
167. The commission shall administer the development and
implementation of the California Water Investment Plan pursuant to
Division 8 (commencing with Section 16500).
SEC. 13. Section 10004 of the Water
Code is ame nded and renumbered to read:
10004. 10004.1. (a) The plan for
the orderly and coordinated control, protection, conservation,
development, and utilization of the water resources of the state
, which is set forth and described in Bulletin No. 1 of the
State Water Resources Board entitled "Water Resources of California,"
Bulletin No. 2 of the State Water Resources Board entitled, "Water
Utilization and Requirements of California," and Bulletin No. 3 of
the department entitled, "The California Water Plan," with any
necessary amendments, supplements, and additions to the plan, shall
be known as "The California Water Plan."
(b) (1) The department shall update The California Water Plan on
or before December 31, 2003, and every five years thereafter. The
department shall report the amendments, supplements, and additions
included in the updates of The California Water Plan, together with a
summary of the department's conclusions and recommendations, to the
Legislature in the session in which the updated plan is issued.
(2) The department shall establish an advisory committee,
comprised of representatives of agricultural and urban water
suppliers, local government, business, production agriculture, and
environmental interests, and other interested parties, to assist the
department in the updating of The California Water Plan. The
department shall consult with the advisory committee in carrying out
this section. The department shall provide written notice of meetings
of the advisory committee to any interested person or entity that
request the notice. The meetings shall be open to the public.
(3) The department shall release a preliminary draft of The
California Water Plan, as updated, upon request, to interested
persons and entities throughout the state for their review and
comments. The department shall provide these persons and entities an
opportunity to present written or oral comments on the preliminary
draft. The department shall consider these comments in the
preparation of the final publication of The California Water Plan, as
updated.
(b) (1) The commission shall update the California Water Plan on
or before December 31, ____, and every five years thereafter, in
accordance with this chapter.
(2) Each update shall consist of both of the following:
(A) The report submitted by the department pursuant to Section
10004.2.
(B) The report developed pursuant Section 10004.3, including any
changes made by the commission to resolve conflicts between that
report and one or more of the regional draft reports developed
pursuant to Section 10004.4.
(C) The reports developed pursuant to Section 10004.4, including
any changes made by the commission to resolve conflicts between any
of those reports and the report developed pursuant to Section
10004.3.
SEC. 14. Section 10004 is added to the
Water Code , to read:
10004. Unless the context otherwise requires, the following
definitions govern the construction of this chapter:
(a) "Commission" means the California Water Commission.
(b) "Regional water planning agency" means a regional water
planning agency established pursuant to Part 4 (commencing with
Section 16650) of Division 8.
SEC. 15. Section 10004.2 is added to the
Water Code , to read:
10004.2. (a) On or before ____, the department, in collaboration
with the agencies listed in paragraph (1) of subdivision (c), and in
consultation with the agencies listed in paragraph (2) of subdivision
(c), shall conduct a study to evaluate the current and future
condition of the state's water resources and the impact those
conditions have or may have on natural resources and on persons or
entities that rely on those resources. The department shall provide a
report to the commission documenting the results of the study.
(b) The study shall assess, at a minimum, all of the following:
(1) Water supply reliability.
(2) Water quality for beneficial uses.
(3) Drinking water quality.
(4) Flood management.
(5) Ecosystem functions.
(c) (1) For purposes of subdivision (a), the department shall
collaborate with all of the following:
(A) The State Water Resources Control Board.
(B) The State Department of Public Health.
(C) The Department of Fish and Game.
(D) The Delta Stewardship Council.
(E) The Central Valley Flood Protection Board.
(F) The United States Geological Survey.
(2) For purposes of subdivision (a), the department shall consult
with all of the following:
(A) Regional water planning agencies.
(B) Representatives of business interests.
(C) Representatives of agricultural interests.
(D) Representatives of environmental interests.
(E) Representatives of natural resources-dependent industries.
(F) Representatives of disadvantaged communities, as defined in
Section 79505.5.
(d) The department shall collect from each collaborating agency
identified in paragraph (1) of subdivision (c), and shall make
available, all pertinent data and analyses upon which the study will
be based, to interested persons and entities throughout the state for
their review and comments. The department shall provide these
persons and entities an opportunity to present written or oral
comments on the data and analyses. The department shall consider
these documents when adopting the final data and analyses for the
study. For the purpose of carrying out this subdivision, the
department shall release, at a minimum, data and analyses relating to
all of the following:
(1) Basin hydrology, including annual rainfall, estimated
unimpaired streamflow, depletions, and consumptive uses.
(2) Groundwater supplies, including estimates of sustainable
yield, supplies necessary to recover overdraft basins, and supplies
lost due to pollution and other groundwater contaminants.
(3) Current and projected land use patterns, including the mix of
residential, commercial, industrial, agricultural, and undeveloped
lands.
(4) Environmental water needs, including regulatory instream flow
requirements, nonregulated instream uses, and water needs by
wetlands, preserves, refuges, and other managed and unmanaged natural
resource lands.
(5) Current and projected population.
(6) Current and projected water use for all of the following:
(A) Interior uses in a single-family dwelling.
(B) Exterior uses in a single-family dwelling.
(C) All uses in a multifamily dwelling.
(D) Commercial uses.
(E) Industrial uses.
(F) Parks and open spaces.
(G) Agricultural water diversion and use.
(7) Evapotranspiration rates for major crop types, including
estimates of evaporative losses by irrigation practice and the extent
to which evaporation reduces transpiration.
(8) Current and projected adoption of urban and agricultural
conservation practices.
(9) Current and projected supplies of water provided by water
recycling and reuse.
SEC. 16. Section 10004.3 is added to the
Water Code , to read:
10004.3. (a) On or before ____, the department, in collaboration
with the agencies listed in paragraph (1) of subdivision (b), and in
consultation with the agencies listed in paragraph (2) of subdivision
(b), shall provide a draft report to the commission recommending
programs, policies, and facilities to address impacts of statewide
and interregional concern identified in the report developed pursuant
to subdivision (a).
(b) (1) The department shall collaborate with all of the
following:
(A) The State Water Resources Control Board.
(B) The State Department of Public Health.
(C) The Department of Fish and Game.
(D) The Delta Stewardship Council.
(E) The Central Valley Flood Protection Board.
(F) The United States Geological Survey.
(2) The department shall consult with all of the following:
(A) Regional water planning agencies.
(B) Representatives of business interests.
(C) Representatives of agricultural interests.
(D) Representatives of environmental interests.
(E) Representatives of natural resources-dependent industries.
(F) Representatives of disadvantaged communities, as defined in
Section 79505.5.
(c) The draft report shall reflect recommendations and planned
actions included in all of the following:
(1) The Delta Plan adopted by the Delta Stewardship Council
pursuant to Section 85300.
(2) The Central Valley Flood Protection Plan adopted by the
Central Valley Flood Protection Board pursuant to Section 9612.
SEC. 17. Section 10004.4 is added to the
Water Code , to read:
10004.4. (a) On or before ____, each regional water planning
agency shall provide a report to the commission identifying, and
recommending, programs, policies, and facilities to address, impacts
of regional and local concern.
(1) For purposes of this subdivision, each regional water planning
agency shall consult with all of the following:
(A) The Department of Water Resources.
(B) The State Water Resources Control Board.
(C) The State Department of Public Health.
(D) The Department of Fish and Game.
(E) The Delta Stewardship Council.
(F) The Central Valley Flood Protection Board.
(G) The United States Geological Survey.
(2) Each regional water planning agency's report shall reflect
recommendations and planned actions included in all of the following
plans that are within the geographic area served by the regional
water planning agency:
(A) Integrated regional water management plans adopted pursuant to
Part 2.2 (commencing with Section 10530) of Division 6.
(B) Urban water management plans adopted pursuant to Part 2.6
(commencing with Section 10610) of Division 6.
(C) Agricultural water management plans adopted pursuant to Part
2.8 (commencing with Section 10800) of Division 6.
(D) Stormwater resource plans adopted pursuant to Part 2.3
(commencing with Section 10560) of Division 6.
(b) The California Water Commission shall resolve any conflicts
between the draft report submitted pursuant to Section 10004.3 and
the draft reports submitted pursuant to this section, and may make
changes to the draft report submitted pursuant to Section 10004.3 and
any reports submitted pursuant to this section, as may be deemed
necessary by the commission.
SEC. 18. Section 10004.5 of the Water
Code is amended to read:
10004.5. As part of the requirement of the department to
update The to submit reports for purposes of updating
the California Water Plan pursuant to subdivision (b)
of Section 10004 this chapter , the department
and each regional water planning agency shall include
in the plan in their respective reports
pursuant to Sections 10004.3 and 10004.4, a discussion of
various strategies, including, but not limited to, those relating to
the development of new water storage facilities, water conservation,
water recycling, desalination, conjunctive use, and water transfers
that may be pursued in order to meet the future water needs of the
state or the respective region . The department and
each regional water planning agency shall also include a
discussion of the potential for alternative water pricing policies to
change current and projected uses. The department and each
regional water planning agency shall include in the
plan a discussion of the potential advantages and
disadvantages of each strategy , an estimate of the anticipated
cost of implementing each strategy, and an identification of
all federal and state permits, approvals, or entitlements that are
anticipated to be required in order to implement the various
components of the strategy.
SEC. 19. Section 10004.6 of the Water
Code is repealed.
10004.6. (a) As part of updating The California Water Plan every
five years pursuant to subdivision (b) of Section 10004, the
department shall conduct a study to determine the amount of water
needed to meet the state's future needs and to recommend programs,
policies, and facilities to meet those needs.
(b) The department shall consult with the advisory committee
established pursuant to subdivision (b) of Section 10004 in carrying
out this section.
(c) On or before January 1, 2002, and one year prior to issuing
each successive update to The California Water Plan, the department
shall release a preliminary draft of the assumptions and other
estimates upon which the study will be based, to interested persons
and entities throughout the state for their review and comments. The
department shall provide these persons and entities an opportunity to
present written or oral comments on the preliminary draft. The
department shall consider these documents when adopting the final
assumptions and estimates for the study. For the purpose of carrying
out this subdivision, the department shall release, at a minimum,
assumptions and other estimates relating to all of the following:
(1) Basin hydrology, including annual rainfall, estimated
unimpaired streamflow, depletions, and consumptive uses.
(2) Groundwater supplies, including estimates of sustainable
yield, supplies necessary to recover overdraft basins, and supplies
lost due to pollution and other groundwater contaminants.
(3) Current and projected land use patterns, including the mix of
residential, commercial, industrial, agricultural, and undeveloped
lands.
(4) Environmental water needs, including regulatory instream flow
requirements, nonregulated instream uses, and water needs by
wetlands, preserves, refuges, and other managed and unmanaged natural
resource lands.
(5) Current and projected population.
(6) Current and projected water use for all of the following:
(A) Interior uses in a single-family dwelling.
(B) Exterior uses in a single-family dwelling.
(C) All uses in a multifamily dwelling.
(D) Commercial uses.
(E) Industrial uses.
(F) Parks and open spaces.
(G) Agricultural water diversion and use.
(7) Evapotranspiration rates for major crop types, including
estimates of evaporative losses by irrigation practice and the extent
to which evaporation reduces transpiration.
(8) Current and projected adoption of urban and agricultural
conservation practices.
(9) Current and projected supplies of water provided by water
recycling and reuse.
(d) The department shall include a discussion of the potential for
alternative water pricing policies to change current and projected
water uses identified pursuant to paragraph (6) of subdivision (c).
(e) Nothing in this section requires or prohibits the department
from updating any data necessary to update The California Water Plan
pursuant to subdivision (b) of Section 10004.
SEC. 20. Section 10005.1 of the Water
Code is amended to read:
10005.1. The department or, at the department's request,
the California Water Commission, commission
shall conduct a series of hearings with interested persons,
organizations, local, state, and federal agencies, and
representatives of the diverse geographical areas and interests of
the state.
SEC. 21. Section 10005.2 of the Water
Code is amended to read:
10005.2. Prior to holding a hearing pursuant to Section 10005.1,
the department commission shall give
notice by mail of the hearing to persons and entities which have
requested notice and have provided their name and address to the
department commission .
SEC. 22. Division 8 (commencing with
Section 16500) is added to the Water Code , to
read:
DIVISION 8. Water Resources Investment Planning
PART 1. General Provisions
16500. This division shall be known, and may be cited, as the
Water Resources Investment Planning Act.
16505. For purposes of this division, "commission" means the
California Water Commission.
16510. It is the intent of the Legislature, in enacting this
division, to create a process to develop state and regional water
investment priorities, establish regional water resources planning
agencies, and establish a water resources planning and funding
process that is similar to the process used for purposes of
transportation planning and funding.
PART 2. California Water Investment Plan
16550. It is the intent of the Legislature, in enacting this
division, to do all of the following:
(a) Establish a process for the commission to develop and adopt
the California Water Investment Plan, which should be similar to the
state transportation improvement plan adopted pursuant to Section
14529 of the Government Code. This process should include all of the
following:
(1) Development and adoption, by the commission, of a five-year
estimate of all funds reasonably expected to be available for
programs and projects related to water resources. The process should
be similar to the process described in Article 4.3 (commencing with
Section 163) of Chapter 1 of Division 1 of the Streets and Highways
Code.
(2) Development and implementation, by state agencies, of a state
water investment plan pursuant to Part 3 (commencing with Section
16600).
(3) Development and implementation, by regional water planning
agencies, of regional water investment plans pursuant to Part 4
(commencing with Section 16650).
(4) Mediation, by the commission, of any disagreements between or
among the state agencies and regional water planning agencies.
(b) Establish the process for the commission to make funding
allocations for specific projects and programs, including bond
proceeds and other funds that may be made available to the state from
state and federal sources.
PART 3. State Water Investment Planning
16600. It is the intent of the Legislature, in enacting this
division, to establish the process for state agencies to develop and
implement a state water investment plan.
(a) At a minimum, the following state agencies should be involved
in developing and implementing the state water investment plan:
(1) The Department of Water Resources.
(2) The State Water Resources Control Board.
(3) The Department of Public Health.
(4) The Department of Fish and Game.
(5) The Delta Stewardship Council.
(b) The state water investment plan should be consistent with the
most recently adopted update to the California Water Plan.
PART 4. Regional Water Resources Investment Planning
16650. It is the intent of the Legislature, in enacting this
division, to do all of the following:
(a) Establish regional water planning agencies that would perform
a function similar to regional transportation planning agencies.
(1) Regional water planning agencies should be organized into ____
regions.
(2) Regional water planning agencies should include
representatives of, at a minimum, all of the following:
(A) Retail water agencies that principally serve agricultural
water users.
(B) Retail water agencies that principally serve nonagricultural
water users.
(C) Wholesale water agencies.
(D) Wastewater management agencies.
(E) Stormwater management agencies.
(F) Cities.
(G) Counties.
(b) Establish the process for regional water planning agencies to
develop and implement regional water investment plans.
SECTION 1. The Legislature finds and declares
all of the following:
(a) Numerous agency reports from the office of the Treasurer, the
Little Hoover Commission, the State Auditor, and the Legislative
Analyst's Office have expressed concern with the level of reliance on
bond funds for water and resource related state expenditures, and
the lack of oversight and prioritization of funding allocations
associated with the current method of managing resource related bond
funds. These reports call for a new water and resource financing
governance strategy, one that includes greater transparency, a
broader use of available funding mechanisms, and a stronger focus on
prioritization and strategic investments.
(b) The Treasurer has warned that continued reliance on general
obligation bonds to finance the state's infrastructure, including
water, will consume 10 percent or more of the state's General Fund by
the middle of the next decade, unless the budget improves. The
Treasurer estimated that debt service costs will be at historically
high levels through the coming decade and beyond.
(c) The Treasurer has further found that bond spending freezes in
2008 and 2009, in response to the budget crisis, halted 5,000
infrastructure jobs, affected thousands of jobs for workers, billions
of dollars in revenue for private businesses, and imperiled many
community based and nonprofit organizations.
(d) The office of the Treasurer has also noted that the state has
virtually eliminated pay-as-you-go capital allocations and used the
savings to finance operating expenses. This practice can lead to
underinvestment or disinvestment in infrastructure. To avoid this
practice, the Treasurer recommended that the Legislature and the
Governor actively, consistently, and prudently make capital finance
decisions an ongoing part of the budget process.
(e) Current reliance on general obligation bonds, coupled with
continued and growing budget gaps, requires the Legislature to weigh
the need for water infrastructure against the need to provide vital
public services during a period of greatly reduced revenues.
(f) The Little Hoover Commission recently reported that general
obligation bond debt accounted for 52 percent of the budget in the
Governor's proposed General Fund Expenditures for all Resources and
Environmental Protection in the 2010-11 fiscal year.
(g) In its report, "Managing for Change," the Little Hoover
Commission expressed concern about the state's use of bond borrowing
to fund ongoing operational expenses related to water management. The
commission further stated that the state's role of managing and
planning for California's future water use is not a one-time
investment, but part of the ongoing business of government and, as
such, requires a sustainable funding source, either through fee
revenue, General Fund support, or special fund support.
(h) The Little Hoover Commission further recommended that the
Legislature be more assertive in oversight of bond expenditures and
be more strategic in how it prioritizes and finances infrastructure
investments.
(i) Addressing these concerns will better enable California to
meet its water supply, water quality, and water management needs
during difficult financial times.
SEC. 2. Section 167 is added to the Water Code,
to read:
167. On or before January 1, 2013, the California Water
Commission shall develop, and shall update by January 1 every five
years thereafter, a master plan for financing and developing water
resources in the state. The master plan shall include all of the
following:
(a) An assessment of the state's capital outlay and ongoing
maintenance needs for water resources through 2050. In making this
assessment, the commission may use the most recent update of the
California Water Plan, if the commission determines that it is
sufficient to meet the requirements of this subdivision.
(b) Recommended guidelines for the Legislature and the Governor to
set and maintain investment priorities. The guidelines should allow
policymakers to adapt priorities to changing circumstances, when
necessary, without abandoning overall planning objectives.
(c) A determination of state, federal, and local public funds
likely to be available through 2050, and the size of any funding
shortfall that may remain.
(d) Recommendations to the Legislature regarding a financing
framework that, on an ongoing basis, fully integrates water resources
needs, including capital investments, and ongoing operational
expenses with the state budget process. The financing framework
should include a recommended mix of state funding sources to pay for
water infrastructure financing and ongoing operational needs,
including General Fund, revenue bonds, and user fees.
(e) An evaluation of the feasibility and applicability of
alternative financing sources to meet the state's water resources
needs and reduce reliance on General Fund expenditures. Alternatives
to be evaluated shall include, but shall not be limited to, all of
the following:
(1) Private financing.
(2) User fees.
(3) Revenue bonds.
(4) Fee-backed general obligation bonds.
(5) Revolving loan programs.
(f) An evaluation of the feasibility of meeting water resources
needs through alternatives to capital outlay. Examples of these
alternatives may include, but are not limited to, savings through
life cycle financing and reducing the need for new infrastructure
through greater efficiency.
(g) Establishment of a means to measure the rate of return on
water resources projects and mechanisms to finance the most
cost-effective projects and the highest priority projects.
(h) A timetable for capital outlay and ongoing expenditures.
SEC. 3. Section 168 is added to the Water Code,
to read:
168. (a) It is the intent of the Legislature that the California
Water Commission should be given authority to allocate state general
obligation bond revenues and other state funds for water resources
projects and programs consistent with the master plan developed
pursuant to Section 167 and the prioritized list developed pursuant
to subdivision (c).
(b) The California Water Commission shall annually review and
audit the expenditure of revenues from resource-related general
obligation bonds that are appropriated for financing and developing
water resources projects and programs in the state, to ensure that
the intent and purposes of the applicable bond acts are met by the
agencies responsible for the allocation of state general obligation
bond revenues.
(c) Consistent with the master plan developed pursuant to Section
167, the California Water Commission shall develop a prioritized list
of projects and programs that improve water supply, water quality,
water conservation, water use efficiency, ecosystem and watershed
restoration, and integrated regional water management planning and
implementation. The commission shall award any state funds that are
appropriated to the commission for state financial assistance for any
of those purposes, including funds allocated pursuant to a general
obligation bond act or any other law, based on that prioritized list.
(d) To the extent consistent with any applicable general
obligation bond act or any other law appropriating state funds, for
the purposes described in this section, the commission shall ensure
that projects and programs funded by state general obligation bond
revenues and other state funds have developed strategic plans for
spending those state funds, that the projects and programs are ranked
by priority, and that performance measures and publicly available
progress reports are provided for the projects and programs.
SEC. 4. Section 10546 of the Water Code is
amended to read:
10546. (a) An integrated regional water management plan prepared
pursuant to this part shall be eligible for funding pursuant to
Section 75026 of the Public Resources Code, and for any funding
authorized on or after January 1, 2009, that is allocated
specifically for implementation of integrated regional water
management.
(b) The California Water Commission shall establish guidelines,
including minimum qualifications and competitive criteria, for the
award of state financial assistance for integrated regional water
management plans prepared pursuant to this part.