Date of Hearing: June 2, 2020

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2693

Author:(Bloom) – As Amended Ver:May 4, 2020

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill establishes the Shasta, Trinity, and Oroville Restoration Authority (STOWRA) at the State Water Resources Control Board (State Water Board) to coordinate the restoration and conservation of the watersheds supplying the Shasta, Trinity, and Oroville Reservoirs. Specifically, this bill:

1. Provides the three voting members of STOWRA shall be one representative from the State Water Board appointed by CalEPA, and one member each from CalFire and the Department of Fish and Wildlife (DFW) to be appointed by the Natural Resources Agency (CNRA). Provides the non-voting members shall be one representative of the Sierra Nevada Conservancy and one representative of the Wildlife Conservation Board both appointed by CNRA.
2. Creates an advisory panel to facilitate interagency coordination and give advice on project selection. Provides the advisory panel shall consist of federal, state, tribal, NGO and landowner representatives, as specified.
3. Authorizes STOWRA to use General Funds (GF) from the Headwaters Restoration Account for purposes of the bill. Creates the Headwaters Restoration Special Subaccount within the account and for all non-GF funds continuously appropriates the funds to STOWRA. Requires STOWRA to use funds from the account and subaccount to establish a grant program.
4. Requires STOWRA, by January 1, 2022, to develop an implementation plan for the completion of priority projects and specifies criteria and issues the plan shall address. Requires STOWRA to maintain an internet website detailing the implementation plan, and with updating the website semiannually.
5. Requires STOWRA to adopt funding guidelines for project selection and administration by January 1, 2023, and prescribes criteria and prioritization of projects to fund.
6. Requires STOWRA to report to the Legislature annually detailing its progress.

FISCAL EFFECT:

1. Cost pressures in the tens of millions of dollars to hundreds of millions of dollars (GF and special fund) to fully implement the provisions of the bill and provide restoration and conservation grants for the watersheds over a 15-year period (Headwaters Restoration Fund and Headwaters Restoration Special Subaccount).
2. State Water Board annual GF costs of approximately $1.8 million for the State Water Board to: a) participate in, and provide support to the STOWRA steering committee; b) provide administrative support for the advisory group; and c) implement the STOWRA grant program.  This bill contains no mechanism for using the Headwaters Restoration Fund for STOWRA administration and implementation.
3. Unknown costs for state agencies to participate in STOWRA and the advisory panel. It is likely the costs of participating in the STOWRA for voting members CalFire and DFW will not be absorbable and may require a dedicated position (GF).

COMMENTS:

1. Background and Purpose. AB 2551 (Wood), Chapter 638, Statutes of 2018, required CNRA and CalEPA to jointly develop a plan to identify restoration needs in the watersheds supplying the Oroville, Shasta, and Trinity Reservoirs.

The Administration’s draft Water Resiliency Portfolio specifically calls for completion of the plan and for exploration of how forest and water management can improve each other. This bill intended to further this effort by establishing an interagency team to develop a 15-year implementation plan by 2022 and direct funding toward watershed restoration projects in the region.

According to the author:

AB 2693 builds upon the Legislature’s work to recognize source watersheds as an integral part of California’s water infrastructure and takes this work a step further by requiring an implementation plan to achieve identified restoration needs, and establishing an interagency team to direct funding for forest and watershed restoration projects in the region that will result in statewide benefits. The plan implemented by the Watershed Restoration Administration will deliver more usable water by improving timing of runoff and increasing the water stored in watersheds above the reservoirs. It will reduce floods and deliver more water when we need it most, in the warm, dry summer months. It also has major co-benefits, from fire risk reduction to fish and wildlife adaptation to climate resilience. It will also support thousands of family-wage jobs, promoting rural economic development in a region suffering from some of the highest unemployment rates and greatest income inequality in California.

1. Support and Opposition. This bill is supported by restoration groups and others from the watersheds who argue the forests, meadows and streams that make up the watersheds of the Oroville, Shasta, and Trinity Reservoirs are degraded and in danger of further deterioration. Supporters claim AB 2693 will deliver water benefits by improving the quantity and timing of flow, with major co-benefits to wildlife and strategic fire risk reduction, as well as rural economic development in a region suffering from high unemployment and income inequality.

Opponents include the Sierra Fund and numerous water agencies throughout the watershed and who receive water from the area of origin who argue state agencies can already partner with the Forest Service and other federal agencies to accomplish the goals set forth in this bill. Opponents are concerned that the Department of Water Resources and the U.S. Bureau of Reclamation would not have adequate authority over projects in their respective watersheds, and that State Water Contractors are key stakeholders that should be included in the advisory body. Opponents are further concerned that the continuous appropriation of non-state funds would limit legislative oversight.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: May 14, 2020

ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE

Eduardo Garcia, Chair

ABPCA Bill Id:AB 2693 (

Author:Bloom) – As Amended Ver:May 4, 2020

SUBJECT: Shasta, Trinity, and Oroville Watershed Restoration Administration

SUMMARY: Establishes a steering committee and advisory body to coordinate the restoration and conservation of the watersheds supplying the Shasta, Trinity, and Oroville Reservoirs. Specifically, this bill:

1. Establishes the Shasta, Trinity, Oroville Watershed Restoration Administration (STOWRA) within the State Water Resources Control Board (SWRCB) to coordinate and facilitate the restoration and conservation of the watersheds supplying the Oroville, Shasta, and Trinity Reservoirs;
   
2. Stipulates that the STOWRA shall have a five-member steering committee, consisting of three voting members, which shall act by majority vote, and two adjunct non-voting members, appointed by the Secretaries of the California Environmental Protection Agency (CalEPA) and the California Natural Resources Agency (CNRA), respective to their jurisdictions;
3. Stipulates that the voting body of the steering committee shall include one representative from each of the Department of Forestry and Fire, the Department of Fish and Wildlife, and the SWRCB, and that the non-voting members shall be one representative of the Sierra Nevada Conservancy and one representative of the Wildlife Conservation Board;
   
4. Stipulates that the STOWRA shall include an advisory body, which shall serve with reimbursement but without compensation, with a specified makeup to facilitate interagency coordination and advise on project selection, and that the representatives on the advisory panel shall be appointed by the STOWRA, with exceptions;
5. Authorizes the STOWRA to use General Fund moneys deposited into the existing Headwaters Restoration Account upon appropriation by the Legislature, and establishes a subaccount within the Headwaters Restoration Account for funds not from the General Fund to be used by the STOWRA with continuous appropriation;
   
6. Tasks the STOWRA to develop an implementation plan for the completion of priority projects within 15 years by January 1, 2022, and specifies criteria and issues the plan shall address;
   
7. Tasks the STOWRA with adopting funding guidelines for project selection and administration by January 1, 2023, and specifies criteria and prioritization of projects to fund;
8. Tasks the STOWRA with presenting the Legislature with an annual progress report; and
   
9. Tasks the STOWRA with maintaining an internet website detailing the implementation plan, and with updating the website semiannually.

EXISTING LAW:

1. Authorizes the CNRA and the CalEPA to jointly develop a forest and watershed restoration investment plan for the drainages that supply the Oroville, Shasta, and Trinity Reservoirs, and submit the plan to the Legislature [Public Resources Code (PRC) §71365].
   
2. Authorizes CNRA and CalEPA to jointly develop a pilot project for multiagency permitting of watershed restoration activities in the watersheds of the Oroville, Shasta, and Trinity Reservoirs, and propose the project to relevant policy committees in the Legislature (PRC §71365).
   
3. Establishes the Headwaters Restoration Account in the General Fund and makes those moneys available, upon appropriation by the Legislature, for forest and watershed restoration purposes of the watersheds of the Oroville, Shasta, and Trinity Reservoirs (PRC §71365).
   
4. States that source watersheds are integral components of California’s water infrastructure, and declares that maintenance and repair of source watersheds is eligible for the same forms of financing as other water collection and treatment infrastructure [Water Code (WAT) §108.5].
   
5. Tasks the CNRA and the Department of Forest and Fire Protection to develop and implement prioritized expenditures for forest management, including forest watershed programmatic work, prioritizing locations that are important for reducing risk to water supply and maintaining water quality benefits and conserving existing biodiversity (Budget Act of 2018, Item 0540-101-3328).
   
6. Allows a regional water management group to prepare and adopt an integrated regional water management plan, which includes watershed management planning and multipurpose program planning (WAT §10530 et seq.).
   
7. Requires the Department of Forestry and Fire Protection to collaborate with the State Water Resources Control Board and the Department of Fish and Wildlife on the design of fuel reduction projects (PRC §4123).

FISCAL EFFECT: Unknown. This bill is keyed fiscal.

COMMENTS:

Author’s Statement:

AB 2693 builds upon the Legislature’s work to recognize source watersheds as an integral part of California’s water infrastructure and takes this work a step further by requiring an implementation plan to achieve identified restoration needs, and establishing an interagency team to direct funding for forest and watershed restoration projects in the region that will result in statewide benefits. The plan implemented by the Watershed Restoration Administration will deliver more usable water by improving timing of runoff and increasing the water stored in watersheds above the reservoirs. It will reduce floods and deliver more water when we need it most, in the warm, dry summer months. It also has major co-benefits, from fire risk reduction to fish and wildlife adaptation to climate resilience. It will also support thousands of family-wage jobs, promoting rural economic development in a region suffering from some of the highest unemployment rates and greatest income inequality in California.

Background: In 2018, AB 2551 (Wood) called for a plan to identify restoration needs in the watersheds supplying the Oroville, Shasta, and Trinity Reservoirs. The Newsom Administration’s draft Water Resiliency Portfolio specifically calls for completion of these plans and for exploration of how forest and water management can improve each other. AB 2693 would further this effort by establishing an interagency team to develop a 15-year implementation plan by 2022 and direct funding toward watershed restoration projects in the region.

Forest Health is Important for California’s Water. Two thirds of the water that Californians use comes from the surface water supply. The amount of surface water available to store in reservoirs and divert from rivers for human use depends on the annual precipitation. The state has over a thousand dams with reservoirs that store water from the wet winters to the dry summers when Californians use more water. These storage reservoirs balance flood risk with the need to store water. California’s built dams and reservoirs have a median construction date of 1955, and many need costly updates. The state can lessen the burden on its built infrastructure by restoring and protecting its natural systems. According to the current draft of California’s Water Resilience Portfolio, forests, soils, and other natural assets can help California water systems adapt to climate change in more beneficial and durable ways than human engineering.

The forested mountain regions of California store snow during the winter wet season, then release melted runoff into streams and rivers throughout the spring and early summer. The snowpack acts as a natural reservoir, augmenting the function of downstream built reservoirs. The snowpack provides about a third of the state’s water supplies throughout the year. Forests and mountain meadows also protect water quality by filtering the water and reducing erosion of sediments into streams.

Forest canopy cover and tree density influence how much snow is evapotranspired (the process of water moving from soil, plants, and water surfaces into the air), melted, or stored, as well as how much water recharges groundwater aquifers. Currently, there are several ongoing or proposed experiments that are measuring how water yield and quality are impacted by forest vegetation treatments in the Sierra Nevada. Some studies, including one in California, have concluded that their tested forest vegetation treatments resulted in only small increases in water yield, and emphasize that repeated treatments may be necessary. Other vegetation treatments have shown more robust results, but it remains unclear whether these treatments would reliably increase water yield when scaled up.

New York City has seen success with investing in natural infrastructure, saving $6-8 billion over 10 years by investing in forest conservation. New York City faced the requirement that all surface drinking water sources undergo filtration unless human activities could be controlled within its source watershed. Rather than constructing a new filtration facility, with a construction cost of $9 billion and a daily operations cost of $1 million, it invested about $1.5 billion in protecting its upstate watershed. Another example is the city of Denver, where a partnership of local, state, and federal agencies invested $64 million to conduct fuel reduction and forest management activities on 73,000 forest acres in priority watershed lands.

Climate Change, Wildfire, and Water. In the early 2000’s, the National Research Council and the U.S. Forest Service both concluded that particular forest harvest practices could increase water yield, but that it was impractical to manage forests for the sake of increasing water. More recently, the views in California have shifted, mainly because climate change has increased the number of catastrophic wildfires in California and called current forest management practices into question. Managing forests and meadows to prevent catastrophic wildfires has many synergies with managing forests and meadows to maintain a year-round water supply. Moreover, post-fire erosion from large wildfires can hurt water quality and downstream water infrastructure.

Climate change has also increased the variability in precipitation, stressing existing water infrastructure. Warmer winters are causing an earlier snowmelt and a greater share of the state’s annual precipitation to be rain rather than snow, resulting in a predicted snowpack reduction of 65% by the end of the century. This could lead to an increased potential for high peak flows followed by drought. Just as wildfires harm the water system, the changes in the water supply and runoff timing can result in longer dry periods conducive to severe wildfires. Preserving the ability of higher elevation forests to capture and maintain as much snow as possible would help mitigate these effects.

Which Watersheds Would Be Affected? This bill focuses on restoring the source watersheds of, or the forests, meadows, and streams that provide water to, the Oroville, Shasta, and Trinity Reservoirs. These are the three largest reservoirs in the state, all located in northern California. They are largely supplied by five watersheds: the Upper Trinity, Upper Sacramento, McCloud, Pit, and Feather watersheds. These five watersheds are located within Modoc, Siskiyou, Shasta, and Lassen counties, comprise 7 million acres of mostly forest and meadow lands, and supply drinking water for 28 million Californians.

A recent report by Pacific Forest Trust examined the lands of these five watersheds and found that 64% of forests, 90% of meadows, and 10,510 miles of streams were degraded and posed risks to watershed function. In these watersheds, 38% of lands are privately owned, and the rest is largely federal land. As with state fire reduction efforts, forest management for the sake of watershed preservation would require cooperation and coordination from federal forest managers in addition to private, state, and local managers.

A Regional Vision. To date, conservation efforts in these watersheds have been approached in a project-by-project manner. The grants are generally awarded by a single agency in a competitive process, and are not guided by a regional vision. A landscape-level planning process can help maximize the impact of the conservation investment, allowing for more strategic, efficient, and potentially larger projects to be completed. For example, fragmented wildlife conservation projects are less impactful than coordinated projects that link valuable habitat.

Water management in California has been moving toward landscape-level planning. In 2002, the Legislature passed the Integrated Regional Water Management (IRWM) Planning Act in an effort to identify and implement water management solutions on a regional scale and across jurisdictional boundaries. According to the Department of Water Resources, IRWM plans increase regional self-reliance, reduce conflict, and manage water to concurrently achieve social, environmental, and economic objectives. California has 48 IRWM regions, covering 87% of the state’s area. The five watersheds fall within three IRWM regions, all of which have adopted IRWM plans that address ecosystem and forest health. This bill’s resultant implementation plan would likely resemble elements of existing IRWM plans, but more tailored to the five watersheds, with potentially larger projects, and with a completion goal of 15 years for priority projects.

The United States Forest Service (USFS), which manages a large portion of these watershed lands, created a Regional Ecological Implementation Plan for its Pacific Southwest region in 2011. This plan outlined many goals, including forming collaborations between federal, state, and local groups. For example, one goal to be completed by 2013 was to:

“Continue to encourage [USFS] to participate in local Integrated Regional Water Management Program (IRWMP) so that upper watersheds are considered in regional watershed planning. Partner with members of these groups to obtain funding for multiple objectives in the watershed including upper watershed restoration.”

It is unclear how successful these efforts have been in the source watersheds relevant to this bill, if these efforts are adequately funded, and if the impacts have been long-lasting.

Decision-making and Advisory Bodies. The proposed voting body of the steering committee includes a representative from the Department of Forestry and Fire Protection, the Department of Fish and Wildlife, and the SWRCB. These three governmental bodies already collaborate to make decisions on fuel reduction programs. The STOWRA would be established within the SWRCB, which allocates water rights in the state, including for federal entities.

The steering committee would also include two non-voting members. The first would be from the Sierra Nevada Conservancy, which is responsible for preserving lands covering a portion of the five relevant watersheds. SB 989 (Dahle), which is under consideration this session, aims to expand the jurisdiction of the Sierra Nevada Conservancy into additional watersheds. Some areas of the Upper Trinity watershed are located within the jurisdiction of the Coastal Conservancy, although the Coastal Conservancy primarily focuses on protecting coastal resources. Both the Sierra Nevada Conservancy and the second non-voting member, from the Wildlife Conservation Board, have existing grant programs that could be used to accomplish the goals of this bill.

The proposed advisory body includes a wide array of stakeholders, particularly those involved in land management. However, it does not currently include a representative from the Department of Water Resources, which leads statewide water resource planning, serves as the statewide flood control agency, and manages the State Water Project, which includes Oroville Dam. The proposed advisory body also does not include a representative from the U.S. Bureau of Reclamation, which supervises the Central Valley Project, including both the Trinity and Shasta Dams.

Comments from the Assembly Natural Resources Committee:

Upland forests in California are facing unprecedented climate extremes, which can increase the risk of spreading invasive pests, tree mortality, and high-severity wildfire. In the long term, these changes will reduce the forests’ ability to sequester carbon and negatively impact the state’s water supply. The 2010-2016 drought resulted in the deaths of an estimated 102 million trees in the Sierra Nevada. This drought, in combination with a century of suppressing low intensity fires and the logging of older growth and more fire-resistant trees, has increased the size and severity of California’s fires. Consequently, California’s forests have become overstocked, with unprecedented levels of fuel. Although wildfires may increase runoff rates and streamflow volume for up to several years after a burn, they also increase erosion and sedimentation rates in adjacent rivers. The loss of shade from tree cover can also lead to drier soils and less snowpack in the burned region, impacting plant communities, river volume, and ground water replenishment rates. As temperatures rise, more winter precipitation will fall as rain rather than snow, reducing the snowpack, and earlier spring runoff will reduce water availability downstream during the summer and fall months. A 2014 study in the Upper Kings Watershed estimated that, by the end of the century, increasing temperatures alone could intensify evapotranspiration rates by 28% and decrease runoff by 26%, reducing the availability and flow of water in the entire watershed. Higher water temperatures, flooding, and droughts will further affect water quality and supply, exacerbate water pollution, and impact aquatic ecosystems.

Headwater forest management benefit the state by maintaining our water supply and quality as the climate changes. In addition, improving the health of forested watersheds will sequester carbon, reduce the risk of catastrophic wildfires, maintain native biodiversity, and improve air quality. The collaboration of the decision-making agencies on the STOWRA and the impacted stakeholders on the advisory body is likely to improve the regional management of the target watersheds. The proposed advisory body in this bill includes a wide array of stakeholders, and the members of the public will help ensure that the process is open and fair to local residents and businesses. In particular, engaging stakeholders across the watersheds to implement strategic regional or watershed-scale conservation and restoration projects will likely increase the effectiveness and longevity of the projects funded by the Headwaters Restoration Account.

Supporting Arguments: Supporters argue that the forests, meadows, and streams that make up the watersheds of the Oroville, Shasta, and Trinity Reservoirs are degraded and in danger of further deterioration. They urge for a fresh approach that looks to natural infrastructure to address climate and community resilience at a landscape scale. Supporters claim that AB 2693 will deliver water benefits by improving the quantity and timing of flow, with major co-benefits to wildlife and strategic fire risk reduction, as well as rural economic development in a region suffering from high unemployment and income inequality.

Opposing Arguments: Opponents argue that state agencies may already partner with the Forest Service and other federal agencies to accomplish the goals set forth in this bill. Opponents are concerned that the DWR and the U.S. Bureau of Reclamation would not have adequate authority over projects in their respective watersheds, and that State Water Contractors are key stakeholders that should be included in the advisory body. Opponents are further concerned that the continuous appropriation of non-state funds would limit legislative oversight.

Considerations: Moving forward with this bill, the author may want to assess the makeup of the advisory body. For example, the author may want to add the U.S. Bureau of Reclamation to the list of invited federal participants since the projects will impact the Central Valley Project. The author may also want to evaluate the role of additional stakeholders that rely on the water supplied by these watersheds.

Prior and Related Legislation:

AB 2480 (Bloom, 2016), Chapter 695, Statutes of 2016, declared that it is California policy to protect source watersheds.

AB 2551 (Wood, 2018), Chapter 638, Statutes of 2018, established the Headwaters Restoration Fund and authorized CNRA and CalEPA to jointly develop a plan for forest and watershed restoration investments for the drainages that supply the Oroville, Shasta, and Trinity Reservoirs.

REGISTERED SUPPORT / OPPOSITION:

Support

California Native Plant Society
Defenders of Wildlife
California Climate and Agriculture Network
Environmental Defense Fund
Friends of Harbors, Beaches and Parks
Pacific Forest Trust
Sierra Forest Legacy
Trinity County Board of Supervisors

Opposition

Desert Water Agency
Palmdale Water District
Rowland Water District
Solano County Water Agency
Valley Ag Water Coalition
Valley County Water District
Walnut Valley Water District

Analysis Prepared by: May Dobosiewicz / W., P., & W. / (916) 319-2096