BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1168
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          SENATE THIRD READING
          SB 1168 (Pavley)
          As Amended  August 19, 2014
          Majority vote 

           SENATE VOTE  :24-12  
           
           WATER, PARKS & WILDLIFE   9-4   APPROPRIATIONS      11-5        
           
           ----------------------------------------------------------------- 
          |Ayes:|Rendon, Bocanegra, Fong,  |Ayes:|Gatto, Bocanegra,         |
          |     |Frazier, Gatto, Gomez,    |     |Bradford,                 |
          |     |Gonzalez, Rodriguez,      |     |Ian Calderon, Campos,     |
          |     |Yamada                    |     |Gomez, Holden, Pan,       |
          |     |                          |     |Quirk, Ridley-Thomas,     |
          |     |                          |     |Weber                     |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Bigelow, Dahle, Beth      |Nays:|Bigelow, Donnelly, Jones, |
          |     |Gaines, Gray              |     |Linder, Wagner            |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 

           SUMMARY  :  Requires adoption of a sustainable groundwater  
          sustainability plan (GSP) by January 1, 2020, for all high or  
          medium priority basins as determined by the Department of Water  
          Resources (DWR) according to specified criteria, unless the  
          basin is legally adjudicated or the local agency establishes it  
          is otherwise being sustainably managed.  Specifically,  this  
          bill  :  

          1)Makes findings including, but not limited to, California's  
            high reliance on groundwater to meet its water needs; the  
            necessity of integrated surface and groundwater management in  
            order to meet the state's water management goals; and the  
            failed wells, deteriorated water quality, environmental  
            damage, and irreversible land subsidence that occur when  
            groundwater is not properly managed.

          2)Establishes that it is the policy of the state that all  
            groundwater basins are managed sustainably for multiple  
            economic, social and environmental benefits and that such  
            management is best achieved locally based on best available  
            science.








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          3)Enacts the Sustainable Groundwater Management Act (Act) with  
            the stated intent of empowering local groundwater agencies to  
            sustainably manage groundwater basins through the development  
            of GSPs.

          4)Defines sustainable groundwater management, among other terms.

          5)Encourages the voluntary participation of California Native  
            tribes and federal agencies in sustainable groundwater  
            management while preserving and acknowledging the federally  
            reserved rights of federally recognized Indian tribes.

          6)Specifies that groundwater basins are those identified in  
            DWR's Bulletin No. 118, as it may be amended, and includes  
            subbasins.

          7)Requires DWR, by January 31, 2015, to prioritize each basin as  
            either a high, medium, low, or very low priority using factors  
            under the existing California Statewide Groundwater Elevation  
            Monitoring (CASGEM) program that include, but are not limited  
            to, population, extent of public wells, overlying irrigated  
            acreage, reliance on groundwater, and any documented impacts  
            upon the basin from overdraft, subsidence, saline intrusion  
            and other water quality degradation.

          8)Requires that high and medium priority basins be sustainably  
            managed through a GSP but excepts:

             a)   Basins, or portions of basins, that were subject to a  
               groundwater adjudication; and,

             b)   Basins that a local agency can demonstrate are already  
               being sustainably managed.

          9)Encourages low and very low priority basins to manage through  
            a GSP but, should they voluntarily choose to do so, exempts  
            them from any State compliance actions.

          10)Allows any local agency or combination of agencies to  
            establish a groundwater sustainability agency (GSA) for the  
            purpose of developing and implementing a GSP.

          11)Recognizes and lists special districts that were created in  








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            legislation for the purpose of managing groundwater and makes  
            those districts the exclusive entities within their boundaries  
            with authority to comply with the Act, unless they choose to  
            opt out.

          12)Allows a city or county to be the GSA or, in the case of an  
            area where no local agency has assumed management, presumes  
            the county to be the GSA unless the county opts out.  If the  
            county opts out and there is no other local agency, requires  
            reporting of groundwater extractions directly to the State  
            Water Resources Control Board (State Water Board).

          13)Requires a local agency or combination of local agencies that  
            is electing to be, or forming, a GSA to notify DWR of the  
            intent to be a GSA and provide a notice to DWR that includes  
            the proposed boundaries of the GSA, among other information.   
            Requires DWR to post the notice to its website.

          14)Following public notice, a public hearing, and final action  
            to become a GSA, requires the GSA to notify DWR within 30 days  
            and include copies of pertinent documents, as specified.   
            Requires DWR to post the final notice and documents to its Web  
            site.  Ninety days following posting by DWR, the GSA is  
            presumed to be the exclusive GSA for its boundaries.

          15)Provides for public involvement in the development of GSPs  
            and sets forth a diverse set of interests that should be  
            considered by the GSA during that process. 

          16)Empowers GSAs to collect information regarding the condition  
            of the basin and then develop and implement a GSP using, as  
            the GSA chooses, powers and authorities provided under the Act  
            including, but not limited to:

             a)   Acquiring land and water to carry out the plan,  
               including but not limited to spreading, storing, retaining,  
               percolating, transporting, or reclaiming water to recharge  
               the basin or provide water supplies in-lieu of groundwater;

             b)   Monitoring for compliance and limiting extractions;

             c)   Proposing, collecting, updating and enforcing fees,  
               consistent with all statutory and Constitutional  
               requirements; and 








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          17)Requires, by June 1, 2016, that DWR develop guidelines  
            regarding:

             a)   GSP components;

             b)   Coordination of multiple GSPs for a basin; and,

             c)   Alternative compliance, including submitting an existing  
               plan as a functional equivalent of a GSP or submitting an  
               analysis of basin conditions that demonstrates the basin is  
               being sustainably managed.

          18)Requires that a GSP be completed, adopted, and submitted to  
            DWR by January 1, 2020, in those high and medium priority  
            basins that require a GSP.  

          19)Exempts the preparation and adoption of a GSP from the  
            California Environmental Quality Act but does not exempt a  
            project or action to implement the GSP.

          20)Requires GSPs to meet certain standards including:

             a)   Encompassing an entire basin or subbasin; and

             b)   Being designed to achieve sustainable groundwater  
               management within 20 years of adoption with progress  
               reports to DWR and the State Water Board every five years.

          21)Requires a GSA to annually report to DWR its groundwater  
            elevation data, aggregated extraction data, use or  
            availability of surface water for recharge or in-lieu  
            supplies, total water use, and change in groundwater storage.

          22)Allows DWR to adjust basin boundaries, as specified, and  
            re-prioritize low and very low basins according to criteria  
            that include adverse impacts to habitat and surface water  
            resources.  

          23)Provides that if a basin is reprioritized to medium or high,  
            it shall have two years from the date of reprioritization to  
            form a governance entity for sustainable management or submit  
            an alternate means of establishing the basin is sustainably  
            managed.  If no alternate means is approved, allows five years  








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            to adopt a GSP in compliance with the Act.

          24)Prohibits the adoption or renewal of existing groundwater  
            management plans that do not meet the requirements for a GSP  
            but allows such plans to remain in effect until a GSP is  
            adopted.

          25)Allows a GSA to become a CASGEM monitoring agency.

          26)Contains chaptering language that only allows this bill to  
            become operative if AB 1739 (Dickinson) of the current  
            legislative session, is enacted and becomes operative this  
            session.


           EXISTING LAW  :

          1)Provides the State Water Board with broad powers to regulate  
            the waste and unreasonable use of water, including  
            groundwater.

          2)Categorizes groundwater as either a subterranean stream  
            flowing through a known and definite channel or percolating  
            groundwater.  Groundwater that is a subterranean stream is  
            subject to the same State Water Board water right permitting  
            requirements as surface water. There is no statewide  
            permitting requirement for percolating groundwater, which is  
            the majority of groundwater.

          3)Encourages local agencies to work cooperatively to manage  
            groundwater resources within their jurisdictions and, if not  
            otherwise required by law, to voluntarily adopt GMPs.

          4)Requires that a GMP contain components related to funding,  
            management, and monitoring in order for a local agency to be  
            eligible for groundwater project funds administered by DWR.

          5)Allows a GMP to voluntarily contain additional listed  
            components.

          6)Requires all of the groundwater basins identified in DWR's  
            Groundwater Report, Bulletin No. 118, to be regularly and  
            systematically monitored locally and the information to be  
            readily and widely available.








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          7)Requires DWR to perform the groundwater elevation monitoring  
            function if no local entity will do so but then bars the  
            county and other entities eligible to monitor that basin from  
            receiving state water grants or loans.

          8)Requires DWR to prioritize groundwater basins based on  
            multiple factors including, but not limited to, the level of  
            population and irrigated acreage relying on the groundwater  
            basin as a primary source of water and the current impacts on  
            the groundwater basin from overdraft, subsidence, saline  
            intrusion and other water quality degradation.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee:

          1)Increased annual General Fund costs to DWR of approximately $4  
            million beginning in fiscal year (FY) 2019-20 to collect and  
            manage data, complete evaluations, and assist the State Water  
            Board in developing interim plans.  DWR received $22.5 million  
            in the 2014-15 Budget ($2.5 million for FY 2014-15 and $5  
            million each year from FY 2015-16 through FY 2018-19 which  
            will fund Bulletin 118 updates and technical assistance.

          2)Increased annual GF costs of between $200,000 and $600,000 for  
            two years for State Water Board to adopt a fee schedule and  
            develop evaluations guidelines.  Increased out-year costs of  
            between $1 million and $2.5 million (special fund) including  
            state interim plans to be covered by fee revenues.

          3)Minor, if any, reimbursable local government costs.   

           COMMENTS  :  As Benjamin Franklin warned over 200 years ago, we  
          know the worth of water when the well is dry.  Unfortunately,  
          for many Californians that is a stark reality or a pending  
          calamity that has been coming in slow-motion for 50 years.  In  
          its August 15, 2014, editorial the Sacramento Bee notes that it  
          was in 1962 that an Assembly Interim Committee on Water dodged  
          the issue of needed groundwater management by advising the  
          Legislature it should act if the situation got worse.  It got  
          worse.  Sixteen years later, in 1978, the Governor's Commission  
          to Review California Water Rights Law, a group commissioned by  
          Governor Jerry Brown, found the groundwater situation was  
          critical and that comprehensive local management had not been  








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          undertaken in many overdrafted areas of the state.  Again, there  
          was no action. 

          An August 18, 2014, Los Angeles Times column asserts there is no  
          better time to act than now.  The Times notes that the  
          recently-passed $7.545 bond for water-related projects and  
          programs that is scheduled for the November 2014 ballot contains  
          $100 million for planning and implementing groundwater  
          management, $800 million for cleaning up groundwater, $700  
          million for recycling and $2.7 billion for dam building.  As the  
          Los Angeles Times column states, these are projects that can  
          help replenish underground basins but it will take pumping rules  
          to assure taxpayers that they're getting their money's worth.   
          The Times Los Angeles column concludes, the State has been  
          ignoring experts' increasing warnings regarding groundwater  
          depletions for decades and holding off on groundwater regulation  
          since statehood but together this bill and a related measure AB  
          1739, seek to empower local governments to manage groundwater  
          sustainably while allowing the state to step in if they fail to  
          do so.

          While California uses more groundwater than any other state, it  
          is the last in the Union to lack an enforceable set of statewide  
          groundwater management standards.  Groundwater informational  
          hearings in the Assembly Water, Parks & Wildlife Committee and  
          the Senate Natural Resources & Water Committee in March 2014  
          revealed disturbing statistics on the current degradation of  
          some of California's groundwater basins:  between 2003 and 2009  
          the groundwater aquifers for the Central Valley and its major  
          mountain water source, the Sierra Nevadas, lost almost 26  
          million acre-feet of water - nearly enough water combined to  
          fill Lake Mead, America's largest reservoir.  The findings  
          reflected the effects of California's extended drought and the  
          resulting increased rates of groundwater being pumped for human  
          uses, such as irrigation.  

          In response to the crisis two bills were introduced in the  
          Legislature, this bill and AB 1739.  Following introduction of  
          both bills the authors began extensive stakeholder outreach  
          facilitated by both a nonprofit nonpartisan foundation and an  
          association of water agencies.  During this time, the  
          Administration of Governor Brown also proposed statutory  
          language to manage groundwater, made it available on the  
          internet, and started a series of public stakeholder meetings.   








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          In July 2014, four professionally facilitated public meetings  
          were convened and led by representatives of both authors as well  
          as the Administration.  Following those meetings language was  
          taken from each bill and the Administration's proposal and  
          crafted into one integrated statute.  That language was amended  
          into both this bill and AB 1739, making them identical.  Both  
          authors also became coauthors of each bill.  When the integrated  
          statute came into print, another professionally-facilitated  
          stakeholder meeting was held to get additional input on  
          refinements.  

          The August 18, 2014 amendments to this bill and AB 1739 divided  
          the integrated statute into two logical pieces that must be  
          enacted together and included many of the stakeholder-suggested  
          refinements.  This bill contains:  the general policy of the  
          State regarding sustainable groundwater management; the Act's  
          general provisions, including the requirement for high and  
          medium priority basins to manage sustainably, as defined; basin  
          boundary adjustment language; requirements and authorities for  
          establishing GSAs; powers and authorities of GSAs; and, required  
          GSP components.  AB 1739 includes provisions related to  
          coordination between local land use agencies and GSAs as well as  
          those provisions of the Act regarding: DWR technical assistance;  
          GSA financial authorities; GSA enforcement powers; State  
          evaluation and assessment of GSPs; and, State intervention  
          should the requirements of the statute not be met, including  
          authority for the State Water Board to require reporting of  
          groundwater withdrawals and charge fees for its interim  
          management activities.  In many respects this bill contains the  
          actions related to establishing GSAs and planning GSPs while AB  
          1739 contains most of the complimentary implementation tools and  
          enforcement authorities, both State and local.

          The author states that this bill is needed because California  
          faces a groundwater crisis.  The author points out that the  
          cumulative overdraft of our groundwater basins is equivalent to  
          the entire amount of water stored in Lake Tahoe and that in many  
          areas of the state, local groundwater managers lack the tools  
          and authorities to manage the groundwater basins.  The author  
          concludes that without improved local management the overdraft  
          in many parts of the state will get even worse over the next  
          several years.  Other supporters add that a new statewide policy  
          for sustainable groundwater management is urgently needed and  
          that this bill addresses one of California's most pressing water  








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          management issues.  Supporters point out that breadth of the  
          stakeholder involvement process that was used in order to help  
          ensure the right balance of provisions to empower local  
          groundwater management agencies with new tools and authorities  
          and to create an appropriate state backstop that will allow the  
          state to intervene only when needed.

          Opponents state they share the author's interest in improving  
          groundwater management but are concerned about the broad scope  
          and specific impacts of this measure.  Opponents believe this  
          bill is extraordinarily ambitious and comprehensive and that in  
          its current form it would substantially alter the California  
          landscape and economy for generations to come.  Opponents are  
          concerned that this bill could require hundreds of millions of  
          dollars in implementation costs and are worried about potential  
          affects to existing groundwater rights and generate litigation.   
          Opponents maintain the legislation goes beyond the goal of  
          sustainable groundwater management and will adversely affect the  
          agricultural economy and the landscape that is dependent upon it  
          and cause a potential devaluation in some land thus affecting  
          property tax collections in some areas and the services and  
          programs that are dependent upon them. Opponents advocate  
          delaying action in order to avoid what they believe would be  
          unanticipated consequences.  


           Analysis Prepared by  :    Tina Cannon Leahy / W., P. & W. / (916)  
          319-2096 


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