Je~~ Director of Public Affairs. Agenda Item No. :-:-_1-;-0-::-" ::-:-:--:- Meeting Date: March 2, 2016 Resolution: ( ) Yes (X) No AGENDA DOCKET FORM

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1 -,..nl~tc" COSTA - w"t~r DISTRICT AGENDA DOCKET FORM Agenda Item No. :-:-_1-;-0-::-" ::-:-:--:- Meeting Date: March 2, 2016 Resolution: ( ) Yes (X) No SUBJECT: LEGISLATIVE AFFAIRS REPORT - MARCH 2016 SUMMARY: The Legislative Affairs Program monitors issues in the California Legislature and in the United States Congress that have the potential to affect the ability of Contra Costa Water District (District) to carry out its mission. Through the program the District seeks to impact legislation in response to positions adopted by the Board of Directors (Board). This report is focused on recent activity at the state and federal level and anticipated issues of interest for These positions are described in Attachment 1. Descriptions of state and federal bills of interest to the District are provided in Attachment 2. State Legislative Issues: State legislators have been busy introducing bills to meet the February 19,2016 deadline. While many of these bills are still developing language, District staff are in the process of reviewing what bills may be of interest. Bills must be in print for 30 days before amendments are accepted. At the same time, committee hearings are being scheduled to reviews bills as introduced. Some of the topics of interest include: California Environmental Quality Act (CEQA) reform; Proposition 1 amendments; California WaterFix; and instream flows. AB 1589 and AB 1647 propose exemptions to CEQA for drought emergency and water storage projects. AB 1649 proposes changes to Proposition 1 language for water storage. AB 1713 and AB 2583 propose language directly related to the California WaterFix. AB 2550 proposes financial restitution for water rights holders denied water to meet stream inflow requirements. (Continued on Page 2) RECOMMENDED ACTION: Review update on legislative issues and adopt District positions for the following: AB 1589 (Mathis) California Environmental Quality Act: Exemption-Watch; AB 1647 (Waldron) Environmental Quality: Water Storage Facilities-Watch; AB 1649 (Salas) Water Quality, Supply, and Infrastructure Improvement Act of2014: Water Storage Projects-Not Favor; AB 1713 (Eggman) Sacramento-San Joaquin Delta: Peripheral Canal-Watch; AB 2550 (Patterson) State Water Resources Control Board: Instream Flow Curtailments: Compensation Watch; AB 2583 (Frazier) Sacramento-San Joaquin Delta Reform Act of2009-watch. L. til Je~~ Director of Public Affairs JB/JA:ch Attachments: 1) Legislative Positions; 2) Legislative Affairs Report - March 2016

2 March 2, 2016 Page 2 SUMMARY (Continued from Page 1): AGENDA DOCKET FORM The District will conduct its annual trip to Sacramento on March 15, 2016 to meet with legislators aod discuss issues of interest: Drought update; California WaterFix; aod Los Vaqueros Partnerships. Legislators will be on spring recess beginning March 17, returning on March 28, Federal Legislative Issues: The District submitted its letter of support for Senator Feinstein's drought legislation (S. 2533). It appears that S2533 may be heard by the Senate Energy aod Natural Resources Committee in the near future. House Republicaos continue to encourage action by the Senate so that a conferencing of the House and Senate bills cao occur before being signed into law. The District raised concerns in its position letter to the Senator that there are several problematic areas of the House bill aod that in the interest of getting drought relief in place quickly, those areas should not be part of the [mal bill. Congressman Garamendi has also armounced that he will author a House companion bill to S No hearings have been set at this point.

3 Attachment 1 Contra Costa Water District Legislative Positions Support (S) - legislation. Measure has substantial significance; District actively supports the proposed Support and Seek Amendments (SIS) - Measure has substantial significance; District will actively support the proposed legislation while continuing to seek specific amendments. Support if Amended (SI A) - Measure has substantial significance; District will actively support the proposed legislation if it is amended to address specific shortcomings identified by the District. Favor (F) - Legislation is generally beneficial to District; it will join with other organizations in support, but will not engage actively in advocacy for the measure. Favor if Amended (FIA) - Legislation is generally beneficial to District; it will join with other organizations in support if legislation is amended to address specific shortcomings identified by the District, but will not engage actively in advocacy for the measure.. Watch (W) - Measures or general issues of potential significance to District, but have not been sufficiently defined for a formal position. Not Favor (NF) - Legislation is generally detrimental to District; it will join with other organizations in opposition, but will not engage actively in advocacy against the measure. Oppose Unless Amended (01 A) - Measure has substantial significance; District will actively oppose the proposed legislation unless it is amended to address specific shortcomings. Oppose (0) - legislation. Measure has substantial significance; District actively opposes the proposed

4 Attachment 2 CONTRA COSTA WATER DISTRICT Staff Report DATE: TO: FROM: March 2, 2016 Board of Directors Jerry Brown SUBJECT: INTRODUCTION: The Legislative Affairs Program monitors issues in the California Legislature and in the United States Congress that have the potential to affect the ability of the Contra Costa Water District (District) to carry out its mission. Through the program, the District seeks to impact legislation in response to positions adopted by the Board of Directors. RECOMMENDED ACTION: Review update on legislative issues and adopt District positions for the following: AB 1589 (Mathis) California Environmental Quality Act: Exemption-Watch; AB 1647 (Waldron) Environmental Quality: Water Storage Facilities-Watch; AB 1649 (Salas) Water Quality, Supply, and Infrastructure Improvement Act of2014: Water Storage Projects-Not Favor; AB 1713 (Eggrnan) Sacramento-San Joaquin Delta: Peripheral Canal-Watch; AB 2550 (patterson) State Water Resources Control Board: Instream Flow Curtailments: Compensation Watch; AB 2583 (Frazier) Sacramento-San Joaquin Delta Reform Act of2009-watch. New District Positions: State Legislation: AB 1589 (Mathis, R, Visalia) California Environmental Quality Act: Exemption ACW A Position: Favor Status: Assembly Natural Resources Committee The California Environmental Quality Act (CEQA) requires lead agencies to prepare and certify Environmental Impact Reports for projects that would have significant environmental impacts or Mitigated Negative Declarations for projects that can be revised to avoid or mitigate for impacts. This bill is intended to provide CEQA exemptions for projects undertaken and approved by agencies to mitigate for impacts caused by drought, flood, or fire during a state of emergency declared by the Governor. This District should watch this bill as current language is focused on emergency situations; however, amendments could introduce unintended loopholes or additional exemptions of concern.

5 Meeting Date: March 2,2016 Page 2 AB 1647 (Waldron, R, Escondido) Environmental Quality: Water Storage Facilities ACWA Position: Favor Status: Assembly Natural Resources Committee CEQA requires lead agencies to prepare and certify Environmental Impact Reports for projects that would have significant environmental impacts. This bill is intended to provide CEQA exemptions for water storage proj ects focused on expanding the storage capacity of an existing storage facility in certain specified circumstances: supplies water for agricultural and nonagricultural purposes; expands the capacity by no more than 25%; preserves operations of the facility; complies with existing safety guidelines; and addresses seismic concerns. As written, this exemption would not be applicable to the expansion of Los Vaqueros. The District should watch this bill as current language is narrow; however, amendments could introduce unintended loopholes or additional exemptions of concern. AB 1649 (Salas, D, Bakersfield) Water Quality, Supply, and Infrastructure Improvement Act of2014: Water Storage Projects Recommended District Position: Not Favor ACWA Position: Not Favor Status: Assembly The Water Quality, Supply, and Infrastructure Improvement Act of 2014 (proposition 1) was approved by voters and appropriates $2.75 billion to the California Water Commission (Commission) for public benefits associated, with water storage projects. The Commission is going through a public process to develop the guidelines for applications and awarding funds on a competitive basis to potential storage projects. This bill would make findings of the legislature that Temperance Flat and Sites Reservoirs will meet the statewide goals and provide the specified public benefits to the greatest extent. The District should take a position of Not Favor on this bill on the precedent that the legislature should not be rewriting Proposition 1, especially on programs that are still developing the guidelines as called for in the language approved by voters. The District continues to work with the Commission and other agencies statewide to ensure the guidelines ensure that voters will see a benefit for the billions of dollars they authorized to go to storage projects. AB 1713 (Eggman, D, Stockton) Sacramento-San Joaquin Delta: Peripheral Canal ACW A Position: Oppose Status: Assembly Water, Parks and Wildlife Committee This bill would prohibit the construction of a "peripheral canal" unless expressly authorized by an initiative voted on by California voters on or after January 1,2017. The California WaterFix would fall under the definition of a peripheral canal in the bill. The bill also requires that the Legislative Analyst's Office complete a prescribed economic feasibility analysis prior to a vote to authorize construction. The bill also requires that the project not diminish or negatively impact water supply, water rights, or water quality of any water user in the delta.

6 Meeting Date:,March 2, 2016 Page 3 The District should watch this bill as it moves through the legislative process. The issue of financing is a concern of many. The issue of mitigating impacts is being dealt with in the CEQA review. ACW A is opposed because it could set a precedent of requiring voter approval on large water projects, not just the California WaterFix, even though the definition for applicability is very narrowly defmed in the bill. AB 2550 (Patterson, R, Fresno) State Water Resources Control Board: Instream Flow Curtailments: Compensation ACW A Position: None Yet Taken Status: Assembly Under existing law, the State Water Resomces Control Board (Water Board) grants pennits and licenses to divert water. This bill would require the Water Board to financially compensate a person that is unable to divert the full amount of water authorized under his or her permit or license due to a Water Board driven instream flow curtailment. The District should watch this bill as it is proposing new requirements for any curtailments imposed which exposes the long standing and complicated water rights system to legislative jiggering and potential unintended consequences and establishes a financial bmden for state curtailments when imposed. AB 2583 (Frazier, D, Oakley) Sacramento-San Joaquin Delta Reform Act of 2009 ACW A Position: None Yet Taken Status: Assembly Existing law established the Delta Stewardship Council (Council) and the requirement for the development of the Delta Plan. The Delta Plan was to establish parameters for "covered actions" proposed within the boundaries of the Delta or Suisun Marsh. This bill would make changes to what constitutes a covered action under the Delta Plan and specifically excludes the California WaterFix as a covered action and modifies parts of the water code that addressed implementation of projects such as Two Gates and Dutch Slough, which were detennined to be early actions for delta improvement when the act was established in The District should watch this bill as it is still developing, but it is certainly an issue of interest for om service area. The bill could evolve into a mechanism to provide an alternative to California WaterFix that might have broader public support. Adopted District Positions: The following are state and federal measures previously reviewed by the Board that are still active.

7 Meeting Date: March 2,2016 Page 4 State Legislation: SB 7 (Wolk, D Davis) Housing: Water Meters: Multiunit Structures Recommended District Position: Support ACWA Position: Watch Status: Pending Reconsideration This bill would authorize building standards that require the installation of water sub-meters in multiunit residential buildings by a licensed plumbing contractor. This bill outlines landlord and tenant responsibilities for the installation, maintenance, and reading of sub-meters. The bill also outlines how a landlord should handle billing tenants based on readings from the sub-meters. The bill also directs the Department of Housing and Community Development to develop requirements for installation of sub-meters, including specifications for when installation of submeters is not feasible. Health care facilities, low-income housing, residential care facilities, student dormitories, and time-share properties would be exempt. Local utilities would not be required to install or maintain sub-meters;' however, they would have to require that new mixeduse residential and commercial structures install sub-meters as a condition for service for applications submitted after January I, SB 554 (Wolk, D, Davis) Delta Levee Maintenance District Position: Support ACW A Position: Favor Status: Assembly Existing law establishes a delta levee maintenance program pursuant to which a local agency may request reimbursement for costs incurred in connection with the maintenance or improvement of levees in the Sacramento-San Joaquin Delta. Existing law declares legislative intent to reimburse eligible local agencies under this program, until July 1,2018, in an amount not to exceed 75% of those costs that are incurred in excess of$i,ooo per mile oflevee. Existing law, on and after July I, 2018, declares the intent of the Legislature to reimburse eligible local agencies under this program in an amount not to exceed 50% of those costs that are incurred in any year for the maintenance and improvement of levees. This bill would remove the sunset date and declare legislative intent to continue to reimburse up to 75% of those costs incurred in any year for the maintenance or improvement of levees in excess of $1,000 per mile of levee and would authorize the board to advance funds in an amount that does not exceed 75% of the estimated state share to an eligible local agency. SB 814 (Hill, D San Mateo) Drought: Excessive Water Use: Urban Retail Water Suppliers District Position: Watch ACWA Position: Oppose Unless Amended Status: Introduced in Senate This bill would prohibit excessive use of water by residential customers during a period in which the Governor has issued a proclamation of a state of emergency based on drought conditions. This bill requires agencies to set a threshold for "excessive use" and make a violation of this prohibition punishable by a fine of at least $500 per unit of water used above that threshold. The bill also amends the Public Records Act to require that information be made available regarding residential customers that violate the prohibition, including name, address, and water use.

8 Meeting Date: March 2, 2016 Page 5 Federal Legislation: H.R (Valadao, R Hanford) San Luis Unit Drainage Resolution Act District Position: Oppose Unless Amended ACWA Position: Favor Status: House Natural Resources Committee This bill would authorize a settlement between the Bureau of Reclamation and Westlands Water District regarding management of drainage through the San Luis Drain. This reflects the settlement language released last year with some changes. S (Feinstein, D California) California Long-Term Provisions for Water Supply and Short-Term Provisions for Emergency Drought Relief Act District Position: Support ACWA Position: None Yet Taken Status: Discussion Draft The intent language of this bill provides long-term and short-term provisions to drought prone California. The bill includes several elements and authorizes funding for immediate assistance to drought-stricken communities, desalination, storage, recycling, conservation, groundwater recharge, and incentives for innovation in water treatment and monitoring. Many provisions in the bill reflect language introduced previously by the Senator, Congressman Valadao, and Congressman Huffman. This bill includes protection for existing environmental laws and regulations, and has softened the language of the prescriptive measures for operations that were included in the past. JB/JA:ch