The second major issue, after the Budget, was the enactment of a comprehensive water planning and development program. California has not had a major comprehensive water management program since the State Water Plan of the 1960s. (See the Digest of Legislation book for a historical timeline of water in California .) Due to the drought that the state has been facing over the years, legislative leaders and the Governor have made the development of water planning solutions a major issue of the 2009 legislative session. Also, for several years, the Delta has suffered a crisis -- ecosystem, water supply, levee stability, water quality, policy, program, and litigation. In June 2004, a privately owned levee failed and the state spent nearly $100 million to fix it and save an island whose property value was far less. In August 2005, the Department of Fish and Game (DFG) reported a trend showing severe decline in the Delta fishery. In 2006, the Legislature reorganized Delta programs and funding under the Resources Agency Secretary. In 2007, a federal judge, acting under the federal Endangered Species Act, declared illegal certain federal biological opinions about near-extinct fish and restricted water exports from the Delta, to the San Francisco Bay Area, the San Joaquin Valley and Southern California . The Governor, shortly thereafter, called the Legislature into an extraordinary session on water.

Through this enduring Delta crisis, the Legislature and the Governor initiated, in 2006, a process to develop a new long-term vision for the Delta. SB 1574 (Kuehl) of 2006 required a cabinet committee to present recommendations for a Delta vision. The Governor created a Delta Vision Blue-Ribbon Task Force to advise the Cabinet Committee. The Task Force produced an October 2008 Strategic Plan, which the Cabinet Committee largely adopted and submitted the recommendations to the Legislature on January 3, 2009.

The Delta Vision Blue Ribbon Task Force identified seven goals which they felt virtually everyone could agree on to bring forward a comprehensive water plan for the state:

1. Restoring the Delta must be founded on the co-equal goals of water supply reliability and ecosystem restoration.

2. Recognizing and enhancing the unique cultural, recreational, and agricultural values of the Delta as an evolving place.

3. Restoring the Delta ecosystem as the heart of a healthy estuary.

4. Promoting statewide eater conservation, efficiency and sustainable use.

5. Building facilities to improve the existing water conveyance system and expand statewide storage.

6. Reducing the risks to people, property and state interests in the Delta by effective emergency preparedness, appropriate land uses and strategic levee investments.

7. Establishing a new governance structure with the authority, responsibility, accountability, scientific support and secure funding to achieve these goals.

After delivery of the Delta Vision recommendations from the Cabinet Committee and the Strategic Plan on January 3rd, the Legislature began deliberations as to how to respond. These deliberations started with informational hearings in both the Assembly and Senate policy committees. The committees heard from Natural Resources Agency Secretary Mike Chrisman, as to how the Administration proposed responding to the Delta Vision recommendations.

In March, Senate President Pro Tempore Darrell Steinberg and Assembly Speaker Karen Bass convened two bicameral and bipartisan legislator discussion groups regarding Delta Vision, one on creating a new Delta plan (led by Assembly policy committee chair Jared Huffman) and one on Delta governance (led by Senate policy committee chair Fran Pavley). The legislators heard from Delta Vision Task Force members and other Delta experts, and engaged in vigorous water policy discussions, although there was no discussion of specific legislation. Participants gained a broader understanding of the key water and Delta issues facing California . A package of bills were developed and placed into a Conference Committee setting for greater legislative and public consideration of the issues: AB 39 (Huffman), AB 49 (Feuer), SB 12 (Simitian), SB 229 (Pavley) and SB 458 (Wolk). Discussions regarding the bills continued through September 2009. After the September regular session ended, the Governor, not wanting to lose momentum with legislative leaders on this issue, called a special session (Seventh Extraordinary Session) on October 11, 2009, which convened October 14, 2009, to legislate on the following subjects:

1. To consider and act upon legislation to protect and restore the Sacramento - San Joaquin Delta while also improving the reliability and quality of water supplies from that estuary.

2. To consider and act upon legislation to address the short-term and long- term improvement of California’s water management system including development of new surface and groundwater storage and improved conveyance facilities, ecosystem health and conservation strategies.

3. To consider and act upon legislation to appropriate funds, including appropriations for general obligations and lease revenue bonds, to improve water resource management, build additional water storage facilities, develop groundwater aquifers, improve groundwater quality and flood protection, and restore the Sacramento-San Joaquin Delta and other important ecosystem restoration projects.

4. To consider and act upon legislation to place a general obligation bond, and as necessary, a lease revenue bond on the ballot.

On November 4-5, 2009, the following bills were passed by the Legislature and signed into law by the Governor: SB 1 X7 (Simitian and Steinberg) relating to the Delta; SB 2 X7 (Cogdill) the water bond proposal; SB 6 X7 (Steinberg) relating to groundwater; and SB 7 X7 (Steinberg) relating to water diversion and monies for water projects. The following are specifics of these bills.

SB 1 X7 (Simitian and Steinberg)

Delta Governance / Delta Plan

SB 1 X7 establishes the framework to achieve the co-equal goals of providing a more reliable water supply to California and restoring and enhancing the Delta ecosystem. The co-equal goals will be achieved in a manner that protects the unique cultural, recreational, natural resource, and agricultural values of the Delta. Specifically, this bill:

1. Creates the Delta Stewardship Council, consisting of seven members with diverse expertise providing a broad statewide perspective. The Chairperson of the Delta Protection Commission is a permanent member of the Council. The Council is also tasked with:

A. Developing a Delta Plan to guide state and local actions in the Delta in a manner that furthers the co-equal goals of the Delta restoration and water supply reliability.

B. Developing performance measures for the assessment and tracking of progress and changes to the health of the Delta ecosystem, fisheries, and water supply reliability.

C. Determining if a state or local agency project in the Delta is consistent with the Delta Plan and the co-equal goals, and acting as the appellate body in the event of a claim that such a project is inconsistent with the goals.

D. Determining the consistency of the Bay-Delta Conservation Plan 20 (BDCP) with the co-equal goals.

2. Ensures that the Department of Fish and Game and the State Water Resources Control Board identify the water supply needs of the Delta estuary for use in determining the appropriate water diversion amounts associated with BDCP.

3. Establishes the Sacramento-San Joaquin Delta Conservancy to implement ecosystem restoration activities within the Delta. In addition to the restoration duties the Conservancy is required to:

A. Adopt a strategic plan for implementation of the Conservancy goals.

B. Promote economic vitality in the Delta through increased tourism and the promotion of Delta legacy communities.

C. Promote environmental education about, and the public use of public lands in the Delta.

D. Assist in the preservation, conservation, and restoration of the region agricultural, cultural, historic, and living resources.

4. Restructures the current Delta Protection Commission (DPC), reducing the membership from 23 to 15 members, and tasks DPC with the duties of:

A. Adopting an economic sustainability plan for the Delta, this is to include flood protection recommendations to state and local agencies.

B. Submitting the economic sustainability plan to the Delta Stewardship Council for inclusion in the Delta Plan.

5. Appropriates funding from Proposition 84 to fund the Two-Gates Fish Protection Demonstration Program, a project in the central Delta which will utilize operable gates for protection of sensitive species and management of water supply.

SB 6 X7 (Steinberg)

Groundwater Monitoring

SB 6 X7 requires, for the first time in California history, that local agencies monitor the elevation of their groundwater basins to help better manage the resource during both normal water years and drought conditions. Specifically, this bill:

1. Requires the Department of Water Resources (DWR) to establish a priority schedule for the monitoring of groundwater basins and the review of groundwater elevation reports, and to make recommendations to local entities to improve the monitoring programs.

2. Requires DWR to assist local monitoring entities with compliance with this statute.

3. Allows local entities to determine regionally how best to set up their groundwater monitoring program, crafting the program to meet their local circumstances.

4. Provides landowners with protections from trespass by state or local entities.

5. Provides that if the local agencies fail to implement a monitoring program and/or fail to provide the required reports, DWR may implement the groundwater monitoring program for that region.

6. Provides that failure to implement a monitoring program will result in the loss of eligibility for state grant funds by the county and the agencies responsible for performing the monitoring duties.

SB 7 X7 (Steinberg)

Statewide Water Conservation

SB 7 X7 creates a framework for future planning and actions by urban and agricultural water suppliers to reduce California water use. For the first time in California ’s history, this bill requires the development of agricultural water management plans and requires urban water agencies to reduce statewide per capita water consumption percent by 2020. Specifically, this bill:

1. Establishes multiple pathways for urban water suppliers to achieve the statewide goal of a 20% reduction in urban water use. Specifically, urban water suppliers may:

A. Set a conservation target of 80% of their baseline daily per capita water use.

B. Utilize performance standards for water use that are specific to indoor, landscape, and commercial, industrial and institutional uses.

C. Meet the per capita water use goal for their specific hydrologic region as identified by DWR and other state agencies in the 20% by 2020 Water Conservation Plan.

D. Use an alternate method that is to be developed by DWR before December 31, 2010.

2. Requires urban water suppliers to set an interim urban water use target and meet that target by December 31, 2015, and meet the overall target by December 31, 2020.

3. Requires DWR to cooperatively work with the California Urban Water Conservation Council to establish a task force that shall identify best management practices to assist the commercial, industrial and institutional sector in meeting the water conservation goal.

4. Requires agricultural water suppliers to measure water deliveries and adopt a pricing structure for water customers based at least in part on quantity delivered, and, where technically and economically feasible, implement additional measures to improve efficiency.

5. Requires agricultural water suppliers to submit Agricultural Water Management Plans beginning December 31, 2012, and include in those plans information relating to the water efficiency measures they have undertaken and are planning to undertake.

6. Makes ineligible for state grant funding any urban or agricultural water supplier who is not in compliance with the requirements of this bill relating to water conservation and efficient water management.

7. Requires DWR to, in 2013, 2016 and 2021, report to the Legislature on agricultural efficient water management practices being undertaken and reported in agricultural water management plans.

8. Requires DWR, the State Water Resources Control Board (SWRCB), and other state agencies to develop a standardized water information reporting system to streamline water reporting required under the law.

SB 8 X7 (Steinberg)

Water Diversion and Use/Funding

SB 8 X7 improves accounting of the location and amounts of water being diverted by recasting and revising exemptions from the water diversion reporting requirements under current law. Additionally, this bill appropriates existing bond funds for various activities to benefit the Delta ecosystem and secure the reliability of the state’s water supply, and to increase staffing at the SWRCB to manage the duties of this statute. Specifically, this bill:

1. Provides a stronger accounting of water diversion and use in the Delta by removing an exemption from reporting water use by in Delta water users.

2. Redefines the types of diversions that are exempt from the reporting requirement.

3. Assesses civil liability and monetary penalties on diverters who fail to submit the required reports, and for willful misstatements, and/or tampering with monitoring equipment.

4. Appropriates $546 million from Propositions 1E and 84, in the following manner:

A. $250 million (Proposition 84) for integrated regional water management grants and expenditures for projects to reduce dependence on the Delta.

B. $202 million ($32 million Proposition 84 and $170 million Proposition 1E) for flood protection projects in the Delta to reduce the risk of levee failures that would jeopardize water conveyance.

C. $70 million (Proposition 1E) for stormwater management grants.

D. $24 million (Proposition 84) for grants to local agencies to develop or implement Natural Community Conservation plans.

5. Appropriates $3.75 million from the Water Rights Fund to the SWRCB for staff positions to manage the duties in this bill relating to water diversion reporting, monitoring and enforcement.

6. Appropriates $3.75 million from the Water Rights Fund to the SWRCB for staff positions to manage the duties in this bill relating to water diversion reporting, monitoring and enforcement.

SB 2 X7 (Cogdill)

State Water Bond

SB 2 X7 (Cogdill) the Safe, Clean, and Reliable Drinking Water Supply Act of 2010 is an $11.14 billion general obligation bond proposal that would provide funding for California’s aging water infrastructure and for projects and programs to address the ecosystem and water supply issues in California. The bond is comprised of seven categories, including drought relief, water supply reliability, Delta sustainability, statewide water system operational improvement, conservation and watershed protection, groundwater protection and water quality, and water recycling and water conservation.

Piechart of distribution of Water Supply Act of 2010 FundsTotal: $11.14 billion

Drought Relief - $455 million. This funding will be available for local and regional drought relief projects that reduce the impacts of drought conditions, including the impacts of reductions to Delta diversions. Projects will include water conservation and water use efficiency projects, water recycling, groundwater cleanup and other water supply reliability projects including local surface water storage projects that provide emergency water supplies and water supply reliability in drought conditions. Funds will be available to disadvantaged communities and economically distressed areas experiencing economic impacts from the drought for drought relief projects and programs. Funds will also be available to improve wastewater treatment facilities to protect water quality or prevent contamination of surface water or groundwater resources.

Delta Sustainability - $2.25 billion. This bond will provide funds for projects to assist in maintaining and restoring the Delta as an important ecosystem. These investments will help to reduce the seismic risk to water supplies derived from the Delta, protect drinking water quality and reduce conflict between water management and environmental protection.

Water Supply Reliability - $1.4 billion. These funds would be in addition to prior funding provided by Proposition 50 and Proposition 84 and would support the existing Integrated Regional Water Management (IRWM) program. IRWM is designed to encourage integrated regional strategies for management of water resources that will protect communities from drought, protect and improve water quality and improve local water security by reducing dependence on imported water. The bond would provide funds for water supply projects in 12 regions throughout the state and would also be available for local and regional conveyance projects that support regional and interregional connectivity and water management.

North Coast - $45 million

San Francisco Bay - $132 million

Central Coast - $58 million

Los Angeles subregion - $198 million

Santa Ana subregion - $128 million

San Diego subregion - $87 million

Sacramento River - $76 million

San Joaquin River - $64 million

Tulare/Kern - $70 million

North/South Lahontan - $51 million

Colorado River Basin - $47 million

Mountain Counties Overlay - $44 million

Interregional Projects - $50 million

Statewide Water System Operational Improvement - $30.0 billion. This funding would be dedicated to the development of additional water storage, which, when combined with other water management and flood system improvement investments being made, can increase reliability and offset the climate change impacts of reduced snow pack and higher flood flows. Eligible projects for this funding include surface storage projects identified in the CALFED Bay-Delta Record of Decision; groundwater storage projects and groundwater contamination prevention or remediation projects that provide water storage benefits; conjunctive use and reservoir reoperation projects; local and regional surface storage projects that improve the operation of water systems in the state and provide public benefits.

The bond provides that water suppliers who would benefit from new storage will pay their share of the total costs of the project while the public benefits of new water storage can be paid for by this general obligation bond.

Groundwater Protection and Water Quality - $1 billion. To protect public health, funds will be available for projects to prevent or reduce the contamination of groundwater that serves as a source of drinking water. Funds will also be used to finance emergency and urgent actions on behalf of disadvantaged communities and economically distressed areas to ensure that safe drinking water supplies are available to all Californians.

Water Recycling and Water Conservation - $1.25 billion. Funds will be available for water recycling and advanced treatment technology projects that recycle water or that remove salts and contaminants from water sources. Funds will also be available for urban and agricultural water conservation and water use efficiency plans, projects, and programs. These funds will assist urban water users in achieving water conservation targets.

Conservation and Watershed Protection - $1.785 billion. Funds will be available, through a 50-50 cost share program, for ecosystem and watershed protection and restoration projects in 21 watersheds throughout the state, including coastal protection, wildlife refuge enhancement, fuel treatment and forest restoration, fish passage improvement and obsolete dam removal.

Coastal counties and watersheds - $250 million

Wildlife Conservation Board - $365 million

San Gabriel and Lower Los Angeles River watersheds - $75 million

Santa Monica Mountains Conservancy - $75 million

Baldwin Hills Conservancy - $20 million

Santa Monica Bay watershed - $25 million

Coastal salmonid restoration - $50 million

Lake Tahoe watershed restoration - $100 million

Farmland Conservancy Program - $20 million

River parkways and urban streams restoration - $50 million

Sierra Nevada Conservancy - $75 million

Salton Sea restoration - $100 million

Watershed climate change impacts and adaptation - $10 million

Watershed education facilities - $30 million

Waterfowl habitat preservation - $10 million

Forest restoration - $100 million

Klamath dam removal - $250 million

Siskiyou County economic development offset - $20 million

Agricultural water use efficiency research - $50 million

Ocean protection - $50 million

CVPIA (Central Valley Project Improvement Act) fish passage improvement - $60 million

Another major development for water came about with the passage of the American Recovery and Reinvestment Act of 2009 (ARRA) which provided federal stimulus funds to the state’s to be expended for various infrastructure projects, of which water was one. California received $443 million for water projects, $160 million for drinking water projects and $283 for wastewater programs. ARRA has a short time frame for distribution of the funds before reverting back to the federal government. ARRA established a goal of using at least 50% of the funds for activities that can be initiated no later than June 17, 2009. All water project funds must be encumbered by February 17, 2010, and all projects must begin no later than February 2010.

SB 27XXX (Negrete McLeod), which was enacted into law, facilitated the state receiving the monies. It changed California law to comply with ARRA requirements for receipt of certain state water Revolving Fund money for water quality projects. Specifically, ARRA requires California to issue 50% of the funds via grants (“principal forgiveness”). State law limits “grant” funding (versus “loan” funding) to public systems that serve disadvantaged communities where median income is less than 80% of statewide median income. State law does not allow for a forgiveness of loans nor does it provide for a negative interest rate. The maximum “grant” amount in state law is $1 million. Thus, this bill changes these requirements to allow conformance specifically to ARRA’s provisions. SB 27XXX also expanded the federal assistance for Clean Water Act projects to include grants.

The term “financial assistance” under the State Water Pollution Control Revolving Fund specifically excludes grants, but the SWRCB may provide grants under the related “Small Community Grant Fund.” This difference allows additional assistance for smaller disadvantaged communities that lack the economic base to repay a loan, while larger cities with an economic base may obtain loan assistance at low rates. In recent years, the Legislature has considered the lack of resources of small rural communities with unsafe drinking water and, last year, appropriated several million dollars for projects to address the issue. On March 17th, SWRCB adopted guidelines for how it would use these funds, including:

1. $70 million for “subsidization” (federal term for grants and other forgiveness options) for disadvantaged communities, with a priority for small communities.

2. $70 million to restart stalled bond projects.

3. $60 million for 0%-interest loans for innovative projects (e.g. water recycling).

4. $80 million (plus $220 million from regular federal funding) for 1% interest loans for any agency.

As of October 22, 2009, a total of $717 million has been awarded or approved as loans from ARRA and state funding for 160 projects in California .

Another issue affecting water in 2009 was the continuation of the drought for a third year. In order to ensure farmers, ranchers, and residents were protected, the Governor’s Administration took the following action:

1. On February 27th, the Governor proclaimed a state of emergency and ordered immediate action to manage and combat California ’s third consecutive year of drought.

2. On June 19th, the Governor issued Executive Order S-11-09 authorizing funding under the California Disaster Assistance Act (CDAA) to provide temporary supplemental assistance to local governments and nonprofit organizations that provide food and other aid to those impacted by the drought statewide.

3. On July 16th, the Department of Finance approved nearly $4 million in funding for the Department of Social Services to provide food for a minimum of five weeks to the drought victims in Fresno County .

4. On July 21st, the Governor proclaimed a State of Emergency in Fresno County and directed the California Emergency Management Agency to provide local government assistance under the authority of the CDAA.

5. Beginning July 28th, drought-related food distribution centers were scheduled by the Fresno Food Bank for every first and third Thursdays in Huron, first and third Tuesdays in San Joaquin, second and fourth Fridays in Firebaugh, second and fourth Tuesdays in Mendota, and second and fourth Thursdays in Selma.

6. On August 24th, the Governor submitted California ’s appeal of the denial for a major disaster declaration due to severe drought conditions in Fresno . The Governor’s original request dated June 19th was denied on July 24th. The Federal Emergency Management Agency’s response to the appeal is still pending.

The last issue affecting water was the granting by United States District Judge Oliver Wanger in Fresno of a preliminary injunction against the federal Delta smelt plan which has as its purpose the increased protection for the endangered fish. The Judge agreed with the Wetlands Water District and the San Luis and Delta Mendota Water Authority that the reduction of exports to their agricultural operations will result in “irreparable” economic and environmental harm. According to Wanger, “Plaintiffs have shown that irreparable harm will likely occur in the absence of injunctive relief, including loss of water supplies, damage to permanent crops, including orchards and vineyards, crop loss or reduction in crop productivity, job losses, reductions in public school enrollment, limitations on public services, impaired ability to reduce the toxic effects of salt and other minerals in the soil, groundwater overdraft, increased energy consumption, and land fallowing that causes air quality problems.”

The United States Bureau of Reclamation has developed a 2-Gates Fish Protection which is to be a five-year Demonstration Project validating a new delta smelt behavioral model and to study the effects of modifying flows in the Delta to protect the smelt and other sensitive aquatic species from entrainment in the Central Valley Project and State Water Project export pumps. The Bureau states that “research suggests that the pre-spawning migration of adult delta smelt is tied to sediment/suspended particles in the water (turbidity). Temporary gates would be placed across Old River and Connection Slough in the central Delta and operated from December to March to keep turbid water away from the … pumps, thus keeping adult delta smelt away from the pumps, and in March and June to prevent larvae and juvenile delta smelt from being entrained by the export pumps.” SB 1 X7 (Simitian) appropriates $28 million to the Department of Water Resources for expediting for this project. At the present time, the project is still in its draft stage with a hearing being held and comments from various parties being ascertained.

Other water legislation of note that was enacted included SB 310 (Ducheny) allowing local government agencies that have permits for stormwater systems to voluntarily create a watershed improvement plan to improve stormwater management and allowing participating agencies to assess fees on activities that generate stormwater pollution to pay for the implementation of plans approved by the regional water board; SB 790 (Pavley) authorizing grants for projects designed to implement or promote low-impact development that will contribute to the improvement of water quality or reduce stormwater runoff and for projects designed to implement specified stormwater management plans; authorizing a city, county, or special district to develop, jointly or individually, stormwater management plans that meet certain requirements; and authorizing a regional water management group to coordinate its planning activities to address or incorporate into its plan any stormwater management planning that is undertaken pursuant to the bill’s provisions; AB 626 (Eng) requiring the Department of Water Resources to achieve the 10% statewide allocation of Integrated Regional Water Management funding within each region; and AB 975 (Fong) requiring water corporations with 500 or more service connections regulated by the Public Utilities Commission to install water meters on new service connections and on unmetered connections by 2025.

The Governor vetoed AB 1242 (Ruskin) which would have established, in law, a state policy that all residents of the state have a right to clean, affordable, and accessible drinking water and would have directed relevant state agencies to take reasonable steps to implement the policy.