BILL ANALYSIS                                                                                                                                                                                                    



                   SENATE AGRICULTURE & WATER RESOURCES COMMITTEE
                          Senator Michael J. Machado, Chair

          BILL NO:  AB 1908                     HEARING:  6/1/04
          AUTHOR:  Canciamilla                  FISCAL:  No
          VERSION:  4/12/04                     CONSULTANT:  Dennis  
          O'Connor
          
                                   Recycled water.

          BACKGROUND AND EXISTING LAW

          Under existing law, a publicly owned utility is prohibited from  
          providing a "service similar to" the service that a county water  
          district provides for, on, or to any land within the boundaries  
          of the district that is subject to the lien of a general  
          obligation indebtedness.  

          Separately, under the Public Utilities Code, privately owned  
          water utilities are protected from duplication of service by a  
          public water utility.

          PROPOSED LAW

          This bill would allow a public agency that recycles water to  
          serve that water within the boundaries of a county water  
          district.  Specifically, it:

           Makes legislative findings as to the importance of recycling  
            water and using the recycled water as an additional supply.
           Defines the service of recycled water as not a "service  
            similar to" the service of potable, raw, or untreated water.
           States that this bill does not alter any rights, remedies, or  
            obligations under the Public Utilities Code "duplication of  
            service" statutes.

          COMMENTS

          1.Is Recycled Water A "Service Similar To" The Service Of  
            Potable, Raw, Or Untreated Water?  This is the $64,000  
            question.

            Previous legislative actions treated recycled water different  
            from potable, raw, or untreated water, thereby suggesting  
            recycled water might not be a "service similar to" the service  
            of potable, raw, or untreated water.  For example, the Health  
            and Safety Code places numerous restrictions on the use of  
            recycled water.
            




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            At the same time, the Legislature has encouraged the expanded  
            use of recycled water in lieu of potable water supplies.  For  
            example, the Water Recycling Law finds that the use of  
            recycled water constitutes the development of "new basic water  
            supplies."

            It is possible, given current trends, that while supplying  
            recycled water today might not be a service similar to the  
            service of potable, raw, or untreated water, that in the not  
            too distant future the distinction might become much less  
            clear.  If that is the case, this bill might not have much of  
            a shelf life.
          
          2.Could Remove Obstacles To Greater Use.  Supporters argue that  
            in its 2003 report, the Recycled Water Taskforce highlighted  
            the need to identify and eliminate unnecessary barriers to  
            maximizing water recycling.  They assert that this bill would  
            remove one of the barriers to increasing the use of recycled  
            water.
          
          3.Eliminates Protections For Water Suppliers?  Opponents contend  
            that this bill conflicts with the provisions of existing  
            Public Utilities Code provisions - provisions that protect   
            privately owned water utilities  from duplication of service by  
            a  public water utility  .  However, this bill has an explicit  
            provision stating that this bill does not alter any rights,  
            remedies, or obligations under the Public Utilities Code  
            "duplication of service" statutes.  Moreover, this bill  
            applies only to a  publicly owned utility  which might provide a  
            "service similar to" the service a county water district   
            provides.

          4.May be Moot.  This bill was originally designed to resolve a  
            conflict between the Delta Diablo Sanitation District and the  
            Contra Costa Water District.  However, in a letter dated April  
            19, 2004, the two districts jointly wrote the author that they  
            were working cooperatively on a general agreement, which  
            establishes a process for planning and construction additional  
            water recycling projects in the region.  In light of the  
            status of their discussions, they requested that the author  
            consider not to proceed with this bill.

          PRIOR ACTIONS

          Assembly Floor             61-5
          Assembly Water, Parks, and Wildlife10-2






          AB 1908 -- Page 3


          SUPPORT
          
          California Association of Sanitation Agencies
          East Bay Municipal Utility District

          OPPOSITION
          
          Association of California Water Agencies
          California Water Association