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Warning! This is a not the current version of this legislative bill.
Italicized text includes proposed additions to law or the previous version of the bill.
Struck text includes proposed deletions to law or the previous version of the bill.

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AMENDED IN SENATE APRIL 13, 2011
AMENDED IN SENATE MARCH 23, 2011

INTRODUCED BY Senator Simitian

DECEMBER 6, 2010

An act to add Division 36 (commencing with Section 87000) to the
Water Code, relating to water , and making an appropriation
therefor
.



LEGISLATIVE COUNSEL'S DIGEST


SB 34, as amended, Simitian. California Water Resources Investment
Act of 2011.
(1) Under existing law, various measures provide funding for water
resources projects, facilities, and programs.
This bill would enact the California Water Resources Investment
Act of 2011 to finance a water resources investment program. To
finance the program, the bill would impose on each retail water
supplier in the state an annual charge based on the volume of water
provided in its service area that is provided for nonagricultural
uses and an annual charge based on each acre of land within its
service area that is irrigated for agricultural uses
purposes . The bill would require the State
Board of Equalization to collect the charges from retail water
suppliers in accordance with the Fee Collection Procedures Law, and
would authorize the State Board of Equalization and the Department of
Water Resources to adopt and enforce regulations for the
administration and enforcement of the charges and related
requirements as emergency regulations.
The bill would require the revenues of the charges collected for
purposes of the water resources investment program to be deposited in
the California Water Resources Investment Fund, which would be
established by the bill. The bill would establish a State Investment
Account and 11 an unspecified number of
regional investment accounts within the fund, and would require 50%
of the moneys deposited in the fund to be continuously
appropriated to the Controller for transfer

transferred
to the State Investment Account and 50% of the
moneys deposited in the fund to be continuously appropriated
to the Controller for transfer
transferred to
the regional investment accounts based on the amount of charges
collected within each unspecified funding region
established by the bill.
The bill would continuously appropriate the moneys in each of the
regional investment accounts to the Department of Water Resources for
purposes of providing financing for regional projects related to
water storage, water conservation, water conveyance, desalination,
wastewater recycling, levee improvements, safe drinking water, flood
plain management, and the restoration of fish and wildlife,
consistent with a specified integrated regional water management plan
that meets prescribed requirements. The bill would require the
Department of Water Resources to adopt regulations for the
preparation of integrated regional water management plans for these
purposes.

The bill would require the moneys in each of the regional
investment accounts to be available, upon appropriation by the
Legislature, for purposes of providing funding for public benefits of
water-related projects and programs, consistent with prescribed
requirements.

The bill would require the moneys in the State Investment Account
to be expended, upon appropriation by the Legislature, for
administration of the water resources investment program and to fund
specified programs proposed by the California Water
Commission
public benefits of specified water-related
projects and programs
, including statewide water resources
projects, financing the operating expenses of the
Delta Stewardship Council and the Delta Plan adopted by the council,
projects that reduce the impacts of mercury contamination in the
Sacramento-San Joaquin Delta, and specified
scientific studies and assessments , debt service on general
obligation bonds for projects and programs that provide statewide and
interregional public benefits, and other unspecified purposes

.
The bill would require the State Auditor to conduct a programmatic
review and audit of expenditures from the above-described funds and
annually report the findings of the review and audit to the Governor
and the Legislature. The bill would also require the California Water
Commission to annually review expenditures authorized pursuant to
the bill and to hold specified hearings relative to the water
resources investment program.

(2) By expanding the application of the Fee Collection Procedures
Law, the violation of which is a crime, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(3) This bill would constitute a change in state statute that
would result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and this
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
Vote: 2/3. Appropriation: yes no .
Fiscal committee: yes. State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Division 36 (commencing with Section
87000) is added to the
Water Code , to read:


DIVISION 36. California Water Resources Investment Act


CHAPTER 1. GENERAL PROVISIONS


87000. This division shall be known and may be cited as the
California Water Resources Investment Act of 2011.
87010. The Legislature finds and declares all of the following:
(a) It is necessary to establish a sustainable revenue source to
fund the public benefits of water-related projects and programs.
(b) (1) Public benefits are the advantages or outcomes from an
undertaking that accrue to the general public. Public benefits are
such that no one person or group of people can be effectively
excluded from receiving the benefits. While some public benefits of
water-related projects and programs may accrue to all Californians,
others accrue on a more limited regional basis, such as within a
specific watershed or hydrologic region.
(2) Public benefits of water-related projects and programs may
include any of the following:
(A) Enhancement of public trust resources beyond the regulatory
baseline.
(B) Protection of public health and safety.
(C) Efficient administration of water-related institutions or
information.
(D) Research and development of new technologies.
(E) ____.
(c) Funding of public benefits should be guided by the beneficiary
pays principle and the polluter pays principle.
(1) Under the beneficiary pays principle, beneficiaries of a
program or project pay for the benefits they receive in approximate
proportion to the benefits received. Beneficiaries may include
individual water users, water agencies, nonprofit organizations,
local or regional governments, and the general public. Beneficiaries
are not expected to pay for actions that fall under the polluter pays
principle.
(2) Under the polluter pays principle, those who cause or may
cause harm to the environment pay the costs to remediate, mitigate,
or avoid causing that harm. The polluter pays principle is designed
to ensure that a project or program bears the full cost of the
environmental effects of that project or program.
(d) (1) Decisions regarding funding of public benefits of
water-related projects and programs should be made by the public
receiving those benefits.
(2) Decisions regarding funding of public benefits that accrue
statewide should be made by the state.
(3) Decisions regarding funding of public benefits that accrue a
specific region should be made by that region.
(e) Under the principles set forth in subdivisions (a) to (d),
inclusive, responsibility for funding water-related programs should
be as follows:
(1) The state should generally be responsible for funding the
public benefits of certain types of water-related programs. Depending
on the specific circumstance, these may include:
(A) Projects or programs that provide public benefits statewide or
to more than one region.
(B) Protection and enhancement of public trust resources beyond
that required of any person or entity as a condition of a permit,
regulation, state or federal statute, or other legally enforceable
requirement.
(C) Protection of public health or safety where local agencies are
unable to perform this task adequately.
(D) Resolving interregional legacy problems, such as mercury
pollution, where the person or entity that caused the pollution
cannot be found or no longer exists and there is no other practical
recourse to cause remediation of the problem.
(E) Efficient administration of state water institutions or
information.
(F) Research and development of new technologies.
(G) Debt service on general obligation bonds for projects and
programs that provide statewide and interregional public benefits.
(H) ____.
(2) Specific regions of the state should generally be responsible
for funding the public benefits of certain types of water-related
programs. Depending on the specific circumstance, these might
include:
(A) Projects or programs that provide public benefits to that
specific region.
(B) Protection and enhancement of public trust resources beyond
that required of any person or entity as a condition of a permit,
regulation, state or federal statute, or other legally enforceable
requirement, where the protection or enhancement leads to other
regional public benefits.
(C) Protection of public health or safety.
(D) Resolving regional legacy problems, such as groundwater
pollution, where the person or entity that caused the pollution
cannot be found or no longer exists and there is no other practical
recourse to cause remediation of the problem
(E) Efficient administration of regional water institutions or
information, such as groundwater monitoring entities.
(F) Attaining regional water quality objectives for nonpoint
source pollutants.
(G) Debt service on general obligation bonds for projects and
programs that provide regional or local public benefits.
(H) ____.
(f) Pursuant to the principles set forth in subdivisions (a) to
(d), inclusive, neither the state nor specific regions of the state
should have any responsibility to fund certain types of water-related
activities. These include, but are not limited to, all of the
following:
(1) A project or program that provides no public benefits.
(2) An improvement required as a means of meeting mitigation
requirements associated with a project.
(3) An enhancement or improvement where a specific individual or
group of individuals can be identified as the sole beneficiaries.
(4) ____.
87020. The Legislature further finds and declares all of the
following:
(a) A water resources assessment imposed for purposes of financing
the public benefits of water-related projects and programs should
have all of the following characteristics:
(1) The assessment should be equitable, and should have equal
application to similar water users and differential application to
dissimilar water users in approximate proportion to their
differences.
(2) The assessment should be comprehensive, and should apply to
the greatest number of water users possible. There should be few, if
any, free riders.
(3) The assessment should be unavoidable. Those who are subject to
the assessment should not be able to avoid paying the assessment
through loopholes, exceptions, or similar mechanisms.
(4) The assessment should be affordable, and should not place an
undue burden upon those required to pay the assessment.
(5) The assessment should be understandable. The assessment should
be easy to explain and comprehend.
(6) The assessment should be easy to administer. The method of
collecting the assessment should minimize the costs of administering
and complying with the law.
(7) The assessment should be stable. The assessment should provide
a reasonably stable and predictable revenue stream.
(8) ____.
(b) Consistent with subdivision (a), and as a result of the
differences in the uses of water, sources of water, and methods of
distributing water among the end users, it is appropriate for a water
resources assessment to apply differently to agricultural and
nonagricultural water uses, and to have all of the following
characteristics:
(1) The assessment should be imposed on all retail water
suppliers.
(2) The assessment should be imposed on nonagricultural water uses
based on the number of acre-feet of water used.
(3) The assessment should be imposed on agricultural water users
based on the number of acres of irrigated land.
(4) The assessment should be imposed without regard to whether the
water used by the end water user was purchased from the retail water
supplier or was self-supplied through a private well or other
private legal water right.
(5) The assessment should result in a different effective rate for
agricultural and nonagricultural uses.
(6) The assessment should encourage high levels of agricultural
water use efficiency.
(7) ____.
(c) The proceeds of a water resources assessment should be shared
between the state and regions of the state.
(1) Half of the proceeds should be allocated to the state to fund
statewide and interregional public benefits associated with
water-related projects and programs.
(2) Half of the proceeds should be allocated among the regions of
the state to fund regional and local public benefits associated with
water-related projects and programs. The allocation among the regions
should be in proportion to the proceeds raised in each region.
87030. The purpose of this division is to establish a sustainable
funding source to fund the public benefits of water-related projects
and programs consistent with the policies set forth in this chapter.

CHAPTER 2. DEFINITIONS


87040. Unless the context otherwise requires, the following
definitions govern the construction of this division:
(a) "Applicant" means an entity that submits a regional proposal
for funding in accordance with this division.
(b) "Funding region" means one of the following regions in the
state:
(1) ____.
(c) "Integrated regional water management plan" has the same
meaning as defined in Section 10534.
(d) "Investment fund" means the California Water Resources
Investment Fund established pursuant to Section 87070.
(e) "Person" means any individual, estate, business or common law
trust, firm, joint stock company, joint venture, business concern,
corporation, including, but not necessarily limited to, a government
corporation, partnership, limited partnership, limited liability
partnership, limited liability company, and any other business
entity, and any social club, cooperative organization, fraternal
organization, or any other organization or association. "Person" also
includes any city, county, city and county, district, commission,
the state or any department, agency, or political subdivision
thereof, any interstate body, and the United States and its agencies
and instrumentalities to the extent permitted by law.
(f) "Public agency" means a state agency or department, a
district, a joint powers authority, a city, county, a city and
county, and any other political subdivision of the state.
(g) "Regional investment account" means any of the ____ accounts
established in the investment fund pursuant to Section 87070 and
corresponding to a funding region identified pursuant to subdivision
(b).
(h) "Retail water service" means water service that is purchased
by municipal, industrial, or agricultural water customers without
further sale of water to other water customers.
(i) "Retail water supplier" means any local entity, including a
public agency, city, county, investor-owned utility, municipal water
company, or private water company or person that provides retail
water service to municipal, industrial, or agricultural water
customers.
CHAPTER 3. INVESTMENT IN CALIFORNIA WATER RESOURCES



Article 1. General Provisions


87050. (a) The department and the State Board of Equalization may
each adopt emergency regulations to implement and enforce this
chapter.
(b) The emergency regulations adopted pursuant to subdivision (a)
shall be adopted in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, and for the purposes of that chapter, including Section 11349.6
of the Government Code, the adoption of these regulations is an
emergency, and shall be considered by the Office of Administrative
Law as necessary for the immediate preservation of the public peace,
health, safety, and general welfare. Notwithstanding Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, any emergency regulations adopted by the
department or the State Board of Equalization pursuant to this
section shall be filed with, but not be repealed by, the Office of
Administrative Law, and shall remain in effect for a period of two
years or until revised by the department or the State Board of
Equalization, whichever occurs first.

Article 2. Water Resources Assessment


87060. (a) Commencing July 1, 2012, an annual water resources
assessment shall be imposed on every retail water supplier in this
state for each calendar year, in accordance with the following
requirements:
(1) A charge of ____ dollars ($____) per acre foot of water that
is sold for nonagricultural uses.
(2) (A) Except as provided in subparagraph (B) and subdivision
(b), a charge of ____ dollars ($____) per acre of land that is
irrigated for agricultural purposes within the service area of the
retail water supplier. This charge shall apply to all land irrigated
for agricultural purposes, regardless of whether the source of the
irrigation water is surface or groundwater.
(B) For each acre of land that the department determines to be
utilizing best management practices for the crop and soil type
irrigated on that acre, as determined pursuant to subdivision (b),
the water resources assessment shall be ____ dollars ($____).
(b) On or before July 1, 2013, the department shall adopt
regulations establishing a program to determine best management
practices for irrigated agriculture, based on crop and soil type.
87062. The imposition of the water resources assessment in
accordance with this article is a matter of statewide interest and
concern, and is applicable uniformly throughout the state.

Article 3. Collection of Water Resources Assessment


87065. (a) The State Board of Equalization shall collect and
administer the water resources assessment imposed pursuant to Section
87060 in accordance with the Fee Collection Procedures Law (Part 30
(commencing with Section 55001) of Division 2 of the Revenue and
Taxation Code). For purposes of this section, "feepayer," within the
meaning of the Fee Collection Procedures Law, shall include a retail
water supplier.
(b) For each calendar year, the water resources assessment imposed
pursuant to Section 87060 shall be due and payable to the State
Board of Equalization by July 1 of the immediately following calendar
year. Payments shall be accompanied by a return in the form
prescribed by the State Board of Equalization, and may include, but
are not necessarily limited to, electronic media.
(c) Notwithstanding subdivision (b), if the State Board of
Equalization deems it necessary in order to ensure payment or to
facilitate collection of the water resources assessment, the State
Board of Equalization may require annual returns and payment of the
water resources assessment for a different period from that set forth
in subdivision (b), as determined by the State Board of
Equalization.
(d) The State Board of Equalization may prescribe, adopt, and
enforce regulations for the administration and enforcement of the
water resources assessment pursuant to this article.
87066. A retail water supplier may collect the costs of the water
resources assessment from its customers by using the amounts set
forth in subdivision (a) of Section 87060 or by using an alternate
collection method consistent with the supplier's practices.
87067. (a) On or before March 1, 2012, each retail water supplier
in the state shall submit to the department a written statement
describing whether it is publicly or privately owned, its official
mailing address, a map of its service area, the connection categories
used in billing its water customers and the number of connections in
each category, the volume of water provided to its nonagricultural
customers in the immediately preceding calendar year, the number of
acres irrigated for agricultural use within its service area, and any
other relevant information as may be determined by the department.
(b) On or before July 1, 2012, the department shall provide the
State Board of Equalization with a list of each retail water supplier
in the state, including the information for each retail water
supplier collected pursuant to subdivision (a).

Article 4. California Water Resources Investment Fund


87070. (a) The California Water Resources Investment Fund is
established in the State Treasury.
(b) The investment fund consists of ____ accounts, which are
hereby established as follows:
(1) The General Account for receipt of deposits from the State
Board of Equalization and for general expenditures.
(2) The State Investment Account.
(3) ____ regional investment accounts, corresponding to the
funding regions specified in subdivision (b) of Section 87040.
(c) Water resources assessments and any penalties imposed on
retail water suppliers in connection with the collection of the
assessments by the State Board of Equalization, shall be remitted by
the State Board of Equalization, in accordance with Article 2
(commencing with Section 87060), and shall be deposited in the
investment fund. Notwithstanding Section 16305.7 of the Government
Code, all interest earned on moneys deposited in the investment fund
shall be maintained in the investment fund.
(d) Moneys deposited in the investment fund shall not be
appropriated for any purpose other than the purposes authorized by
this division.
87072. (a) All moneys collected pursuant to this chapter shall be
deposited by the State Board of Equalization into the General
Account in the investment fund.
(b) The Controller shall transfer the moneys deposited in the
General Account to the State Investment Account and the regional
investment accounts, as follows:
(1) Fifty percent shall be transferred to the State Investment
Account.
(2) Fifty percent shall be transferred to the ____ regional
investment accounts on a pro rata basis that reflects the percentage
of the moneys collected from within each respective funding region.
(c) For purposes of calculating the amounts transferred pursuant
to paragraph (2) of subdivision (b), the State Board of Equalization
shall provide a statement of the percentage of the moneys collected
pursuant to this chapter that is attributable to each of the funding
regions to the Controller on a quarterly basis.
87074. (a) Notwithstanding any other law, the State Investment
Account and each of the regional investment accounts shall accumulate
the revenues deposited in the respective accounts in any year in
which those revenues are not expended.
(b) Notwithstanding Section 16305.7 of the Government Code, any
interest earned on moneys deposited in the State Investment Account
or any of the regional investment accounts shall be retained in the
respective account and may be expended for the authorized purposes of
the respective account.

Article 5. Regional Investment Accounts


87080. The moneys in each regional investment account shall be
available, upon appropriation by the Legislature, to fund public
benefits of water-related projects and programs in accordance with
this article.
87082. In order to be eligible for financial assistance from a
regional investment account, a project or program shall be consistent
with one or more of the following:
(a) An adopted integrated regional water management plan
consistent with Part 2.2 (commencing with Section 10530) of Division
6.
(b) An adopted stormwater resource plan consistent with Part 2.3
(commencing with Section 10560) of Division 6.
(c) An adopted groundwater management plan that complies with the
requirements of Section 10753.7.
(d) A water quality control plan developed pursuant to Section
13240.
(e) ____.
87084. In order to be eligible for financial assistance from a
regional investment account, an applicant submitting a proposal for
funding shall meet all of the following requirements, as applicable:
(a) If the applicant is an urban water supplier, the applicant
shall prepare, adopt, and submit to the department an urban water
management plan in accordance with the Urban Water Management
Planning Act (Part 2.6 (commencing with Section 10610) of Division
6).
(b) If the applicant is an agricultural water supplier, the
applicant shall prepare, adopt, and submit to the department an
agricultural water management plan in accordance with Part 2.8
(commencing with Section 10800) of Division 6.
(c) If the applicant requests funding for a groundwater
management, storage, or recharge project, or a project with potential
groundwater impacts, the applicant shall demonstrate that one or
more of the following conditions have been met, as applicable:
(1) A groundwater management plan for the affected groundwater
basin has been prepared and implemented in accordance with Part 2.75
(commencing with Section 10750) of Division 6.
(2) The applicant participates in, or agrees to be subject to, a
groundwater management plan, basinwide management plan, or other
program or plan that meets the requirements of Section 10753.7.
(3) The applicant complies with the requirements of an
adjudication of water rights in an affected groundwater basin. For
purposes of this paragraph, an "adjudication" includes an
adjudication under Section 2101, an administrative adjudication, and
an adjudication in state or federal court.

Article 6. State Investment Account


87090. The moneys in the State Investment Account shall be
expended, upon appropriation by the Legislature, for all of the
following purposes:
(a) For allocation to the State Board of Equalization for payment
of refunds of the water resources assessment, interest, and
penalties, as authorized pursuant to Chapter 5 (commencing with
Section 55221) of Part 30 of Division 2 of the Revenue and Taxation
Code, including refunds due on account of judgments for the return of
charges that are unlawfully collected.
(b) For allocation to the State Board of Equalization and the
department to ensure sufficient revenues for those agencies to carry
out the duties imposed upon each of them by this division.
(c) For a reserve, not to exceed ____ dollars ($____), which shall
be maintained in the State Investment Account.
87092. The balance of the moneys in the State Investment Account,
after allocation for expenditure for all of the purposes set forth
in Section 87090, shall be available, upon appropriation by the
Legislature, to fund the public benefits of the following
water-related projects and programs:
(a) Projects of statewide and interregional significance.
(b) Operating expenses of the Delta Stewardship Council and the
Delta Plan adopted by the Delta Stewardship Council, and grants and
direct expenditures to implement the Delta Plan.
(c) Projects that reduce the impacts of mercury contamination of
the Sacramento-San Joaquin Delta and its watersheds, and remediation
and elimination of continuing sources of mercury contamination.
(d) Scientific studies and assessments that support projects
authorized under this section.
(e) Debt service on general obligation bonds for projects and
programs that provide statewide and interregional public benefits.
(f) ____.

SEC. 2. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates
a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIII B of the California Constitution.
All
matter omitted in this version of the bill appears in the bill as
amended in the Senate, March 23, 2011. (JR11)