BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
                             Senator Fran Pavley, Chair
                                2015 - 2016  Regular 

          Bill No:            SB 1262         Hearing Date:    March 29,  
          2016
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          |Author:    |Pavley                 |           |                 |
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          |Version:   |February 18, 2016                                    |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Dennis O'Connor                                      |
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                           Subject:  Water supply planning


          BACKGROUND AND EXISTING LAW
          
          California has a number of interconnecting laws that together  
          attempt to ensure that water supply availability is given proper  
          consideration when making land use decisions, and increasingly  
          vice versa.

          1.Under California's Planning and Zoning Law:

             Before a city or county adopts or substantially amends a  
               general plan, the planning agency must refer the proposed  
               action to a number of entities, including:
                     A public water system with 3,000 or more service  
                 connections that serves water to customers within the  
                 area covered by the proposal. The public water system  
                 shall have at least 45 days to comment on the proposed  
                 plan, in accordance with subdivision (b), and to provide  
                 the planning agency with the information set forth in  
                 Section 65352.5.
                     Any groundwater sustainability agency (GSA) that has  
                 adopted a groundwater sustainability plan (GSP) under the  
                 Sustainable Groundwater Management Act (SGMA) or local  
                 agency that otherwise manages groundwater pursuant to  
                 other provisions of law or a court order, judgment, or  
                 decree within the planning area of the proposed general  
                 plan.







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                     The State Water Resources Control Board (SWRCB), if  
                 it has adopted an interim plan pursuant to Chapter 11  
                 (commencing with Section 10735) of Part 2.74 of Division  
                 6 of the Water Code that includes territory within the  
                 planning area of the proposed general plan.

             Upon receipt of such a proposed action:
                     A public water system is to provide the planning  
                 agency with information relevant to determining the  
                 adequacy of existing and planned future water supplies to  
                 meet existing and planned future demands on these water  
                 supplies, including such things as:
                  o         The current version of its urban water  
                    management plan (UWMP).
                  o         The current version of its capital improvement  
                    program or plan.
                  o         A description of the source or sources of the  
                    total water supply currently available to the water  
                    supplier by water right or contract, taking into  
                    account historical data concerning wet, normal, and  
                    dry runoff years.
                  o         A description of all proposed additional  
                    sources of water supplies for the water supplier.
                     A GSA is to provide the planning agency with a  
                 report on the anticipated effect of the proposed action  
                 on implementation of a groundwater sustainability plan,  
                 along with a GSP or alternative plan, and information  
                 regarding any adjudication of groundwater rights in the  
                 basin.
                     The SWRCB is not required to provide any  
                 information.

          1.Under what are often called California's "Show Me the Water  
            Bills" [aka SBs 610 & 221, (Ch.s 643 & 642, Stat. 2001)]: 

             a.   A project is defined, generally, as:
                     A residential development of 500 or more units, or a  
                 project that would demand an equivalent amount of water  
                 as a 500 unit residential development.
                     If a public water system that would serve the  
                 project has fewer than 5,000 service connections, then a  
                 project means a proposed development that would account  
                 for an increase of 10 percent or more of the number of  
                 the public water system's existing service connections.








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             a.   A city or county, at the time that it determines that a  
               project is subject to the California Environmental Quality  
               Act (CEQA), must identify any water system that that may  
               supply water for the project. (This is typically at the  
               time of a general plan amendment.)

               If the city or county is not able to identify any public  
               water system that may supply water for the project, the  
               city or county must prepare a water assessment after  
               consulting with any entity serving domestic water supplies  
               whose service area includes the project site, the local  
               agency formation commission, and any public water system  
               adjacent to the project site. 

             b.   The city or county, at the time it determines a project  
               is subject to CEQA, must ask each and any of the public  
               water system identified (above) to determine whether the  
               projected water demand associated with a proposed project  
               was included as part of the most recently adopted UWMP.
                     If the projected water demand was accounted for in  
                 the most recently adopted UWMP, the public water system  
                 may incorporate information from the UWMP in preparing  
                 the elements of a water supply assessment (described  
                 below). 
                     If the projected water demand was not accounted for  
                 in the most recently adopted UWMP, or the public water  
                 system has no UWMP, the water supply assessment is  
                 required to include a discussion regarding whether the  
                 public water system's total projected water supplies  
                 available during normal, single dry, and multiple dry  
                 water years during a 20-year projection will meet the  
                 projected water demand associated with the proposed  
                 project, in addition to the public water system's  
                 existing and planned future uses.
                     If the city or county must prepare the water  
                 assessment, the water supply assessment for the project  
                 must include a discussion regarding whether the total  
                 projected water supplies, determined to be available by  
                 the city or county for the project during normal, single  
                 dry, and multiple dry water years during a 20-year  
                 projection, will meet the projected water demand  
                 associated with the proposed project, in addition to  
                 existing and planned future uses, including agricultural  








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                 and manufacturing uses. 

             a.   The water supply assessment must identify any existing  
               water supply entitlements, water rights, or water service  
               contracts relevant to the identified water supply for the  
               proposed project, and describe the quantities of water  
               received in prior years by the public water system, or the  
               city or county, under the existing water supply  
               entitlements, water rights, or water service contracts. 

             b.   If a water supply for a proposed project includes  
               groundwater, the following additional information must be  
               included in the water supply assessment:
                     A review of any information contained in the UWMP  
                 relevant to the identified water supply for the proposed  
                 project.
                     A description of any groundwater basin or basins  
                 from which the proposed project will be supplied. 
                   For those basins for which a court or the board has  
                 adjudicated the rights to pump groundwater, the  
                 assessment must include a copy of the order or decree  
                 adopted by the court or the board and a description of  
                 the amount of groundwater the public water system, or the  
                 city or county, has the legal right to pump under the  
                 order or decree. 
                   For basins that have not been adjudicated, the  
                 assessment must include information regarding whether DWR  
                 has identified the basin or basins as overdrafted or has  
                 projected that the basin will become overdrafted if  
                 present management conditions continue and a detailed  
                 description by the public water system, or the city or  
                 county, of the efforts being undertaken in the basin or  
                 basins to eliminate the long-term overdraft condition.
                     A detailed description and analysis of the amount  
                 and location of groundwater pumped by the public water  
                 system, or the city or county, for the past five years  
                 from any groundwater basin from which the proposed  
                 project will be supplied. The description and analysis  
                 shall be based on information that is reasonably  
                 available, including, but not limited to, historic use  
                 records.
                     If the city or county was unable to identify a  
                 public water service that may provide water to the  
                 project, a detailed description and analysis of the  








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                 amount and location of groundwater that is projected to  
                 be pumped by the public water system, or the city or  
                 county. The description and analysis shall be based on  
                 information that is reasonably available, including, but  
                 not limited to, historic use records.
                     An analysis of the sufficiency of the groundwater  
                 from the basin or basins from which the proposed project  
                 will be supplied to meet the projected water demand  
                 associated with the proposed project.

               a.     When the project proponent submits a tentative map  
                 for approval by the city or county, the city or county  
                 must include as a condition in any tentative map that  
                 includes a subdivision a requirement that a "sufficient  
                 water supply" shall be available.  Proof of the  
                 availability of a sufficient water supply must be  
                 requested by the subdivision applicant or local agency,  
                 and shall be based on written verification from the  
                 applicable public water system.
                     "Sufficient water supply" means the total water  
                 supplies available during normal, single-dry, and  
                 multiple-dry years within a 20-year projection that will  
                 meet the projected demand associated with the proposed  
                 subdivision, in addition to existing and planned future  
                 uses, including, but not limited to, agricultural and  
                 industrial uses. In determining "sufficient water  
                 supply," all of the following factors shall be  
                 considered:
                  o         The availability of water supplies over a  
                    historical record of at least 20 years.
                  o         The applicability of an urban water shortage  
                    contingency analysis that includes actions to be  
                    undertaken by the public water system in response to  
                    water supply shortages.
                  o         The reduction in water supply allocated to a  
                    specific water use sector under a water shortage  
                    emergency.
                  o         The amount of water that the water supplier  
                    can reasonably rely on receiving from other water  
                    supply projects, such as conjunctive use, reclaimed  
                    water, water conservation, and water transfer,  
                    including programs identified under federal, state,  
                    and local water initiatives.
                     The applicable public water system's written  








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                 verification of its ability or inability to provide a  
                 sufficient water supply that will meet the projected  
                 demand associated with the proposed subdivision must be  
                 supported by substantial evidence. The substantial  
                 evidence may include, but is not limited to, any of the  
                 following:
                  o         The public water system's most recently  
                    adopted UWMP.
                  o         A water supply assessment that was completed  
                    pursuant to Part 2.10 (commencing with Section 10910)  
                    of Division 6 of the Water Code.
                  o         Other information relating to the sufficiency  
                    of the water supply that contains analytical  
                    information that is substantially similar to the water  
                    service reliability assessment required by the Urban  
                    Water Management Planning Act.
                     Where a water supply for a proposed subdivision  
                 includes groundwater, the public water system serving the  
                 proposed subdivision shall evaluate, based on substantial  
                 evidence, the extent to which it or the landowner has the  
                 right to extract the additional groundwater needed to  
                 supply the proposed subdivision. 

          1.Under CEQA, whenever a city or county determines that a  
            project, as defined under the "Show Me the Water Bills," is  
            subject to CEQA, it must comply with the water supply  
            assessment requirements of the "Show Me the Water Bills,"  
            triggered by that determination.

          2.Under the Sustainable Groundwater Management Act (SGMA):

               A GSP must take into account the most recent planning  
                 assumptions stated in local general plans of  
                 jurisdictions overlying the basin.

               A GSP must include, among other things, a description of  
                 the consideration given to the applicable county and city  
                 general plans and a description of the various adopted  
                 water resources-related plans and programs within the  
                 basin and an assessment of how the groundwater  
                 sustainability plan may affect those plans.

               Before initiating the development of a GSP, the GSA must  
                 make available to the public and the Department of Water  








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                 Resources (DWR) a written statement describing the manner  
                 in which interested parties may participate in the  
                 development and implementation of the groundwater  
                 sustainability plan. 

                 Additionally, the GSA must provide the written statement  
                 to the legislative body of any city, county, or city and  
                 county located within the geographic area to be covered  
                 by the plan. 

          PROPOSED LAW
          
          This bill would:

          1.Amend the requirements for a water supply assessment triggered  
            by a city or county determination that a project is subject  
            CEQA as follows:

             a.   Changes the procedures for when a water system is not  
               identified by a city or county or none of the identified  
               water systems are willing to supply the water, to the  
               following:
                     Requires the city or county to prepare a technical  
                 report that includes all of the following:
                  o         The name of each public water system that has  
                    a service area boundary within five miles of any  
                    boundary of the applicant's proposed service area.
                  o         An analysis of the feasibility of a water  
                    system annexing, connecting, or otherwise supplying  
                    domestic water to the project.
                  o         An analysis of the long-term feasibility of  
                    creating a new water system to serve the project,  
                    including, but not limited to, projecting the capacity  
                    of anticipated ratepayers to sustain a water system if  
                    there is the potential that water treatment will be  
                    required in the foreseeable future.
                  o         A description of all actions taken by the city  
                    or county to secure a supply of domestic water from an  
                    existing public water system for the project.
                  o         A description of all actions taken by the  
                    project proponent to pursue a contract for managerial  
                    or operational oversight from an existing public water  
                    system.
                     If the city or county concludes, based on the  








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                 technical report, that it is feasible for a water system  
                 to provide water to the project, the city or county shall  
                 submit their technical report to the local agency  
                 formation commission with jurisdiction over the project.
                     If the local agency formation commission (LAFCo)  
                 declines to approve an annexation or extension of  
                 service, the city or county shall develop a water supply  
                 assessment for the project that includes a discussion on  
                 whether the total projected water supplies, determined to  
                 be available by the city or county for the project during  
                 normal, single dry, or multiple dry water years during a  
                 20-year projection, will meet the projected water demand  
                 associated with the proposed project, in addition to  
                 existing and planned future uses, including agricultural  
                 and manufacturing uses.

             a.   Changes the information requirements for when a water  
               supply for a proposed project includes groundwater from a  
               non-adjudicated basin to the following:
                     For a basin that has not been adjudicated and is  
                 designated as high- or medium-priority under SGMA,  
                 information regarding the following:
                  o         Whether DWR has identified the basin as being  
                    subject to critical conditions of overdraft.
                  o         Whether the SWRCB has designated the basin as  
                    a probationary basin.
                  o         If a GSA has adopted a GSP or submitted an  
                    alternative plan, a copy of that plan.
                     For a basin that has not been adjudicated and is  
                 designated as low- or very-low priority pursuant SIGMA,  
                 Information regarding:
                  o         Whether DWR has identified the basin or basins  
                    as overdrafted or has projected that the basin will  
                    become overdrafted if present management conditions  
                    continue; and if so, 
                  o         A detailed description by the public water  
                    system, or the city or of the efforts being undertaken  
                    in the basin or basins to eliminate the long-term  
                    overdraft condition.

             a.   Prohibits the following from being considered a source  
               of water:
                     Hauled water.
                     Groundwater from a basin designated by the board as  








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                 a probationary basin under SGMA.

             a.   Adds a requirement to the water supply assessment that  
               if a water supply for a proposed project includes water of  
               a quality not sufficient to meet all primary and secondary  
               drinking water standards, the following additional  
               information needs to also be included:
                     A detailed description of the concentration of  
                 contaminants.
                     The proposed method for treating, blending, or  
                 otherwise ensuring that the water will meet drinking  
                 water quality standards.
                     The project cost to achieve drinking water quality.
                     An analysis of the affordability of water for the  
                 project's anticipated residents.

          1.Amend the requirements for a determination of sufficient water  
            supply triggered by project proponent submitting a tentative  
            map for approval by the city or county as follows:

             a.   If a proposed subdivision relies in whole or in part on  
               groundwater, add the following to the list of factors to be  
               considered in determining sufficient water supply:
                     For a basin for which a court or the SWRCB has  
                 adjudicated the rights to pump groundwater, the order or  
                 decree adopted by the court or the SWRCB.
                     For a basin that has not been adjudicated, as  
                 follows:
                  o         For a basin designated as high- or  
                    medium-priority pursuant to Section 10722.4 of the  
                    Water Code, the most recently adopted or revised  
                    adopted groundwater sustainability plan.
                  o         For a basin designated as low- or very-low  
                    priority pursuant to Section 10722.4 of the Water  
                    Code, information as to whether the Department of  
                    Water Resources has identified the basin or basins as  
                    overdrafted or has projected that the basin will  
                    become overdrafted if present management conditions  
                    continue.

             a.   Adds to the list of items to be considered as  
               substantial evidence in support of a determination of  
               sufficient water supply a groundwater sustainability plan  
               adopted under SGMA.








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             b.   When a water supply for a proposed subdivision includes  
               groundwater, groundwater from a basin designated by the  
               SWRCB as a probationary basin under SGMA cannot considered  
               as a water supply.

          1.Make other technical amendments.

          ARGUMENTS IN SUPPORT
          According to the author, "California has a number of  
          interconnecting laws that together attempt to ensure that water  
          supply availability is given proper consideration when making  
          land use decisions, and vice versa.  Among those laws are 2002's  
          SBs 610 (Costa) and 221 (Kuehl), also known as the "show me the  
          water bills." When we passed the Sustainable Groundwater  
          Management Act (SGMA) in 2014, we updated some water and land  
                                                                         use planning laws to reflect SGMA, but not the show me the water  
          bills."

          "SB 1262 (Pavley/Wieckowski), in conjunction with SB 1263  
          (Wieckowski/Pavley), builds on the administration's Affordable  
          Safe Drinking Water Initiative to update the show me the water  
          bills as follows:
        Integrates groundwater sustainability agencies and consideration  
            of groundwater sustainability plans into water supply and land  
            use planning.
        Prohibits use of groundwater to supply new development if the  
            groundwater basin has been deemed out of compliance with SGMA  
            (i.e., is "probationary")
        Prohibits the use of hauled water to comply with show me the  
            water bills.
        Creates a process to discourage creation of new water systems  
            when it is geographically and economically feasible to connect  
            to an existing system."

          ARGUMENTS IN OPPOSITION
          A coalition of building, real estate, and other business  
          interests write, "The bill significantly expands the California  
          Environmental Quality Act (CEQA) and complicates the Subdivision  
          Map Act in ways that make adherence to those processes by  
          project applicants substantially more difficult to achieve."

          "In the spirit of finding workable solutions to the issues you  
          have identified, we respectfully offer the following  








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          approaches."  They then describe three suggestions which can be  
          described as 
           Shift from a project based to programmatic based water/landuse  
            planning approach.
           Revise the proposed procedures for a "technical report" to one  
            that more realistically encourages public water systems to  
            provide water.
           Resolve some "circular" provisions regarding CEQA and LAFCo  
            reviews.

          They conclude: "We believe that the problems we have touched on  
          in the introduced version of the bill are serious but can be  
          remedied. Therefore, we must oppose the measure but we  
          appreciate your consideration of our suggested changes and are  
          ready to assist in seeking solutions."


          COMMENTS
          
           Harmonizing Water/Land Use Planning.   This bill, among other  
          things, attempts to ensure all water and land use planning laws  
          properly reflect the changes in groundwater planning brought on  
          by SGMA.  As noted in the discussion of current planning and  
          zoning law, (see background and existing law 1a & 1b) before a  
          city or county adopts or substantially amends a general plan,  
          the planning agency must refer the proposed action to a number  
          of entities, including the SWRCB.  However, unlike other  
          notified agencies, the SWRCB is not required to provide any  
          information to the city or county, even if the SWRCB has adopted  
          an interim plan for the basin.  (See suggested amendment).

           Provisions Regarding LAFCos Need Work.   In addition to the  
          issues regarding LAFCos raised by business coalition, the  
          California Association of Local Agency Formation Commissions  
          (CALAFCo) and League of California Cities have raised concerns  
          of their own.  CALAFCo writes "The proposed process pertaining  
          to the timing of the required water supply assessment after the  
          LAFCo has denied the application for annexation or extension of  
          service is out of place."  The League similarly is concerned  
          about the "additional burdensome requirements on local  
          governments to identify and determine the capacity and  
          feasibility of another water agency/system annexing or extending  
          its services into the area in which the large project is located  
          when the water supplier in the area cannot sufficiently supply  








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          water."  The LAFCo issues will likely be addressed in the  
          Governance and Finance Committee, should this committee pass  
          this bill. (See below).

           Definition of a Project.   Neither this bill or SB 1263 (see  
          below) change the definition of a project subject to the show me  
          the water bills.  However, there seems to be interest in  
          exploring that option.  

          A coalition of environmental justice groups write  
          "Unfortunately, this legislation lets stand the definition of a  
          subdivision (500 or more connections) which effectively  
          precludes most development from this sensible review process. We  
          urge the authors and the committee to consider a substantial  
          reduction in this number in order to protect new communities and  
          ensure that the state will not have to share the burden of  
          supporting them in future droughts."  

          CALAFCo similarly write "While we have no magic bullet number to  
          offer in terms of what is the "right size" for a project, we  
          believe a threshold of 500 units for projects at the zoning  
          level (water supply assessment pursuant to SB 610) probably  
          captures less than half of the growth, and therefore, less than  
          half of the demand. The 500 unit threshold for subdivisions  
          (written verification pursuant to SB 221) probably captures a  
          very small percentage of subdivision activity. Most projects are  
          considerably smaller. ?  We do feel it is best that thresholds  
          should change."  Moreover, "We believe if there was a lower  
          trigger number for a project, the concern regarding phased  
          development and the demand for water required to adequately  
          supply those new phases will be addressed."

          The authors have indicated that they are willing to explore a  
          different definition as this bill moves forward.


           Related Bills:  
           SB 1263 (Wieckowski/Pavley), strengthens the permitting process  
          for new public water systems to create greater environmental,  
          public health, and financial sustainability of drinking water  
          supplies.

           Double-Referral.  The Rules Committee referred this bill to both  
          the Committee on Natural Resources and Water and to the  








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          Committee on Governance and Finance. Therefore, if this bill  
          passes this committee, it will be referred to the Committee on  
          Governance and Finance, which will consider the issues within  
          their jurisdiction.

          SUGGESTED AMENDMENTS: Note.  To ensure there is sufficient time  
          to amend and hear this bill before the policy bill deadline, the  
          amendments should be taken in the Governance and Finance  
          Committee.
          
          AMENDMENT 1
               Amend GC 106352.5 to require the SWRCB, when notified by  
               city or county of a substantive amendment or adoption of a  
               general plan, and when the SWRCB has adopted an interim  
               plan for the relevant groundwater basin, to require the  
               SWRCB provide the city or county a copy of the interim plan  
               and other relevant information.

          SUPPORT
          Clean Water Action
          Community Water Center
          Leadership Counsel for Justice and Accountability
          Planning and Conservation League
          Sierra Club California

          OPPOSITION
          California Apartment Association
          California Association of Relators
          California Building Industry Association
          California Business Properties Association
          California Chamber of Commerce
          California Independent Petroleum Association

          
                                      -- END --